PH advances energy sustainability for greener future
THE Philippines is actively addressing environmental concerns associated with energy production and consumption while enhancing economic opportunities and climate change resilience.
The nation is forging ahead on a path toward energy sustainability through governmental policies, private sector initiatives and strategic partnerships.
The Department of Energy (DoE) has signed Wind Energy Service Contracts with Mainstream Renewable Power (Mainstream) to develop two onshore wind projects in Luzon and the Visayas with a combined capacity of 440 megawatts. These projects in Cagayan Province and Leyte signify Mainstream’s pioneering entry into onshore wind development in the Philippines.
Mainstream is a leading pure-play renewable energy company with wind and solar assets across global markets, including Latin America, Africa and the Asia-Pacific.
Eduardo Karlin, Mainstream general manager for Asia-Pacific, emphasizes the significance of these contracts, highlighting their role in advancing the country’s energy transition goals.
“The awards of these contracts represent an important milestone for Mainstream as we continue to grow our development footprint across the Philippines. We are committed to the Philippine market and well-placed to be part of the country’s energy transition and assist the government in reaching their targets of 35 percent renewable energy by 2030 and 50 percent by 2050,” Karlin says.
The signing of the contract has been witnessed by DoE Secretary Raphael Lotilla and Norwegian Ambassador to the Philippines Christian Lyster. The signing of these onshore wind contracts further accelerates the implementation of the thrust of the Marcos administration to develop indigenous and renewable sources of energy, following the lifting of foreign ownership restrictions.
Energy efficiency and conservation
The Government Energy Management Program (GEMP), supported by Administrative Order (AO) 15, seeks to intensify energy conservation efforts within governmental entities. Lotilla emphasizes the importance of these measures, particularly
in mitigating energy demand amid challenges such as El Niño.
The accelerated implementation of GEMP has yielded substantial savings; both in terms of electricity and fuel consumption. With over 1,210 audited government offices participating, the program has achieved significant cost savings while advancing energy sustainability goals, outlined in the Philippine Energy Plan 2020 to 2040.
“The President wants the entire government to embrace energy conservation measures. AO 15 will intensify our efficient utilization and conservation efforts in the use of electricity, and fuel to help mitigate energy demand, especially with the onset of El Niño,” Lotilla says.
It advocates a shift to a sustainable energy lifestyle with the government setting a strong example.
In parallel, private sector entities such as the Manila Electric Co. (Meralco), Bank of the Philippine Islands (BPI) and Shell are spearheading sustainability initiatives, aimed at promoting renewable energy adoption and resilience across various sectors.
Meralco’s ambitious sustainability agenda, “Powering the Good Life,” outlines targets for clean energy sourcing, electrification of its vehicle fleet, and gender diversity promotion within its workforce.
Meralco’s commitment to sustainability extends to partnerships with companies such as Spectrum, facilitating solar panel projects and the energization of communities through solar-powered microgrids.
Similarly, MGen Renewable Energy, aims to bolster its green energy portfolio with initiatives such as the construction of a solar farm in Bulacan. These endeavors underscore Meralco’s commitment to becoming a significant player in the renewable energy sector while advancing sustainability objectives.
Meralco President and Chief Executive Officer (CEO) Ray Espinosa says, “We, in Meralco, will continue to advance our drive [toward] sustainability not only by intensifying our efforts to keep the lights on for our customers and communities, but also by heightening our initiatives to protect and preserve the planet.”
“As we forge ahead, we are committed to accelerating our sustainability transformation while meeting the needs of our recovering nation. We, likewise, set our vision [toward] co-creating a society with all the hallmarks of enduring and meaningful progress as we provide and power more life to sustain the Filipinos,” Espinosa says.
Sustainable investments and partnerships
BPI is solidifying its position as the leading Philippine bank, supporting renewable energy expansion and environmental, social and corporate governance (ESG) principles in the country.
BPI Securities President and CEO Haj Narvaez emphasizes, “BPI invests in the future. We aim to promote sustainability and resilience across various sectors. This aligns with BPI’s support for the country’s transition [toward] the use of more sustainable energy resources in line with the goals of the Paris Climate Agreement.”
Through partnership with ACEN, a prominent renewable energy company in the Philippines, BPI seeks to expedite investments in renewable energy and ESG initiatives. BPI’s Sustainable Development Finance program complements the country’s shift toward sustainable energy resources by backing projects such as renewable energy development and green building initiatives.
ACEN’s recent sustainability-linked loan facility with BPI and the Asian Development Bank (ADB) showcases the collaboration between financial institutions and renewable energy developers to promote sustainability. These initiatives bolster the Philippines’ overarching goals of energy sustainability and environmental stewardship by fostering partnerships and facilitating investments.
ACEN is striving to become the largest listed renewables platform in Southeast Asia with a target of reaching 20 gigawatts (GW) of renewables capacity by 2030.
Jonathan Back, ACEN Group chief finance and strategy officer, says, “ACEN is committed to transition the company’s generation portfolio to 100-percent renewable energy by 2025 and to become a net zero greenhouse gas emissions company by 2050.”
“We have approximately 4.7 GW of attributable capacity across our major markets: the Philippines, Australia, Vietnam, Indonesia and India with a renewable share of 99 percent, [which is] among the highest in the region,” Back says.
Net zero emission
Shell’s commitment to becoming a net-zero emissions energy business by 2050 underscores the significance of private sector engagement in the energy transition.
Through investments in low-carbon energy solutions and advocacy for policies supporting national net-zero ambitions, Shell is positioning itself as a leader in the global energy transition.
