Keynote Speech: Realignment of the Power Industry Towards Renewables

Keynote Speech of Senator Loren Legarda
“Realignment of the Power Industry Towards Renewables”
Power & Electricity World Philippines 2016
18 May 2016 | SMX Convention Center

Allow me to open my speech with a question:  What kind of future are we leaving behind for our children?

Our extractive and consumptive lifestyle, and misplaced notion of development have brought our world in a state of utter disrepair. We have been so focused on development without realizing that development without conscience destroys the world.

It is reported that 2015 registered the hottest summers in the Northern Hemisphere ever since recording began in 1880.  The highest temperature for Metro Manila last year was 39.4 degrees Celsius. In April this year, Manila’s hottest temperature peaked at 37.7 degreesCelsius.

The global temperature is getting hotter every year—2015 is the hottest year ever recorded, before that, 2014 was the hottest year on record. PAGASA made a bold prediction that this year can be a candidate for the warmest or one of the warmest years with daily maximum temperature of 40 degrees Celsius in Tuguegarao or the Cagayan area.

El Niño is said to be weaking. La Niña, however, is believed to be not too far behind.

Scientists have blamed human activity, particularly increased carbon dioxide emissions, as the major cause of anomalies in our weather system.

According to the Intergovernmental Panel on Climate Change or IPCC, human activity released 545 gigatons of carbon dioxide 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.

In the last decade, 90 percent of rise in carbon dioxide levels was due to burning of fossil fuels.

As one of the countries most vulnerable to climate change impacts, the Philippines needs to lead in global advocacy efforts for the massive reduction of greenhouse gas (GHG) emissions.  By leading, we cannot demand action from others while we continue to aimlessly approve the construction of coal-fired power plants.  Nothing builds and sustains credibility like an advocate who leads by practice.

It has been said many times that as a developing nation, we need energy to build the foundations of our growth. I subscribe to a healthy energy mix, but not on the misguided axiom that our country should develop and acquire the energy and power it needs at all costs, regardless of whether it sustains or kills life.

Today’s issue is not just about security of energy supply. It is not just about reliability or affordability. It is about increasing clean energy supply, and using it wisely and efficiently.  Energy security that assails the safety of our people and the environment can never guarantee inclusive development.

Let us take a look at how other countries are doing.

The US has already cancelled all coal operating contracts as it has been developing solar, wind and natural gas as its main energy sources; last year, renewables accounted for almost two-thirds (63.85 percent) of their new electrical generation. China is halting the approval of new coal mines for at least three years as of January 2016.[1]

In Europe, they are scaling down on coal. Germany is a solar superpower, but only receives half the intensity of the sunlight we enjoy in the Philippines.

There are countries that have the capacity to source 100% of their power requirements from RE. On windy days, Denmark can produce as much as 140% of its requirements. Iceland, through its geothermal energy, can source up to 100% of its power requirements from RE.

Other countries have also invested in renewables on business or residential premises. More than a million residential properties in Australia now have solar systems installed.[2] Pay-as-you-go schemes are used to provide solar power to off-grid communities in developing countries like Bangladesh and Tanzania.

Grameen Shakti, founded by Dr. Muhammad Yunus, installed solar home systems in a million homes in Bangladesh in 2012.[3] This only proves that renewable energy technologies can be promoted in rural areas in developing nations.

If global projections point to a decline in the share of coal in power generation, and countries are shifting to 100% renewables, why is the Philippines taking the opposite track?

The explanation given is anchored on simplistic assumptions—coal-fired power plants are the country’s dominant power technology because economically, they are widely available and easy to build.

People say renewable energy is expensive and coal is cheap.

First, this does not take into account the true cost of coal. We need to factor in the externalities of coal-generated power. Coal affects our health, kills biodiversity and the environment, affects our waters, pollutes the air we breathe, and increases the risk of climate change.

Second, RE is cheaper than some conventional fuels. In rural, off-grid areas, electricity must be sourced from expensive diesel fuel. Instead of subsidizing diesel for gensets in remote islands, we should turn to solar, hydro, biomass, geothermal or wind power.

Third, the cost of renewable energy is inflated by the cost of doing business in our country.  Project developers are faced with a long list of bureaucratic requirements. While some are necessary, many are products of subjective whims of public officials. This has to change.

