Energy Policy Series Webinar Tackles Optimal Energy Mix

In Photo: (Top Row from Left to Right) Dr. Rogelio Golez, Jr., Assistant Professor at Xavier University – Ateneo de Cagayan; Mr. Adrian Glova, Ateneo Policy Center Research Assistant; Ms. Joyce Lagac, ASEP-CELLs Research Associate; (Bottom Row from Left to Right) Dr. Romeo Balanquit, Assistant Professor at the University of Asia and the Pacific; Dr. Josef Yap, ASEP-CELLs Senior Technical Advisor; Mr. Mark Manantan, Luzon CELL - Research and Communications Coordinator
 
The Ateneo School of Government (ASOG), through the Access to Sustainable Energy Programme-Clean Energy Living Laboratories (ASEP CELLs), and with funding support from the European Union, held the second installment of its Energy Policy Series last 30 September 2020. More than 100 participants from the academe, government, civil society organizations, and the private sector tuned in to the virtual webinar held via Zoom.
The Energy Policy Series serves as a platform for discourse among stakeholders in the energy sector. The said series features research on key areas like energy efficiency, energy access and renewable energy to inform policymaking in the energy sector and contribute to the body of knowledge in energy policy.

In the webinar, Ms. Joyce Lagac, ASEP-CELLs Research Associate, and Dr. Josef Yap, ASEP-CELLs Senior Technical Advisor, presented their working paper entitled “Managing the Energy Trilemma Using Optimal Portfolio Theory”. Joining them in the panel were Dr. Romeo Balanquit, Assistant Professor at the University of Asia and the Pacific, who served as the reactor, and Dr. Rogelio Golez, Jr., Assistant Professor at the Xavier University - Ateneo de Cagayan, who moderated the open forum.

As the title suggests, the paper prescribes optimal shares of different generation technologies (e.g. coal, hydro, geothermal, solar, wind etc.) based on the standard parameters of optimal portfolio theory, namely expected rate of return and risk. More so, the standard model was extended to three dimensions to take into account carbon emissions, representing the environmental sustainability criterion of the energy trilemma. Having defined a welfare function on these three parameters, Ms. Lagac and Dr. Yap proposed a methodology to identify a point in the optimal frontier reflecting the preferences of a hypothetical energy policymaker.

For his comments, Dr. Balanquit emphasized the importance of adding a sustainability criterion in selecting an energy generation portfolio. Without the third criterion, market players will myopically focus on minimizing prices, disregarding environmental protection and long-term sustainability. He added that arriving at the preferences of weights of a hypothetical energy planner with respect to the three parameters is an aspect that could be explored for future research.

The open forum, moderated by Dr. Golez, touched on a variety of inquiries raised by the virtual attendees. The panelists fielded questions ranging from applications of optimal portfolio theory in energy policymaking to technical questions on the research methodology of the working paper. All told, the open forum stimulated discussions about optimal portfolios in energy planning.

The working paper can be accessed through the Ateneo School of Government (ASOG) website via this link: https://www.ateneo.edu/aps/asog/research_and_publications/research_materials/working_paper_series. A recording of the event is also available in the ASOG Facebook page: https://www.facebook.com/ateneosog/videos/823782841691091/