Renewable energy seen as new driver of PHL investment growth

by Jonathan L. MayugaJune 19, 2016

from Business Mirror

RENEWABLE energy (RE) now presents the biggest opportunity for local investment, as the Philippines plans to veer away from dirty coal through an ongoing energy-policy review, the Climate Change Commission (CCC) said.

Secretary Emmanuel de Guzman, vice chairman of the CCC, said the country has “nothing to lose but all to gain” with the shift to renewable energy by luring investors to put a stake on solar, wind and geothermal energy.

“It is RE, not coal, which constitutes the biggest investment opportunity ever for the Philippines,” de Guzman said in a statement.

According to de Guzman, given the range and potential magnitude of negative effects associated with fossil fuel, scaling up RE is the “best and only alternative” for the country to meet its energy demands and contribution to the global effort of limiting global warming below 1.5 degrees Celsius.

According to the Department of Energy (DOE), there are presently 20 coal-fired power plants operating across the country. At least 12 more are in the pipeline, which are expected to be operational from 2016 to 2020.

These plants are expected to produce 4,592 megawatts, or about 42 percent of the country’s demand.

The CCC said that,  in contrast, the Philippines’s abundant natural supply of energy sources offers a huge potential to meet the power requirements of the country.

RE has the technological potential to contribute more than 40 percent of the country’s installed power capacity by 2020 from geothermal (8.7 percent), hydro (15.7 percent), wind and solar (14.8 percent) and biomass (3.8 percent), based on the updated National Renewable Energy Program.

De Guzman said “investing in RE is practically the same as investing for a less carbon-intensive future.” 

“It is high time for the government to account for the balance-of-payment benefits when we decide to wean off coal and rely more on renewables. Opportunities await the bold. We can also do no less than shield our struggling people from further harm,” he said.

Coal-fired power plants are the biggest sources of man-made carbon emissions, accounting for about 35 percent of global greenhouse-gas (GHG) emissions.

Among the externalities that arise from the burning of coal for power generation are reduction in life expectancy, respiratory hospital admissions, congestive heart failure, and ecosystem loss and degradation.

In 2012 the World Health Organization recorded 3.7 million premature deaths from ambient air pollution and 4.3 million deaths from household air pollution.

According to the International Renewable Energy Agency, an international organization that supports nations in their transition to a sustainable energy future, the external effects of energy supply and use related to climate change and air pollution hover around $2.2 trillion to $5.9 trillion a year. In comparison, the cost of global energy supply is about $5 trillion per year.

De Guzman said this only shows that the negative externalities of coal-fired electricity generation are even higher than the actual price of electricity itself.

“Coal companies have a responsibility to internalize accounting of negative externalities. Government actually must make sure coal companies internalize externality costs, because these are implicit subsidies our people cannot afford and should not pay for,” de Guzman pointed out.

Besides health costs, de Guzman said air pollution directly impacts on the productivity of the labor force in terms of total man-hours, with time lost at home, health facilities or attending for the care of others.

To recall, outgoing President Aquino, who is the concurrent chairman of the CCC, recently signed a resolution allowing the climate-change body to conduct a comprehensive review of the government’s energy policy to pave the way for a swift transition to renewable and sustainable energy.

Under the resolution, the Department of Environment and Natural Resources, the DOE and the National Economic and Development Authority are urged to harmonize policies and regulations on new and existing coal-fired power plants and assess their impacts on the environment, as well as include low-carbon development and climate-change adaptation and mitigation strategies in the formulation of all national and local development plans.

De Guzman said the CCC resolution is an affirmation of the government’s resolve to mainstream low-carbon development pathway in accordance with the country’s commitment under the United Nations Framework Convention on Climate Change (UNFCCC) and its intended nationally determined contribution (INDC).

In October 2015 the Philippines submitted during the Conference of Parties to the UNFCCC its INDC, in which the country pledged to reduce its GHG emissions by 70 percent by 2030, subject to support provided by developed countries.

The reductions will come from the energy, transport, waste, forestry and industry sectors.