=== pep-2023-2050-vol3-section-c1-page-031.pdf === Article 3 of the Agreement provides the general guiding principles on nationally determined contributions to the global response to climate change by all Parties, while recognizing the need to support developing country Parties for the effective implementation of this Agreement. Meanwhile, Article 4 states that all Parties should act to protect the climate system based on equality and "common but differentiated responsibilities and respective capabilities." Likewise, developed country Parties should take the lead role in mitigating emissions, provide the developing country Parties with new and additional financial resources to meet the full cost that will be incurred to reduce emissions and implement adaptation actions, as well as incremental costs of technology, capacity building, and other mitigation measures. C. RESILIENCY AND SECURITY OF ENERGY INFRASTRUCTURE In an era defined by rapid technological advancements, evolving geopolitical dynamics, pressing climate change effects, and transnational threats, enhancing resiliency and ensuring security of energy-related infrastructure and facilities should be accorded with paramount importance. This endeavors to embrace a whole-of-nation and government approach to effectively respond the multifaceted forces and vulnerabilities that have significant impacts on critical energy infrastructures and systems in the country. Energy remains as one of the sectors most vulnerable to natural and human-induced hazards. Based on the National Electrification Administration’s (NEA) report, the Electric Cooperatives (ECs) endured massive damage from tropical cyclones. In 2021, Super Typhoon Odette, internationally known as Typhoon Rai, resulted in estimated damage to ECs of more than PhP283 million, while in 2022 Typhoons Karding (Typhoon Noru) and Paeng (Tropical Storm Nalgae) brought damages of around PhP226 million. From 2014-2020 alone, ECs incurred total damages costs of PhP6.55 billion due to natural disasters. Moreover, the Energy Regulatory Commission (ERC) reported more than PhP10 billion from Force Majeure Event Capital Expenditure (CAPEX) Applications of the distribution utilities (DUs) and the National Grid Corporation of the Philippines (NGCP) from 2008-2023.7 Aside from the damages, the long period of energy disruption likewise affected economic activities in the country. The Philippine Statistics Authority (PSA) conducted an analysis translating the damages and the corresponding economic impacts of energy disruption, which revealed that the economic cost of losing a kWh of load amounts to PhP247.8 With the staggering losses not only to human lives and properties but also to the economy, there is an urgent need to ensure the climate and disaster resiliency of the energy infrastructures and facilities. Current Policy Initiatives on Climate and Disaster Resilience Climate and Disaster Resilience under the Philippine Development Plan (PDP) 2023-2028. As climate change remains highly relevant, the inclusion of the climate change agenda in the PDP 2023- 2028 will further reinforce the commitment of the government and key stakeholders and partner institutions to deliver key climate actions. Chapter 15 of the PDP 2023-2028, titled “Accelerate Climate Action and Strengthen Disaster Resilience,” states that "By 2028, communities, institutions, and the natural and built environment in the Philippines are more resilient to the impacts of natural hazards and climate change.” The primary outcomes to be pursued to address the challenges brought by climate change include: 1) increasing climate and disaster risk resilience of communities and institutions; 2) enhancing ecosystem resilience; and, 3) enabling a transition to a low-carbon economy. With these outcomes, the goal is to improve the governance and intersectionality of climate change and natural hazard resilience.9 7 8 9 Energy Regulatory Commission, Presentation on Challenges and Best Practices on CAPEX Application on Force Majeure, Energy Resiliency Roadmap Workshop, May 31, 2023. New Platform Group, LLC, Presentation on Embedding Resiliency in Investors' Decisions, Mr. Jose Manuel Barroco, 2023 Energy Resiliency Forum, July 25, 2023. National Economic and Development Authority (NEDA), Philippine Development Plan 2023-2028, 2023, 265-367 Vo l u m e 3 24 === pep-2023-2050-vol3-section-c1-page-032.pdf === Climate Change Adaptation and Resilience. The National Climate Change Action Plan (NCCAP), a local operational plan, has been formulated through the National Framework Strategy on Climate Change (NFSCC). The NCCAP provides a set of strategic actions to be implemented for the mitigation and adaptation of climate change, as well as sustainable development in the Philippines, in which sustainable energy is considered as one of the seven (7) priority areas.10 Moreover, the energy sector will be identifying medium- and long-term