Cusi bats for LNG investments

Former Energy Secretary Alfonso G. Cusi is calling for power stakeholders to break free from import dependence by pouring investments into the development of new power resources such as liquefied natural gas (LNG).

While he emphasized that the ultimate goal remains a full transition to renewable energy sources, Cusi said LNG can serve as a crucial bridge in reducing carbon emissions and ensuring energy independence.

“We need to break free from import dependence to be energy secure. We have our own coal but the mining of such resources still remains an issue, whether we really allow this so we have to tap our national resources,” Cusi said in an interview on Straight Talk, the online show of the Daily Tribune.

“Additionally, there are lots of investments in renewable energy from local and foreign investors. We cannot put everything in renewable energy. We have LNG. It is a good source of transition fuel,” he explained.

In his time, Cusi strongly advocated for the protection of oil and gas reserves in the country’s exclusive economic zone (EEZ).

He emphasized that any foreign state’s involvement in petroleum activities within the EEZ without prior authorization from his office was considered a violation of the country’s exclusive licensing authority over petroleum and other resources, especially in the West Philippine Sea.

The Philippines and China signed a memorandum of understanding in 2019 to move forward talks and possible areas of cooperation on oil and gas exploration in the West Philippine Sea.

“During my time, I always said that we should stop creating conflict in these areas. Partnerships are necessary in these resources-rich areas so we can utilize it,” he said.

LNG partnership

In a related development, the Philippines and Indonesia have agreed to have their respective business sectors work closely, especially when there are critical supply constraints on coal and LNG to ensure energy security.

Transitioning to clean energy to achieve the country’s energy security goals would require a transition fuel capable of providing baseload generation that would fill the gap when existing coal-fired power plants start to retire.

Natural gas, including LNG, is a suitable transition fuel where the private sector investments in this technology will be facilitated to address the variability of renewable energy capacity additions and ensure the reliability and security of the power system.

The two countries are major sources of minerals needed for the energy transition and both have vast potential for solar, wind, and ocean energy production.

Coal significance

Based on government data, the Philippines has been a dependable market for Indonesian coal, accounting for nearly 98 percent of total Philippine coal imports in 2022 — consistently increasing from 88 percent in 2017.

However, following the failure of Indonesian coal mines to provide an adequate supply to their domestic power plants and markets, the Indonesian government issued a coal export ban in January 2022.

The Philippines imported more than 80 percent of its coal requirements in 2023 and even more than 90 percent in previous years.

Since then, the Philippines has exerted diplomatic efforts to ensure a steady flow of coal supply from Indonesia.

In 2020, the Department of Energy (DoE) declared a moratorium on greenfield coal power plants to support the shift to a supposedly more flexible power supply mix.

Cusi then said the moratorium aided the establishment of a power system flexible enough to accommodate the entry of new and cleaner indigenous sources.

Amid a seemingly aggressive drive to promote clean energy sources, coal still took up 43.9 percent of the entire on-grid installed capacity of 12,406 MW in 2023.

Off-grid, the total installed capacity reached 684.666 MW. Of this, coal’s share was 2.2 percent.