Not all is lost.  I applaud the streamlining of the RE service contract application process by the Department of Energy — from two (2) years to forty-five (45) days.

I acknowledge the fact that we cannot totally get rid of coal today. Since we have not developed enough baseload renewable energy, we need to see coal as a transition energy source. But we seek the development of more renewable energy capacities so that in time, we can achieve greater self-sufficiency, sustainability and security in the energy sector.

Our country is rich in renewable energy.  Estimates from past studies by the US National Renewable Energy Laboratory indicate that the Philippines has 246,000 megawatts of untapped renewable energy capacity. This is thirteen times more than our current installed capacity.  Failure to develop these capacities would be unforgivable.

Renewable energy currently accounts for 33% of the country’s energy mix. I can say we have reached considerable progress; but we cannot stop just yet. We should have a good energy mix where there is a bias for renewables.

We have a Renewable Energy Law that provides for the full development and use of RE in the country. It is said that we have one of the best RE laws in the world, and we adopted it long before other countries adopted their own.

The RE law provides the necessary policy mechanisms such as the Feed-in Tariff, Net Metering, Renewable Portfolio Standards, Green Energy Option, Renewable Energy Market, and other fiscal incentives such as income tax holiday.

The National Renewable Energy Program has set out aggressive targets on renewable energy development from 2011-2030, aiming to increase RE capacity to 15,304 megawatts by the year 2030.

There have been challenges, however, in our efforts to fast track the development of our renewable energy resources more aggressively. Impacts on electricity pricing have been a major consideration among our regulators, particularly as we already have one of the highest electricity rates in the world.

We import much of the oil and coal we use, thus making us vulnerable to price fluctuations. Renewables are indigenous resources and we are responsible for setting its price. In essence, we have greater control over the pricing of RE thereby mitigating pricing risks. The development of the country’s RE resources is supposed to be our long-term response to our huge oil import bill.

Prices of RE technologies have significantly gone down since 2008. The price of solar panels, for example, has gone down by at least 80% since 2008. What we need now to address intermittency is to have cheaper energy storage and there are companies that are already rapidly decreasing battery costs.

There are two compelling reasons for accelerating the development and utilization of renewable energy in the country—energy self-sufficiency and environmental sustainability.

Growth is difficult to imagine without energy; and energy that does not take into consideration the needs of future generations can only destroy and not build. Development, progress, and quality of life cannot be the exclusive domain of a few.

Quality of life comes with a price tag—not necessarily beyond our reach. Building liveable cities and communities requires good planning. More importantly, it requires a genuine commitment to the ultimate goal of putting the Earth’s and our people’s survival foremost over all other concerns.

Last April 22, the Philippines and 174 other nations signed the Paris Agreement on Climate Change which aims to limit global temperature rise within the century “well below 2 degrees Celsius and to drive efforts to limit the temperature increase even further to 1.5 degrees Celsius above pre-industrial levels.”[4]

The Philippines has committed to reduce GHG emissions by 70% by year 2030 from the business as usual scenario from energy, transport, waste, industry and forestry. We may not be a major emitter of carbon dioxide, but that does not mean we have no obligation to promote environmental sustainability. We need to deliver on our commitment.We can only meet this if there is radical shift in the way our country develops our indigenous clean energy resources.

The Philippines likewise committed to achieve the objectives of the Sendai Framework for Disaster Risk Reduction and the Sustainable Development Goals.

The energy sector has a crucial role to play in achieving these goals. But whatever sector or industry we belong to, we are all obliged to be stewards of the Earth and its resources.

The world is not just about us. The future is not twenty years from now.  It begins today, dedicated to those who will be born beyond our time.  It is clear injustice to let future generations suffer the irreversible consequences of our irresponsible actions.

The climate crisis presents the opportunity to promote green growth for the sake of humanity and the only planet we call home.

We should act to protect the Earth not just with a sense of urgency, rather with a sense of great emergency.

Thank you.***

[1] Former US VP Al Gore’s Presentation at the Climate Reality Training in Manila, March 2016

[2] Ibid.

[3] Grameen Shakti Makes a World Record in Non-Grid Power Generation http://www.gshakti.org/

[4] The Paris Agreement, Conference of Parties 21. Article 22.1 (a).