Shell will continue to transparently report its progress against its targets and ambitions every year. Between 2023 and the end of 2025, Shell plans to invest $10 billion to $15 billion in low-carbon energy solutions, making it a significant investor in the energy transition. These investments encompass electric vehicle charging, biofuels, renewable power, hydrogen, and carbon capture and storage.
Shell aims to scale new technologies to make them an affordable choice for customers and focuses its advocacy on key areas critical to the energy transition: policies supporting national net-zero ambitions, supplying secure energy, driving changes in demand and growing low-carbon solutions.
To prioritize value over volume in power, Shell will concentrate on select markets and segments, including selling more power to commercial customers and less to retail customers. This shift toward prioritizing value has led to an update in Shell’s net carbon intensity target, aiming for a 15-percent to 20-percent reduction by 2030 in the net carbon intensity of the energy products Shell sells, compared with 2016 against the previous target of 20 percent.
Shell CEO Wael Sawan says, “Energy has made an incredible contribution to human development, allowing many people around the world to live more prosperous lives. Today, the world must meet the growing demand for energy while tackling the urgent challenge of climate change. I am encouraged by the rapid progress in the energy transition in recent years in many countries and technologies, which reinforces my deep conviction in the direction of our strategy.”
“Shell has a very important role to play in providing the energy the world needs today and in helping to build the low-carbon energy system of the future. Our focus on performance, discipline and simplification is driving clear choices about where we can have the greatest impact through the energy transition and create the most value for our investors and customers. We believe this focus makes it more — not less — likely that we will achieve our climate targets. By providing the different kinds of energy the world needs, we believe we are the investment case and the partner of choice through the energy transition,” Sawan says.
Meanwhile, Mactan-Cebu International Airport (MCIA), operated by Aboitiz Infracapital GMCAC, has achieved Level 1 Airport Carbon Accreditation from Airports Council International (ACI), marking a significant milestone in the Philippines’ commitment to environmental sustainability.
The airport aligns with the United Nations’ Sustainable Development Goals and global targets, aiming to preserve resources for future generations through sustainable projects. This recognition not only highlights MactanCebu’s responsible approach to carbon emissions, but also positions it as a frontrunner in promoting eco-friendly practices within the aviation sector.
Airport Carbon Accreditation, a globally endorsed certification program for carbon management in airports, evaluates and recognizes airports’ efforts in managing and reducing carbon emissions.
Stefano Baronci, director general for Asia-Pacific and the Middle East at ACI, commended MCIA for its dedication to sustainability, emphasizing the importance of achieving Level 1 certification in the Airport Carbon Accreditation program.
Julius Neri, CEO at MCIA, emphasized the airport’s commitment to sustainability, aiming to set a precedent for the Philippine aviation industry. The airport is implementing innovations to enhance sustainability such as reducing nonbiodegradable waste, implementing energy-saving infrastructure projects, integrating renewable energy sources and minimizing water consumption.
Neri believes the airport’s recent achievement will inspire the Philippines’ aviation industry to adopt sustainable practices, highlighting the potential for a net-zero outcome due to technological advancements. He emphasizes the need for a collective positive impact on the planet and the airport’s sustainability journey toward higher accreditation levels.
PEP 2020 to 2040
Under the Philippine Energy Plan 2020 to 2040, the conduct of the Philippine Conventional Energy Contracting Program (PCECP) makes the oil and gas sector a dynamic investment opportunity for energy players in the country.
PCECP aims to award eight service contracts (SCs) with a minimum investment of P8.4 billion once players complete the required exploration stage.
Approval for Nominated Area 1 and Predetermined Areas 6 and 7, located in the Bangsamoro Autonomous Region in Muslim Mindanao areas, could generate a potential investment of P1.7 billion. The sustainable implementation of the PCECP could attract additional investments of P492.4 billion, divided between oil production (P94.4 billion) and natural gas production (P398 billion). This total investment of P502.5 billion aims to support the government’s “bring back better” initiatives.
Approved service contracts can employ around 300 personnel, creating over 2,000 job opportunities for technical and support services to meet the manpower requirements of eight SCs.
Renewable energy not only reduces greenhouse gas emissions and improves air quality, but also creates economic opportunities for local industries and communities by creating jobs in manufacturing, installation and maintenance sectors. The government has implemented programs and incentives to encourage investment in renewable energy projects.
Renewable energy for a healthier future
The World Health Organization states that 99 percent of people worldwide breathe air that exceeds air quality limits, causing over 13 million deaths annually due to environmental causes such as air pollution. Fossil fuel burning contributes to unhealthy levels of fine particulate matter and nitrogen dioxide, causing $2.9 trillion in health and economic costs in 2018.
According to the United Nations, fossil fuels — including coal, oil and gas — are the largest contributors to global climate change, accounting for over 75 percent of greenhouse gas emissions and 90 percent of all carbon dioxide emissions. To mitigate the worst impacts, emissions need to be reduced by almost half by 2030 and reach net zero by 2050 with the science indicating a need for urgent action.
Renewable energy is currently the most affordable power option globally with prices rapidly decreasing. Between 2010 and 2020, solar power costs have fallen by 85 percent while onshore and offshore wind energy costs have fallen by 56 percent and 48 percent, respectively. This makes renewable energy more attractive globally, especially in low- and middle-income countries from where the majority of new electricity demand will come. This presents an opportunity for low-carbon sources to provide much of the new power supply in the future.
Switching to clean energy sources such as wind and solar can help address climate change, air pollution and health. Fossil fuels still dominate over 80 percent of global energy production, but renewable sources are gaining ground, accounting for 29 percent of electricity currently.
UN Secretary-General Antonio Guterres says, “It’s time to stop burning our planet and start investing in the abundant renewable energy all around us.”