Building energy security

(Part 2) In my previous column, I discussed the recent Philippine Institute for Development Studies (PIDS) paper 'How Energy Secure is the Philippines?' by Dr. Adoracion Navarro and her co-authors, presented at a policy forum titled 'Energy Security in the Age of Renewables: Is the Philippines Ready for the Energy Transition?' The paper proposed a broader framework for measuring energy security, moving beyond the traditional concerns of affordability, accessibility, and reliability by adding sufficiency, resilience, and sustainability. It also proposed indicators and forecasts to monitor and assess the country's performance across these dimensions. After the paper presentation, representatives from the Department of Energy (DoE), the Energy Regulatory Commission (ERC), and the private sector (First Gen) shared their insights on the study's findings. There was little disagreement over the framework itself, and the discussion focused instead on what each stakeholder is doing to strengthen energy security, and the challenges and trade-offs that arise. I divide the reactions into three main perspectives: planning, regulation, and industry. From the planning perspective, the DoE summarized its policy and program objectives into the acronym ARC, which stands for Access to Affordable Energy, Reliability and Resiliency, and Clean and Sustainable Energy. It mapped ongoing government initiatives to address gaps in each energy security dimension, in effect showing that government programs already cover the expanded energy security framework. On sufficiency, the DoE commits to clarifying the investment framework to make exploration and development of indigenous resources attractive to investors. On reliability, it is finalizing the Smart and Green Grid Plan to ensure the timely implementation of transmission projects that support the transition toward a clean energy future. On resilience, it is studying the establishment of strategic petroleum reserves. On affordability, it is advancing reforms to promote competition in the power market, accelerate renewable energy integration, and support the transition to cleaner transport. On accessibility, it cited the Microgrid Systems Act of 2022 as a mechanism to fast-track electrification in unserved and underserved areas. On sustainability, the DoE commits to mainstreaming green finance mechanisms and incentivizing cleaner energy choices. From the perspective of regulation, the ERC emphasized achieving the least-cost transition. Electricity prices should reflect not only actual costs but also economic efficiency. On the supply side, the DoE and ERC are implementing the Competitive Selection Process for power supply agreements of distribution utilities serving the captive market. For renewable energy, they continue to implement the Green Energy Auction Program, under which renewable energy developers compete for supply contracts subject to a price ceiling. On the demand side, the ERC aims to further operationalize Retail Competition and Open Access down to the household level. From the industry perspective, the First Gen representative cautioned that focusing primarily on affordability is too narrow. The country has opportunities to pursue greater energy self-sufficiency and sustainability without compromising reliability. Geothermal energy, for example, remains underappreciated despite being one of the few renewable sources capable of providing round-the-clock baseload power. The challenge is to remove barriers that continue to discourage investment. Asked what the country needs at this stage, the industry representative emphasized the importance of balancing technologies that can make better use of today's daytime solar overcapacity. He also pointed to the need for greater attention to geography. Renewable resources, demand centers, and transmission infrastructure are unevenly distributed across our archipelago, requiring careful capacity planning and strategic investment decisions. While regulation has become increasingly robust, there remains a need for stronger communication, collaboration, and coordinated planning across the sector. What, then, do these discussions suggest? My first reflection returns to the question I posed in my previous column: energy security for what? Throughout the forum, there was broad agreement that the objective is to strengthen energy security. The discussion therefore centered on improving each of its dimensions. Yet there was relatively little discussion of the broader developmental purpose that energy security is meant to serve. Looking at the Philippine regulatory context, I do not find this surprising. The country's existing institutional framework largely reflects the philosophy prevailing when the Electric Power Industry Reform Act (EPIRA) was enacted: establish an efficient electricity market, attract investment, provide reliable infrastructure, and development will largely follow. Within this paradigm, energy security naturally becomes an objective in itself. But the country's development challenges today should compel us to revisit that assumption. The energy transition should proceed alongside a broader national agenda that includes rebuilding manufacturing, developing critical minerals, expanding digital industries, strengthening energy sovereignty, and creating better jobs. These ambitions have important implications for the kind of electricity system the Philippines should build. Energy planning should therefore be guided not only by projected demand based on today's economy, but also by the requirements of the economy we seek to create. This leads to my second reflection: the role of government. In my previous column I acknowledged the important role of government in producing information as a public good but noted that information is only one dimension of the State's role. If energy security is understood as serving a broader development strategy, then government's role cannot be limited to facilitating markets or correcting market failures. Markets are indispensable in mobilizing investment, fostering innovation, and responding to price signals. But they cannot determine what the country's energy system is ultimately being built to achieve. That is a strategic function of government. Government must articulate long-term objectives, coordinate investments that no single actor can undertake, build enabling infrastructure and institutions, support technological learning, and ensure that today's energy investments advance tomorrow's development goals. In this sense, government does not merely make markets work better. It provides strategic direction and helps align the evolution of energy markets with the country's long-term development objectives. The just transition likewise acquires a broader meaning. It is not only about reducing carbon emissions while protecting affected workers and communities. It is also about ensuring that the transition itself becomes an engine of development: building domestic industrial capabilities, creating productive employment, strengthening local supply chains, fostering technological learning, and reducing strategic dependence on imported fuels and technologies. Energy security, renewable energy, and the just transition are therefore not separate policy agendas. They are mutually reinforcing components of a broader national development strategy. The challenge is not simply to build a cleaner and more secure energy system, but to build one that can adequately support the structural transformation of the Philippine economy. Nepomuceno Malaluan is co-founder and trustee of Action for Economic Reforms, and a member of its Industrial Policy Team.