By Jay Joel L. Soriano
Renewable energy (RE) is a constantly growing industry in our country, driven to a large extent by the growing adoption and utilization of RE elsewhere in the globe. Demand for countries to shift to RE is at an all-time high. And rightly so, because this is one concrete step countries can take to reduce carbon emissions and to fight climate change.
Unfortunately, realizing a greatly decarbonized world, as they say, is easier said than done. The Philippines, like a good number of other countries, still gets most of its power from coal. Reducing our dependence on coal is deeply challenging but unavoidably expected of us as a country disproportionately suffering from climate change.
An average coal-fired power plant, which is still our country’s main source of energy, emits 0.97 tons of CO2 per MWh, which is equivalent to the emissions of 2,325 miles of driving. In comparison, geothermal only emits a tenth of this or 0.09 tons CO2 per MWh, or only equivalent to 225 miles of driving.
Geothermal energy, as opposed to wind or solar for that matter, is — in our view — the holy grail of RE technologies. It does not depend on the seasons. It does not depend on the time of day. It also does not depend on weather conditions. In other words, properly managed, geothermal can supply clean, uninterrupted power day or night, rain or shine, all year round. And we are blessed to have this energy source in our very own country, a privilege common only to a limited number of countries.
The minimal carbon emission of both wind and geothermal energy and their ability to displace carbon emissions from coal-fired power plants drive a low-carbon economy that is crucial to our country’s fight against climate change.
There remains enormous potential for RE development in our country. We still have a whopping 76,600 MW of potential for wind energy in the Philippines after about two decades of development, and we also have roughly 4,500 MW of potential for geothermal energy even after more than four decades of development. By sheer size alone, there is still much more work ahead of us and still plenty of opportunities to look at RE to displace fossil fuel.
So what have we in the Energy Development Corporation (EDC) been doing as the country’s leading RE company to make our business a part of the country’s solution to climate change? As a start, EDC as a member of the Lopez Group, has committed to remain a purely renewable company and to lead the country to a low carbon future. This commitment was formalized by our chairman, Federico “Piki” R. Lopez, at the 2016 stockholders’ meeting of our mother company, First Philippine Holdings Corporation, as he bravely declared that the Lopez Group will not build nor invest in coal plants.
As Piki stated, “This country already has many alternatives that do not mortgage the future of our children and the future of our planet. These are extraordinary times that call for extraordinary change and everyone must shift to thinking about the quickest route to a decarbonized economy.”
In 2016, EDC generated 8,531.5 GWh that helped our country avoid 7.5 million tons of carbon dioxide. Geothermal still occupies a huge part of our RE portfolio. It is a business and a science that EDC has mastered and sustained in its over 40 years of operation.
Yes, countries and companies have committed to go RE because we need to save our planet. And yes, EDC chooses to produce pure RE for the benefit of our country. But more importantly, as a company, we recognize that meeting the demands of our environment and our nation must not sacrifice the well-being of our individual customers or end-users.
The common perception is that RE is not a cost-effective alternative for meeting energy requirements. The most frequent answer or the most convenient solution is to source from coal by default because it is considered more affordable than RE. There is an argument to be made that this is not comparing apples to apples; that negative externalities have to weigh into the comparison to see the true cost of energy sources. But in its more basic form, we believe that RE can be competitively priced.
We endeavor in EDC to lead the way in making RE more accessible, even more cost competitive to power consumers. We place great emphasis on geothermal in particular because we are mindful of the advantages of a clean and reliable source of baseload power that is uniquely abundant in our country.
First, we do this by continuously supporting our government’s programs in accordance with the Renewable Energy Act by raising awareness on clean energy through various platforms. The Retail Competition and Open Access or RCOA program that is already underway is bound to create enough competitive pressure to reduce the power cost to the consumers as they are given the option to get power from their producer of choice.
Our Bacman Geothermal Business Unit in Bicol is a part of the RCOA program with the approval of its Retail Electricity Supplier (RES) license. Through Bacman’s RES, we are now able to directly contract with contestable customers with demand below 1MW.
Second, apart from our preventive maintenance programs to ensure that our power plants are always in good condition, we have invested time and effort to make our facilities typhoon resistant so that they can withstand strong Yolanda-type typhoons, which have become the “new normal” due to climate change. While the upfront investments may seem huge, we believe that the increased reliability and avoidance of future damage will result in lower operational costs in the long run.
Setting EDC apart from other RE players is our commitment to environmental preservation. Since 1989, we have been implementing BINHI, our comprehensive forest restoration program that not only protects our precious natural resources and mitigates the effects of climate change by serving as carbon sinks, but also provides sustainable livelihood for forest communities.
As of 2017, we have planted 6.3 million seedlings covering 9,196 hectares of denuded land with the help of 117 farmers associations that we have organized in five geothermal sites. This exceeds our target of 9,000 hectares in eight years. This resulted in 1,047,753 tons of carbon dioxide sequestered in 2017. That is on top of the 2.4 million tons of equivalent carbon sequestered in biomass for taking care of our geothermal reservations. All these make EDC a carbon neutral company. Our carbon footprint of 806,117 CO2e from our operations in 2016 is only 30 percent of the carbon absorption of the forests and plantations that we have nurtured.
Our 40-year head start and leadership in RE has taught us that we need to keep evolving as we seek to find ways to be more efficient and to lower the cost of generating clean, renewable, reliable power. It is the only way to provide accessible, cost-competitive RE for all Filipinos to power infinite possibilities, today and tomorrow.
Soriano is the head of the Negros Island Business Unit (NIGBU) of the Energy Development Corporation, the Philippines’ leading renewable energy company and the world’s largest integrated geothermal producer. The article is an excerpt of his speech at the 2nd Philippine Environment Summit held recently in Cebu City, organized by the Department of Environment and Natural Resources and the Green Convergence coalition.
Tags: climate change, Energy Development Corporation, First Philippine Holdings Corporation, Geothermal energy, Guest Column, Lopez Group, main source of energy, renewable energy, Renewable energy for all Filipinos