AboitizPower chief hopes to see a long-term plan for Philippines’ power industry

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Danel Aboitiz hopes the government can craft a stable and well-conceived energy plan that transcends administrations

MANILA, Philippines – If AboitizPower president and chief executive officer Danel Aboitiz could ask for one thing, it would be a long-term plan for the Philippine energy sector.

In a Rappler Talk interview with 2021 Nobel Peace laureate and Rappler chief executive officer Maria Ressa, Aboitiz said he hopes the government can craft a stable and well-conceived energy plan that transcends administrations.

“With more certainty, we can make longer term bets and make more efficient decisions [and] efficient allocations of capital,” he said.

He also urged his colleagues in the energy sector to support the country’s move towards becoming an upper-middle income country by providing reliable and affordable power to attract more foreign investors.

The road to renewable energy

According to Aboitiz, the Philippines is meeting its energy demands for now as new projects begin to go online. However, he estimated that the country will need to generate around 700 more megawatts annually to preserve its reserve margin.

He also noted government initiatives to catalyze the Philippines’ shift to renewable energy (RE), such as the Department of Energy’s (DOE) Green Energy Auction Program (GEAP).

Aboitiz thinks the administration’s goal of sourcing half of its power needs from RE is still achievable although slowly. He added, however, that the government’s reference scenario of sourcing 35% of its energy from renewables by 2040 is more feasible.

“They’re imminently launching the renewable energy market. So, all the enabling mechanisms are being put in place. You’ve also recently seen the natural gas bill that will facilitate upstream natural gas production, make its way through both the House and the Senate. So I think you’ll see diverse sources of energy come into play,” he said.

The DOE initially aimed to complete the third energy auction in December 2024. However, the auction, which will cover geothermal and hydropower facilities, was postponed to 2025.

As the government continues its push for clean power, Aboitiz believes that the concentration of risk remains a challenge for the energy sector. He offered the Philippines’ reliance on coal as an example, since the country imports most of its coal needs from Indonesia.

Despite the government’s push for renewables, Aboitiz believes that coal still has a place in the Philippines’ grid as it is a cheap power source. What the shift to renewables can do, however, is diversify the country’s power mix.

“I think it’s certainly something that has a place in our generation mix. But some diversity I think will do as well,” he said.

For his family’s power business, Aboitiz said that their concentration of risk lies in coal’s share in its portfolio and the company’s focus on the domestic market. He hopes to address this by expanding AboitizPower’s distribution business, tapping into international markets and building out the firm’s renewable portfolio.

AboitizPower earmarked P73 billion in capital expenditures in 2024, of which 72% was allocated for its RE pipeline. It aims to build around 3,600 megawatts of new RE capacity by 2030.

AboitizPower has 48 power generation facilities nationwide, including the 173-megawatt Calatrava solar project in Negros Occidental and the 300-megawatt Therma South facility in Davao del Sur. It also owns the second- and third-largest power distributors in the country, Visayan Electric and Davao Light.
– Rappler.com