Keynote Speech: Looking Beyond 2016: The Future of Philippine Energy

Keynote Speech of Senator Loren Legarda

Looking Beyond 2016: The Future of Philippine Energy

PowerTrends 2015 Business Forum

September 23, 2015| SMX Convention Center

I am very honored to be here today at the PowerTrends Business Forum and I salute Leverage International and Puno & Puno for this laudable venture.

I was among the co-authors of the Renewable Energy Law in 2008. Our laws are hailed as among the best in the world, but without strict and effective implementation they are of very little use. At the time, people considered that renewable energy sources like wind and solar would only become a small share of the energy mix. Since then, we have seen installations increase, with hundreds of megawatts of solar and wind in excess of even the Department of Energy’s targets back then. But we are still far away from tapping and maximizing RE’s potential.

Why do places with no renewable energy resources have more RE than us? Germany is known as the solar capital of the world, but only receives half the sunlight of the Philippines. In Europe, they are scaling down on coal, while the Philippines has approved 21 new Environmental Compliance Certificates (ECC) for coal.

The problem is that people say RE is expensive and coal is cheap.

First, this does not take into account the true cost of coal. Coal increases the risk of climate change and threatens our natural resources. As an environmentalist, I previously often encountered people skeptical of climate change. But recent events like Typhoons Yolanda, Ondoy, Pablo have confirmed Intergovernmental Panel on Climate Change’s (IPCC) findings that climate change is unequivocally caused by humans, and disproportionately affects vulnerable nations like the Philippines.

Second, there are parts in this country where RE is indeed cheaper than coal. In rural, “off-grid” areas, electricity must be sourced from expensive diesel fuel. Instead of subsidizing diesel like we are in remote islands, we should abandon all these gensets and turn to solar, hydro or wind power. Meanwhile, for installing solar panels on homes that experience the highest electricity rates, Net Metering is not yet viable because it costs P20,000 and several months just for Meralco to let you sell them back power at P5 per kWh while you buy it back from them at P12 per kWh. We should streamline these processes to facilitate, and not obstruct, RE adoption.

Third, the government must do more to support RE. When people say RE is expensive, it’s in large part because it takes so many permits and many years to develop a project in the Philippines. Many of these are unnecessary, and sometimes are subject to discretion and abuse of public officials. If we cut this red tape at the local and national level, it will decrease the cost and risks of development, it will allow more local and foreign companies to compete, and reduce costs for all consumers.

Meanwhile, many other facets of the RE Law go unimplemented.

After 7 years of the laws passing, and many years of the rules being drafted, we still have not implemented the Renewable Portfolio Standards and the Renewable Energy Market, which would mandate a certain portion of the country’s energy supply to come from RE sources.

And to bring down the cost of power in general, we should subject all power contracts to the Competitive Selection Process, for which I laud former Secretary Jericho Petilla for issuing in his final DOE circular. Instead of allowing Distribution Utilities to sign contracts with their Power Generating subsidiaries at disadvantageous rates to the consumer, if we subject all this to competitive bidding, we will find the overall costs of power in this country to go down.

We are a country rich in renewable energy, the amount of sun and wind is more than enough to power our entire country many times over, and we must take greater steps to harness these abundant natural resources to ensure a sustainable future.

A study by the Philippine Institute for Development Studies (PIDS) reports that one out of five people or 130 million in ASEAN lack access to electricity.  The same study said that 16 million Filipinos still have no access to electricity.

This is a market that can very well benefit from renewable energy development in the region.

There are two compelling reasons for accelerating the development and utilization of renewable energy in the country – energy self-sufficiency and environmental sustainability. Renewable energy is recognized as a long-term solution to the global effort to avert climate change. It could help mitigate the environmental impacts of our expanding energy use.

We must go for clean energy now and veer away from fossil fuels, especially coal.

Key findings of the 5th IPCC 2012 Special Report on Extreme Events revealed that climate change is “unequivocal” and that there is 95 percent likelihood that human activity is the cause of global warming.^[1]

Human activity released 545 gigatons of carbon dioxide—the main greenhouse gas from 1750 to 2011. It is projected that if 1,000 gigatons of carbon dioxide is emitted, which at current rates will likely occur between 2040 and 2050, there is a one-in-three possibility that the 2 degrees Celsius limit above the pre-industrial level will be exceeded.

Of the carbon dioxide emitted, 2/3 was due to the burning of fossil fuels with 1/3 caused by deforestation and land-use change. In the last decade however, 90 percent of rise in carbon dioxide levels was due to burning of fossil fuels.

Climate change is no longer a scientific issue. It has become the greatest humanitarian challenge of our time as it threatens our basic human rights—food, health, potable water, decent shelter, and even life itself.

The stronger and more frequent extreme weather events we are experiencing now are among the impacts of climate change.

The Philippines, a minor emitter of greenhouse gas, is unfortunately among the nations most vulnerable to climate change.

The energy sector should be at the forefront of climate change mitigation through the promotion of clean energy. Moreover, we must ensure the resilience of energy-related infrastructure. Electricity is very important in the aftermath of disasters. Measures for improved management and development of our energy generation, transmission and distribution linkages must be put in place.

Our goal should not only be to address energy poverty but more importantly, to ensure resilience and sustainability. We need to provide energy that will serve our needs today without compromising the ability of future generations to meet their own needs. This is our inter-generational responsibility.

This very week, leaders and representatives of different nations converge in New York at the United Nations headquarters to adopt the new post-2015 development agenda.

The global goals for sustainable development or the SDGs include affordable and clean energy, sustainable cities and communities, responsible consumption and production, and climate action, among others.

In December in Paris, we need to adopt an ambitious and legally-binding agreement to mitigate climate change, primarily through deep cuts in greenhouse gas emissions.

The energy sector has a crucial role to play here. My challenge to all of you today, both government and the private sector, is to put climate action and the sustainable development goals at the core of your mission and at the heart of your respective organizations’ programs and development agenda.

This convention is indeed an opportunity to involve ourselves in the continued sharing of information and experiences that facilitate the development of our respective capacities and potentials.  Towards this end, we can show solidarity, share scientific knowledge, and work within the framework of mutually beneficial partnerships.

Together, let us tread the path that will lead our nation towards a brighter, livable, resilient and sustainable future.

Thank you.