Policy Note:
MBC Holds Roundtable Discussion
on the Philippine Energy Plan

17 October 2024 — MBC, in partnership with HSBC, held a roundtable discussion on the updated Philippine Energy Development Plan (PEP 2023-2050). The new PEP establishes three scenarios: the reference scenario, Clean Energy Scenario (CES) 1 and CES 2. MBC convened industry players and advisory firms to obtain perspectives on regulatory and infrastructure challenges that are essential for meeting the Philippine Energy Plan targets.

While numerous pain points were raised, these 6 were mainly discussed:

1. Local Government Units (LGUs) and Energy Regulatory Commission (ERC) processes are significant barriers to project approvals. Existing processes with LGUs and ERC are creating significant project delays and deterring smaller developers. Accelerating the approval processes and other challenges such as clarifying offshore and forest land use policies, and simplifying Power Supply Agreement (PSA) terms could help reduce barriers to entry and hasten project timelines.
2. Effective enforcement of laws, such as the Renewable Energy Act, is crucial in facilitating infrastructure development. Investors require stable, predictable policies for renewable projects. Some participants noted that LGUs need better guidance and consistent procedures to ensure projects withstand political shifts.
3. To reduce costs, blended finance models are needed. Blended finance models (mixing of public and private funds) are needed to lower financing costs and improve project profitability. Targeted financing structures, such as transition credits for coal plant retirements and risk-sharing mechanisms for small-scale energy efficiency projects, would help attract investment for both supply- and demand-side projects for the power sector.
4. A just energy transition, while plausible, remains a fundamental difficulty. Without targeted incentives for voluntary coal retirement and supportive policies (such as ERC exemptions for RE projects replacing coal and risk sharing), shifting to clean energy will be hindered. Additionally, the lack of a workforce reskilling program leaves communities and workers dependent on coal plants without a clear path to benefit from this transition, risking social and economic impacts in these regions.
5. Bottlenecks in grid development. Limited grid access is a major bottleneck in the country, especially for renewable energy (RE) projects. Establishing clear timelines for grid development, alongside policy adjustments to improve interconnection for offshore wind and RE, could enhance investor confidence.
6. Energy efficiency remains under-prioritized, with low awareness beyond Metro Manila. Increasing awareness and support for energy efficiency, especially for SMEs and LGUs, is essential. Implementing public campaigns and financial support initiatives can increase the usage of energy efficiency services thereby contributing to overall energy savings.

We welcome more participation in our energy advocacy. If you would like to learn more, have additional insights, or want to participate in future discussions on this or other subjects please reach out to our Policy Manager at bettina.bautista@mbc.com.ph and Energy Policy Officer at adrian.asoy@mbc.com.ph.

Attendees:

AboitizPower: Chief Strategy Officer Steve Bonz
ACCIONA Energia: Freya Renewables CEO Carola Carrion
ACEN: COO Miguel De Jesus
Alsons Power Group: Head of Legal Atty. Lumen Balboa and Power Economics & Business Intelligence Manager Gim Dawis
British Embassy: Trade and Investment Manager David Rosario
ClientEarth Asia: Energy Systems Lawyer, Tim Guanzon
Climargy: CEO Alexander Ablaza
Climate Smart Ventures: Head of Transaction Advisory Matt Carpio and Senior Associate Sarah Aquino Gomez
Copenhagen Infrastructure Partners: Head of External Affairs Jasper Manlapaz
Embassy of Italy: Commercial Attache Antonio Macaluso
Embassy of the Kingdom of the Netherlands: Senior Economic Officer Gab Hernandez
Embassy of the United States of America: Economic Officer Amy Lau
Esmé Solutions: Regional Dir. Martin Ruby
First Gen Corporation: Strategy Formulation Head Marco Ordoñez
HSBC: Regional Head of Sustainable Finance Sunil Veetil, Country Head of Wholesale Banking Mimi Concha, Financial Institutions Head Jaime Mendejar, and Local Corporates Head Odette Sumpaico
MERALCO: Sustainability Strategy and Reporting Head Lara Sun and Sustainability Strategy Associate Joanna Morden
PJS Law: Atty. Regina Jacinto-Barrientos and Atty. Najha Katrina Estrella
Pollination Group: Associate Director Andrew McConnell and Executive Director William Acworth
Schneider Electric Philippines: Head of Government Affairs Norman Roland Ocana III