adaptation needs based on the National Adaptation Plan (NAP) which envisions the country being able to adapt to the accelerating climate change.11 National Disaster Risk and Reduction Management Plan (NDRRMP) 2020-2030. To implement Republic Act (RA) 10121 or the Philippine Disaster Risk Reduction and Management (PDRRM) Act of 2010, the National Disaster Risk Reduction and Management Council (NDRRMC) developed the NDRRM Framework (NDRRMF) in 2011. Said framework contains a comprehensive DDR community-based approach to address all sectors and hazards. The NDRRMF operationalization led to the development of the NDRRMP. The NDRRMP fulfills the requirement of the PDRRM Act covering four (4) thematic areas, namely: 1) Disaster Prevention and Mitigation, 2) Disaster Preparedness, 3) Disaster Response, and 4) Disaster Rehabilitation and Recovery. This shall serve as the roadmap toward the realization of the vision of the NDRRMF.12 The continuous update of the NDRRMP ensures its relevance and effectiveness to the evolving risks of disasters faced by the country. With this, the NDRRMP 2020-2030 establishes the linkage between DRRM, climate change adaptation, and human security by focusing on climate and disaster risks. National Security Policy (NSP) 2023-2028. The NSP is the overarching policy document that spells out the aspirations and defines the strategic direction of the country as a nation-state. Under Chapter 3, the government is mandated to: 1) protect and secure energy supply against threats such as cyberspace, price shocks and distortions, and disruptions, among others, 2) protect critical infrastructure against climate change and human-induced hazards, 3) sustain and develop energy sources, 4) diversify energy mix with the use of more indigenous sources, 5) develop renewable energy sources to reduce carbon emissions and support the country’s growing economic demands, and 6) promote energy efficiency as a way of life.13 National Cybersecurity Plan (NCSP) 2023-2028. The rapid rise of digitalization from robust technological innovations in the past years brought challenges to national security as increasing dependence on technology also gives rise to crimes committed in this domain. Hence, the government proactively takes precautionary measures to ensure security of this domain on national defense and the security of cyberspace. Supplementing the key legislations to address the cybersecurity challenges such as RA 10173 or the “Data Privacy Act of 2012”14 and RA 10175 or the “Cybercrime Prevention Act of 2012”15, the Department of Information and Communications Technology (DICT) by virtue of RA 10844 or the “Department of Information and Communications Technology Act of 2015” initiated another important development in strengthening the country’s cybersecurity posture through the adoption of the NCSP 2023-2028. This plan outlines the priority programs of the government to improve cybersecurity in the country toward its mission of “Ensuring a Trusted, Secure, and Reliable Cyberspace for every Filipino”, which is embodied in six (6) pillars. Supplemental to the DOE Energy Resiliency Policy (ERP). Recognizing the need to address any existing gaps and ensure the adequacy, responsiveness, and effectiveness of the Energy Resiliency Policy, the DOE issued a supplementing policy in 2022. The Department Circular (DC) 2022-06-0028, titled “Supplementing the DC201801-0001 on the Energy Resiliency Planning and Programming of the Energy Sector and on Task Force on Energy Resiliency (TFER) Functions and Structure to Mitigate Impacts of Disasters” or the Supplemental ERP was issued on 24 June 2022 to bring further enhancement to DC2018-01-0001. Climate Change Commission, NCCAP 2011-2028, 2011 Ibid. NDRRMC, NDRRMP 2011-2028, 2011 13 NSP 2023-2028, 23. 14 RA 10173. 15 RA 10175. 10 11 12 25 Philippine Energy Plan === pep-2023-2050-vol3-section-c1-page-033.pdf === The provisions under the Supplemental ERP have been modified to aid in the integration of energy resiliency planning and programming to increase the disaster risk reduction efforts of the energy sector by focusing on the following key areas: 1. Improved Energy Resiliency Guiding Principles. The guiding principles in the Supplemental ERP have been enhanced and aligned with the DRRM framework by expanding the original four guiding principles to six as shown in Figure 16. Figure 16. Improved Energy Resiliency Guiding Principles Based on The Supplemental ERP 2. Enhanced Resiliency Compliance Plan (RCP) Categories. The RCP Categories have been expanded by adding disaster risk financing, insurance, rehabilitation, and recovery to provide comprehensive coverage and address key aspects of the financial resilience of energy companies after a disaster (Figure 17). Figure 17. Enhanced Resiliency Compliance Plan (RCP) Categories based on the Supplemental ERP 3. Expansion of the Organizational Structure and Functions of the TFER. Empowered