The Philippines continues to strive for energy security, affordability, and sustainability, which raises the question: Which should dominate the country’s power mix? In the complex landscape of the Philippines’ energy sector, there is no single technology that offers a one-size-fits-all solution.
During the 3rd Ruperto P. Alonzo Memorial Lecture Series: The Energy Trilemma – An Analysis of the Philippine Situation, Eric Francia, President and CEO of ACEN Corporation, emphasized the necessity of a diversified energy mix rather than exclusive reliance on any single source.
“No technology is perfect, but each one has a role,” Francia said, adding each energy source has strengths and weaknesses, and the country must harness a combination of them to achieve true energy security.
To appreciate the importance of a diversified energy mix, it’s essential to understand the concepts of baseload and peak load in power generation.
Baseload refers to the minimum level of electricity demand that must be met at all times. Baseload power comes from sources that are always running, providing a steady and reliable supply of electricity, which industries, businesses, and households require. Coal-fired, nuclear, hydroelectric, and geothermal power plants are commonly used for baseload generation due to their ability to produce electricity efficiently and continuously. Baseload power plants, however, are not quick to adjust to sudden increases in demand.
Peak load is the time of high demand like hot afternoons or evenings when consumption surges. Peaking power plants meet this demand, ramping up quickly but at higher costs, often using natural gas or diesel.
Coal: The Reliable But High-Emission Workhorse
According to the International Energy Agency (IEA) the country’s energy sector remains heavily reliant on coal, with coal plants supplying 62% of power generation in 2024. This dependence, particularly for baseload power, is expected to continue even as renewable energy’s share is projected to reach 24% by 2027.
Coal-fired power plants are favored for baseload generation due to their ability to provide a stable and continuous supply of electricity. However, they are also the highest emitters of carbon dioxide and other pollutants, contributing to environmental concerns and climate change. Francia acknowledged this issue.
“The disadvantage of coal is it’s the highest emitting. It’s the dirtiest. But coal provides baseload. Yes there will be forced outages but we need that stability. Nagpro-produce ‘yan gabi, araw (It produces power during the day and at night). Over the long term, I think it’s safe to say that reliable coal, arguably, is still the cheapest,” he explained.
Solar and Wind: Rapid Growth with Intermittency Challenges
Renewable energy sources like solar and wind have seen significant growth. Data from IEA showed solar photovoltaic (PV) generation increased by 35% in 2024, with an expected annual growth of 29% through 2027, driven by government incentives and decreasing costs of PV modules. Similarly, wind power expanded by 21% last year and is projected to grow by 24% annually during the same period.
Despite this rapid expansion, both solar and wind energy face intermittency challenges, as their output depend on natural conditions. Wind speeds fluctuate, and solar power is unavailable at night and less effective on cloudy days, making energy generation inconsistent.
Investing in solar and wind also tend to be costlier because it requires large-scale energy storage (e.g., batteries or pumped hydro) to balance supply and demand.
Francia pointed out, however, that solar energy has become more efficient and competitive, although it doesn’t produce power at night.
Natural Gas: A Flexible Yet Costly Alternative
Natural gas, Francia said, serves as a flexible energy source capable of providing both baseload and peaking power. “Gas is great because it can complement renewables.”
He added gas is also a cleaner option because it emits 50% less carbon dioxide than coal. The downside, as Francia pointed out, is that the Philippines relies on imported liquefied natural gas (LNG), which is subject to global price fluctuations, making it more expensive than coal.
The IEA forecasts that natural gas will maintain its 14% share of the electricity mix from 2025 to 2027, continuing to act as a reliable backup for intermittent renewable sources.
Nuclear: High Potential Amidst Public Concerns
Nuclear energy presents a high-capacity, low-emission power source capable of providing consistent baseload electricity. However, it faces challenges related to public perception, safety concerns, and regulatory hurdles. Francia emphasized the need for an open-minded discussion about nuclear energy’s role in the Philippines’ energy future, acknowledging the many questions surrounding its adoption.
Hydropower and Geothermal: Stable but Limited Resources
Hydropower and geothermal energy have long contributed to the Philippines’ renewable energy mix, offering stable and continuous baseload power. However, hydropower faced setbacks in 2024 due to drought conditions, though it is expected to recover with a modest 3% annual growth as weather patterns stabilize.
Geothermal energy provides reliable baseload power but requires significant upfront investment and is geographically limited to areas with suitable geothermal activity. Francia noted that while these sources are important, their expansion potential is constrained, necessitating reliance on other renewables like wind and solar for future growth.
As Francia concluded, the reality is that coal, gas, renewables, and even nuclear must work together. “I can criticize each technology but what is the point Let’s recognize each weakness and let’s address them.”
The Philippines’ journey toward energy security and sustainability requires strategic planning that embraces a diverse energy portfolio. Policymakers and industry leaders must collaborate to implement practical solutions that balance reliability, cost, and environmental impact.
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