PhilStar 52, SONA 2025 and energy security

SONA 2025 and energy security

ENERGY, INFRA AND ECONOMICS - Bienvenido Oplas Jr. - The Philippine Star 

July 31, 2025 | 12:00am

https://www.philstar.com/business/2025/07/31/2461931/sona-2025-and-energy-security

 

Let me review what President Marcos has said in his four State of the Nation Address (SONA) on energy policy.

 

“Our search for new power sources should always be with an eye to improving the energy supply mix between traditional and renewable sources…. In the interim, natural gas will hold the key…. In the area of nuclear power, there have been new technologies developed that allow smaller scale modular nuclear plants and other derivations thereof.”

 

– First SONA, July 25, 2022

 

“We finally have a unified national grid, with the interconnection of the Luzon, Visayas and Mindanao grids. The “One Grid, One Market” will enable more efficient transfers and more competitive pricing of electricity throughout the country.”

 

– Second SONA, July 24, 2023

 

“The energization of the Mindanao-Visayas Interconnection is a defining moment not only for the power sector but for the entire country…. The “unified Philippine grid” is a fulfillment of this dream… patuloy tayo sa padadagdag ng mga imprastraktura ng kuryente na magpapababa ng presyo sa kalaunan.”

 

– Third SONA, July 22, 2024

 

“Naririyan pa rin ang mga problema sa enerhiya na damang-dama ng bawat Pilipino, kagaya ng: tatlong milyong kabahayan na wala pang kuryente; palagiang brownout; at ang mataas na presyo ng kuryente…. Kaya, binibilisan nating mabigyan ng koneksyon at pinapalakas pa lalo ang kakayahan ng ating gumagawa ng kuryente.”

 

– Fourth SONA, July 28, 2025.

 

The President has emphasized three things: bigger power generation, balance energy mix and nationwide grid interconnection. He even mentioned the need for nuclear power in his first SONA.

 

The three problems of many non-electrified places and houses, occasional brownout, and higher electricity prices have one common denominator:  insufficient power supply and generation (plus their distribution and retail supply) relative to power demand. So we must keep expanding power generation, balance between traditional thermal sources (coal, gas, oil) and renewables like hydro, geothermal, solar and wind.

 

The two-weeks of on-off rains (July 17-29) due to southwest monsoon or “habagat” plus three storms have led to a “classless” society, no classes from elementary to college for more than a week.

 

I checked data from the Independent Electricity Market Operator of the Philippines (IEMOP), for the billing period June 26 to July 25 in 2023, 2024, 2025. My hypothesis was that solar and wind output and percent share to total generation would decline because  monsoon season is known for dark sky, little or zero sunlight even during daytime, and non-windy. So it was coal that carried the burden of giving 24/7 electricity to many households during the dark weeks.

 

The data disproved my hypothesis. The share of coal to total power generation declined from 62.1 percent in 2023 to 61.8 percent in 2024 and 55.6 percent in 2025. And the share of solar plus wind increased from 2.4 percent in 2023 to 3.6 percent in 2024 and 4.2 percent in 2025. Rising but still small overall, so what energy source covered for the decline in coal share? Hydro? Geothermal?

 

Not hydro or geothermal. It was natural gas, the share has increased from 15.1 percent in 2023 to 16.6 percent in 2024 and 20.2 percent in 2025. Wow.

 

And the good guys in the room are South Premier/Ilijan and Excellent Energy Resources Inc. (EERI) LNG plants in Batangas, jointly owned by Meralco Power Gen (MGEN), Aboitiz Power (AP) and San Miguel Global Power (SMGP). Towards end-May and full month of June, July onwards, 2,500 MW of LNG power came in full force.

 

Last Tuesday Meralco released its first half 2025 consolidated core net income (CCNI). Huge, P25.5 billion, which is 10 percent higher than P23.2 billion of H1 2024. Big contribution came from MGen, their share to total CCNI increased from 27 percent in 2024 to 37 percent in 2025 or P9.4 billion out of the P25.5 billion.

 

Another good thing going for MGen is the approval and reaffirmation of the Department of Energy (DOE) that Atimonan coal is a committed project even before the  Greenfield Coal Moratorium Policy of the DOE in 2020.

 

That Atimonan coal in Quezon province is a beautiful project. It is modern, an ultra-supercritical (USC) and high-efficiency low-emissions (HELE) technology that can deliver 1,200 MW to the Luzon grid.

 

In a press statement, MGen president and CEO Emmanuel Rubio is bullish when he said that: “We welcome the DOE’s reaffirmation of the Atimonan Energy project’s non-coverage from the coal moratorium policy…. our investment in Atimonan will help address today’s needs while preparing for tomorrow’s opportunities. We will employ advanced and efficient technologies to ensure our operations support economic and societal development – all while adhering to the company’s commitment to sustainability.”

 

Two birds, LNG and coal, with one brain. Rubio joined MGen only in July 2024 so in his 12 months performance as head of the company he has delivered (a) more electricity both in Luzon grid via Ilijan and EERI and in Singapore via Pacific Light Plant, (b) more revenue and profit for the mother company and (c) secured the go signal to proceed with Atimonan coal. I think the guy is a finance genius.

 

A 55-percent share to total power generation means coal remains the backbone of the Philippines to remain bright, have lights and aircon for households and companies. I hope that AP and SMGP will also expand their existing coal portfolio via brownfield investment. We just need more electricity, whether from conventional or renewables, for our energy security. Then President Marcos can report in his fifth or sixth  SONA, that the number of non-electrified houses is down to insignificant number.