with coordination, integration, supervision, monitoring, and evaluation functions related to energy resiliency, the TFER serves as a central authority in harmonizing mitigation, preparedness, response, and restoration efforts before and during calamities and emergencies. Vo l u m e 3 26 === pep-2023-2050-vol3-section-c1-page-034.pdf === Since its creation in 2018, the TFER has actively responded to various natural and human-induced disasters. Recognizing the significance of its role, the organization and function of the TFER have been expanded through the Supplemental ERP. The updated composition of the TFER includes the attached and cooperating agencies grouped into the Task Group on Power focused on the immediate restoration of power supply and the Task Group on Oil and Gas responsible for implementing contingency measures to ensure an adequate supply of petroleum products in the event of a disaster or oil disruption (Figure 18). Figure 18. Expanded Organizational Structure and Functions of TFER based on the Supplemental ERP Additionally, the TFER has the flexibility to establish Technical Working Groups (TWGs) to address specific issues and create "Task Groups" for specific concerns as necessary. The TFER can seek support from relevant security agencies, non-governmental organizations (NGOs), development partners, academic institutions, and private organizations during disaster response and in the implementation of other energy resiliency-related matters. Figure 19. Expanded TFER Functions based on the Supplemental ERP 27 Philippine Energy Plan === pep-2023-2050-vol3-section-c1-page-035.pdf === As the lead agency, the DOE collaborates with the NDRRMC, ERC, and Inter-Agency Energy Contingency Committee (IECC) to ensure effective coordination and synergy in disaster response and energy contingency planning, among others. To further improve the responsiveness and relevance of TFER on DRRM, the TFER must carry out its expanded functions as presented in (Figure 19). The functions of TFER are aligned with the NDRRMP priority areas, long-term goals, and objectives, specifically on Disaster Prevention and Mitigation, Disaster Preparedness, Disaster Response, and Disaster Rehabilitation and Recovery. 4. Energy Resiliency Awards and Recognition. The DOE shall establish an award and recognition to encourage energy stakeholders and industry participants to integrate energy resiliency measures into their planning and programming as incentive to the industry. Pursuant to Section 6 of the Supplemental ERP, energy participants that comply with the RCP requirements and demonstrate validated outputs and outcomes based on the prescribed energy resiliency plans and programs as specified in Section 5 of the DC 2022-06-0028 shall be entitled to the Energy Resiliency Excellent Awards (EREA). Energy Resiliency Roadmap and Framework 2023-2028 Consistent with the various plans and programs on resilience, the DOE, being the lead agency of the TFER, envisions climate change adaptive and resilient energy infrastructures and systems for enhanced energy security. Thus, the goal is to transform into a climate-proof and resilient infrastructure and systems to withstand, reduce the impact, recover faster, and ‘Build Back Better’ against evolving hazards and threats to sustain the socio-economic development of the country. The DOE, with the cooperation and support of its energy stakeholders, concerned government agencies, and other entities, plans to realize the vision and accomplish its goal through the 19 Outcomes and corresponding outputs specified to address the climate change concerns and threats of natural and human-induced hazards. Figure 20. Energy Resiliency Roadmap and Framework Vo l u m e 3 28 === pep-2023-2050-vol3-section-c1-page-036.pdf === The first three (3) Outcomes are focused on adopting the appropriate and relevant policies and plans set by the DOE as a guide for the energy sector. Meanwhile, Outcomes 4 to 17 are distributed across the four thematic pillars under the NDRRMP. Lastly, Outcomes 18 and 19 focus on addressing the human-induced hazards, particularly those threatening the physical security of critical infrastructures, disrupting the energy supply chain, and systems vulnerable to cybersecurity (Figure 20). A. Major Outputs for Climate-proof and Disaster-resilient Energy Infrastructures and Systems There are 14 Outcomes with 22 corresponding Outputs/Deliverables targeted to be initiated and accomplished from 2023 to 2028. The various outputs will undergo various key activities to be performed by the assigned Task Groups or TWGs under TFER. Some of the programs will be implemented in collaboration and support of the different stakeholders, development partners, and NGOs. 1. Disaster Prevention and Mitigation * Outcome 4: Standardized assessment framework and methodology for the RCPs and Energy Resilience Scorecard. Energy Resilience Assessment Framework and