Wednesday, September 19, 2018
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A call for energy revolution

Our country is at the cusp of a revolution that is sweeping the world today, with many powerful vectors converging to transform the energy industry. If we are able to ride the wave, we have a golden opportunity to build a power industry that is truly for the 21st century—one that does not only address inclusive economic development but also adopts exponential technological advances and mitigates climate change.

Serving as a backdrop is the undeniable environmental changes we are experiencing. Citing the National Oceanic and Atmospheric Administration’s (Noaa) monthly global climate report, CNN reported that for 400 consecutive months or more than 33 years, the Earth’s temperature had risen to above average.

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While natural factors can account for some of those anomalies, Noaa scientists say the overall pattern can be attributed to anthropogenic or human factors.

What we need to understand is that the Philippines is at the center of this issue. Based on the Global Climate Risk Index, the Philippines is the number one country in the world most affected by climate-related disasters over the last 20 years. This is not surprising given that over 50 percent of municipalities and almost all major cities are coastal in nature, and that 62 percent of Filipinos live in these areas.

Even more disturbing is how climate change primarily affects children. According to a paper published in the medical journal Pediatrics, children will bear 88 percent of the burden of diseases related to climate change. Extreme heat waves have caused emerging infectious pathogens such as the Zika virus and increased incidence of waterborne bacterial infections. Extreme weather events are also damaging crops, impacting the food supply and thus childhood nutrition.

Given the adverse impact on the youth, it is no surprise that calls for cleaner sources of energy come from millennials. Rooted from the demands of their customers, companies like Google, Facebook, Apple, AT&T, Walmart and Unilever Philippines have started to adopt renewable energy sources.

Indeed, global energy revolution is underway.

Yet, the Philippines continues to track a different route. Coal plants continue to dominate. Coal accounts for 50 percent of our country’s power generation, feeding 21 existing plants and 27 more in the coming years. Conscious decisions need to be made to start moving away from coal.

We at the Energy Development Corporation (EDC) have already made a categorical announcement that our group of companies under our parent firm First Philippine Holdings Corporation would not invest, build, develop any coal-fired power plants.

Thus far, we are the only large energy company in the Philippines to declare unconditionally that we would not do coal-fired power.

It wasn’t always that way; we were actively bidding for power plants, which included coal, during the government’s privatization program. Being among the three largest power companies in the country, we definitely had the organizational capability and resources to develop coal-fired plants.

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Operating in a deregulated power market in the Philippines means staying competitive and having the cheapest generation sources in order to keep winning customers. Coal, given its abundance in the world, was traditionally among the cheapest fuels.

That stance changed immensely in November 2013, when our largest geothermal plant in Leyte, Southern Philippines was directly hit by one of the most powerful typhoons in history.

Witnessing the enormous suffering of communities around us, we knew it can no longer be “business as usual.”

However, we still face quite a number of challenges. Price competition is intense and retail competition and open access is underway. Low price is still the main driver of electricity consumers, thus affecting profit margins of all power producers. But we’re driving down costs in our geothermal business, both the old-fashioned way and through the use of new technology.

Another challenge is the government’s ambivalence on climate change issues. Because there’s so much political pressure to provide everything at the lowest possible cost, employing historically more expensive sustainable methods of production has never been encouraged.

You might wonder what keeps us committed to the green road despite all the obstacles? There are more and more companies that are conscious about greening their footprints and supply chains.

Another reason for the optimism is that the forces of technology are moving very fast. Solar, wind and battery storage have experienced exponential cost reductions over the last few years. In recent years, prices of coal and other fossil fuels have also gone up, debunking the government’s earlier argument.

When someone tells you that renewable energy is intermittent and makes power grids unstable, know that there are many technically and economically feasible ways to handle these issues, and progressive grids are already incorporating them into their day-to-day operations.

The world is now moving toward cleaner energy, including China and Europe. It’s time for the Philippines to join the bandwagon.

The Green Energy Option that was improved under the Renewable Energy Law 10 years ago should be implemented soon. Incentives must be implemented to encourage the use of geothermal power. Consumers should be given a choice—full retail open access should be allowed.

Filipinos are some of the most innovative people on Earth. We should lead the country and the region toward a future of clean energy.

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TAGS: energy industry, energy revolution, National Oceanic and Atmospheric Administration’s (Noaa)
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