Iran crisis exposes PHL energy vulnerabilities

THE Middle East conflict has exposed the Philippines’ energy vulnerabilities and needs to leverage its chairmanship of the Association of Southeast Asian Nations (ASEAN) to steer the bloc towards expanding regional cooperation, a sustainability expert said.

“The Philippines’ role is to strengthen the foundations of its domestic energy system while (advocate for) a more integrated, resilient, and investment-ready ASEAN energy system,” Angelo Kairos T. dela Cruz, executive director of the Institute for Climate and Sustainable Cities, said at the BusinessWorld Economic Forum on Monday.

As this year’s ASEAN chairman, the Philippines is expected to push for stronger regional cooperation on energy security and supply resilience as the Iran war roils global energy markets.

“As a net energy importing region, ASEAN continues to be exposed to fossil-fuel volatility, making energy security and economic resilience central to policy priorities among its members,” Mr. dela Cruz said.

He said the region is moving towards more diversified and decentralized energy systems, with growing renewable energy deployment across various national markets.

Mr. dela Cruz said transitioning to renewable energy is becoming “increasingly urgent.”

“The conversation is now shifting. The question is no longer whether the Philippines is ready for renewable energy investments, but how these investments can be structured to deliver impact across national infrastructure, local communities, and end-user systems,” he said.

Jonathan Back, group chief finance officer and chief strategy officer of renewable energy developer ACEN Corp., said the Philippines is not alone in facing challenges arising from the Middle East crisis.

“This is absolutely not unique for the Philippines. I think across the world, every government and regulator is asking how to become more energy independent, how do we become resilient?”

Currently, ACEN has about 7 gigawatts of attributable renewable energy capacity, including operational, under-construction, and committed projects. The company operates in the Philippines, Australia, Vietnam, India, Indonesia, Laos, and the US.

Mr. Back said the Philippines has an advanced energy market structure despite its archipelagic challenges.

Mr. Back said increasing the share of renewable energy in the power mix could be complemented by building energy storage systems to enhance integration and help stabilize the grid.

“We think that is the key way to really boost that 35% by 2030 and 50% by 2040, to make it even faster,” he said, referring to the government targets for the share of renewables in the power mix.

Sharon Ocampo-Montañer, director of market operations service at the Energy Regulatory Commission, said the Iran war continues to expose weaknesses in global energy supply chains.

“For a country like ours, highly dependent on imported fuel, these disruptions translate directly into rising costs and uncertainty for households and businesses,” she said.

“But while these challenges are real and immediate, they do not define us. What defines us is how we respond,” she added.

Ms. Ocampo-Montañer said the regulator has taken steps to stabilize the system and protect consumers, by ensuring the continued operation of the spot market and easing cost pressures through the suspension of certain charges.

“Under its ASEAN leadership, the Philippines is actively advancing initiatives to move towards a more interconnected and resilient regional energy system,” she said.

“For an archipelagic country like us, this presents challenges but it also opens up opportunities for greater cooperation, improved system reliability and access to more competitive energy resources,” she added. — Sheldeen Joy Talavera