Methodology (ERAFM). The ERAFM is a comprehensive approach that will be developed to assess, manage, and enhance the resilience of energy infrastructures and systems, particularly in the face of climate change and human-induced hazards. The DOE, in collaboration with the United States Agency for International Development-Energy Secure Philippines (USAID-ESP) and other energy stakeholders, is working towards the development of a standardized ERAFM that encompasses various components and processes. This framework aims to effectively identify and assess potential hazards and vulnerabilities while developing adequate and implementing solutions to increase the resilience of the energy sector. Based on the National Renewable Energy Laboratory's (NREL) "Energy Resilience Assessment Methodology for Sites, Bases, and Campuses", this methodology consists of six processes, namely: 1) assessing the baseline resilience; 2) identifying and scoring hazards and vulnerabilities; 3) analyzing risks; 4) identifying and prioritizing mitigation actions; 5) developing an action plan; and, 6) implementing solutions. The ERAFM shall build upon this framework by expanding its scope and enhancing its applicability to the Philippine energy context. RCP Assessment. The Energy Resiliency Policy issued in 2018 enjoined all energy industry participants to submit an RCP to the DOE, which shall contain structural and non-structural measures options, to gauge infrastructure and human resource preparedness during and in the aftermath of disruptive events. The DOE, in partnership with the USAIDESP, conducted the assessment of the 161 RCP submissions for C.Y. 2018-2021 from the power generation companies, transmission, DUs, and oil and gas both from downstream and upstream stakeholders (Figure 21). Figure 21. RCP Assessment Summary of Results Based on the assessment, the ECs had the lowest and declining turnout of RCP submissions from 2018-2020. The ECs encountered difficulty in accomplishing the RCP together with the other requirements such as the Vulnerability and Risk Assessment (VRA), Emergency 29 Philippine Energy Plan === pep-2023-2050-vol3-section-c1-page-037.pdf === Response Plan (ERP), and Mitigation Plan (MP) pursuant to RA 11039 or the Electric Cooperative Emergency and Resiliency Fund (ECERF) Act. Likewise, a low submission rate was also observed from upstream oil and gas wherein only two (2) companies submitted an RCP out of the 19 companies. On the other hand, the RCP submission rate from the downstream oil and gas was at 80.0 percent or 16 out of 20 companies. In order to address the low turnout and increase compliance, the RCP template shall be improved based on the inputs from the previous submissions of the energy stakeholders and from a series of orientation activities to be conducted. Correspondingly, the National Power Corporation (NPC) and NEA, in coordination with DOE, shall also develop the standard RCP template that incorporates the inputs from the VRA, ERP and MP. Likewise, the updated RCP templates shall be linked with the energy resilience scorecard (ERS). The increased and improved RCP submissions and compliance of energy stakeholders will lead to more reliable baseline data on energy resilience-related information and will eventually be used as a reference for the policy development of the energy resiliency standards, risk-transfer mechanisms, and investments, among others. Figure 22. ERS Development Timeline of Activities Energy Resiliency Scorecard. The ERS is a self-assessment tool that determines the status of energy resiliency by measuring the ability of an organization or facility to prepare, withstand, and recover from disruptions due to natural or humaninduced hazards. This scorecard will be used to monitor the progress of an energy facility in terms of energy resilience over a period, and not as a tool for auditing. Moreover, the benefit of the ERS goes beyond the outcomes as it can also be considered as basis of financial institutions (FIs) for funding and investment as well as insurance, among others. This project, which aims to be the first metric or index being developed specific to the resilience of energy infrastructures, is being undertaken by the DOE-TFER Secretariat in partnership with the USAID-ESP. The development of the ERS will be based on a rigorous process to ensure its responsiveness, appropriateness, and adequacy to the resiliency needs of the energy sector. The pillars and key areas of the ERS were determined based on existing scorecard and framework, such as the: 1) United Nations Disaster Risk Reduction’s (UNDRR) 10 Essentials for Making Cities Resilient; 2) Integrated Resource and Resilience Planning (IRRP) Framework; and, 3) the DOE-RCP Categories from the Energy Resiliency Policy. To finalize and test the content comprehensiveness, appropriateness and practicality of the scorecard, there will be a series of key activities and the program will be conducted in three (3) phases in order of priority (Figure 22). For Phases I and II, the DOE in partnership with USAID-ESP conducted a workshop for DUs in February 2023, which consulted the private DUs and ECs. The consultation with the power generation companies, NGCP and National Transmission Company (Transco), and the National Power Corporation-Small Power Utilities Group (NPC-SPUG) subsequently followed in April. Consultations with the off-grid power facilities and oil and gas industry facilities are scheduled in 2024. The next key activities include: 1) the recalibration of the indicative measurement scale, the scoring system, and references linked to the RCP; 2) pilot testing of selected energy companies in Luzon, Visayas, and Mindanao; 3) final consultation and adoption of the ERS; and, 5) evaluation of RCP submissions based on the ERS. Vo l u m e 3 30 === pep-2023-2050-vol3-section-c1-page-038.pdf === * Outcome 5: Incorporated and adopted energy resiliency planning and programming by the energy sector industry participants and stakeholders IECs, Orientation and Guidebook on RCP and ERS. The DOE aims to increase compliance with the RCP submission and ERS self-assessment to improve the baseline data on energy resiliency. As such, the DOE shall conduct a series of IEC Campaigns and orientations on how to accomplish the updated RCP template and the ERS in order to boost compliance of the energy stakeholders on the RCP submission and use of the ERS as self-assessment tool. Moreover, a self-learning module on the RCP and ERS shall be developed as a reference in accomplishing the RCP and ERS. Compliance monitoring and validation of RCP submissions together with the ERS shall be periodically conducted by a Resiliency Field Assessment Team (RFAT) composed of the DOE and concerned TFER member agencies. * Outcome 6: Organized collection, retrieval, processing, and data management of energy resilience-related data and information. * Outcome 7: Incorporated disaster prevention and mitigation strategies and measures based on science and risk-based information to reduce risks and vulnerabilities. Energy Disaster Information Management System (EDIMS). The availability of accurate information and its smooth flow is one of the most important aspects of disaster risk management. The timely reporting of relevant information enables key decision-makers and emergency responders to efficiently direct emergency responses, which is crucial for the preservation and protection of life. With this, the DOE included the development of EDIMS in the Information Systems Strategic Plan (ISSP) 2024-2026 in line with Sections 7.1.2 and 7.1.11 of the DC2022-06-0028 (Supplemental ERP). The EDIMS is a unified web platform consisting of two integrated modules: • Energy Sector Hazard Exposure Data and Map – This module is composed of an integrated platform with a centralized, comprehensive, and unified database of energy infrastructures from the power and oil sectors overlayed to different hazard exposure data and converted into maps of the energy facilities. This can be used for vulnerability and risk assessment and contingency planning. • TFER Disaster Information Monitoring Dashboard – This module is an integration of a datasharing platform for real-time monitoring of the status of the power and oil supply situation before, during and after a disaster. This requires a harmonized reporting template to include a database and statistics on damages and effects of disasters on the energy facilities and has the capability to produce an online disaster information dashboard and reports. The key activities cover a Technical Needs Analysis of the design of the platform, collaboration with the Department of Science and Technology-Philippine Institute of Volcanology and Seismology (DOST-PHIVOLCS) for the hazard exposure mapping, and undertaking of a Memorandum of Agreement (MOA) with the different energy stakeholders for the data sharing and privacy concerns. Energy Resiliency Management System (ERMS). The ERMS is a web-based system to collect, consolidate, store, and monitor the RCP submissions of the energy stakeholders and participants. Additionally, part of this system would be an online version of the ERS. Said system shall improve the efficiency of the RCP monitoring and submission by providing an online system and repository. On the other hand, the ERS provides the status of the resilience of the energy sector facilities, which can be monitored by the energy companies through a secured account. * Outcome 8: Increased structural integrity and resilience of power system and oil and gas supply chain and infrastructures to withstand or minimize adverse effects of climate change, hazards, and disruptive events. * Outcome 15: Developed and adapted to evolving resiliency standards for energy facilities and systems to ensure timely recovery and minimal damage and losses through reconstruction and rehabilitation of energy infrastructures aligned with the “Build Back Better” principle. 31 Philippine Energy Plan === pep-2023-2050-vol3-section-c1-page-039.pdf === Improving Energy Resiliency Standards. Improving Energy Resiliency Standards, as indicated in Section 2.1 of the Supplemental ERP, will play a critical role in disaster prevention and mitigation, as well as disaster rehabilitation and recovery. Upgrading the existing standards on resiliency will help withstand or minimize the impacts of disasters on energy facilities, and therefore essential for the swift restoration of energy services following a disruption. This aims on shorter or minimal interruptions of power services and disruption in the oil and gas supply chain. Based on recent disaster events, the damage to energy facilities from strong typhoons has been an annual and cyclic occurrence wherein most of the ECs are only able to build back facilities for the sake of restoring power services. Hence, the top priority is to improve the energy resiliency standards of the ECs and incorporating the principle of “Build Back Better”, where post-disaster reconstruction shall not only be restored to its pre-disaster condition but incorporate a higher level of resiliency standards, as well as climate change and mitigation measures in all postdisaster rehabilitation and recovery interventions.16 Energy Resilient Systems for Critical Infrastructures for On-Grid and Off-Grid Areas: Islanding and Micro-Grid System Design. Developing energy resilient systems for critical infrastructures both ongrid and off-grid areas will be a key priority of the DOE as part of its goal to minimize disruptions of the economic sectors. For on-grid areas, the DOE will study the microgrid development that can isolate from the main power network and operate autonomously or implement islanding capability in case the main transmission highway gets affected by a disaster or disruptive event. This project includes establishing standards and regulations for the design, installation, and operation of islanded and microgrid systems. The microgrid or islanding capability aims to provide immediate power supply to essential services like hospitals, telecommunications, water supply, military and police camps and emergency response. In off-grid areas, the DOE plans to utilize standalone power system, such as solar-plus-storage systems to energize critical infrastructures17. The DOE also seeks to promote renewables in power system designs to reduce emissions and increase the resilience and sustainability of these off-grid power systems. The DOE's strategy involves a holistic and collaborative approach with relevant agencies to review and resolve regulatory, financial, and technical barriers. With proper implementation, energy-resilient systems can help address the nation's critical infrastructure gaps, satisfy basic energy needs in remote regions, and strengthen overall resilience to shocks and stresses. The DOE, in collaboration with concerned stakeholders, will then provide guidelines, financing mechanisms, and technical assistance to stakeholders in accordance with RA 11646 or the Microgrid Systems Act to successfully implement these needed energy-resilient measures and solutions. * Outcome 9: Formulated comprehensive, flexible, and effective policies aimed to promote energy resiliency investment and increased financial response capacity of energy companies to recover from the effects of natural and human-induced disasters. Energy Resiliency Investments. Investing in adaptation and mitigation strategies not only enhances the sector's resilience but also fosters sustainable practices and reduces carbon emissions. However, these initiatives must secure the necessary funding for adaptation and mitigation plans. There are various funding mechanisms that can be deployed like the Public-Private Partnerships and other innovative financing platforms to bring together government agencies, energy stakeholders, and development partners to pool resources and expertise. These mechanisms attract private investment into sustainable energy projects, alleviating the burden on consumers, while propelling the transition towards a low-carbon future. In alignment with these goals, the DOE will be working closely with the Climate Change Commission (CCC) to access viable international climate finance available, such as but not limited to the Green Climate Fund (GCF), Global Environment Facility (GEF), Adaptation Fund (AF), Climate Technology Center and Network (CTCN) and the Loss and Damage Fund (LDF) in order to direct and fund investments related to energy resiliency. 16 17 World Bank Group, Ready to Rebuild: Disaster Rehabilitation and Recovery Planning Guide Workbook, 2022, Washington, D.C., 14. National Renewable Energy Laboratory, Solar-Plus-Storage Analysis, https://www.nrel.gov/solar/market-research-analysis/solar-plus-storageanalysis.html. Vo l u m e 3 32