‘Sound policies will enable PHL to hit net-zero target’
BY LENIE LECTURA – NOVEMBER 18, 2021
from Business Mirror
Power companies on Thursday urged the government to take the lead in pursuing measures that will allow the Philippines to achieve net zero greenhouse gas emissions by 2050.
During the 2021 Conference of the Electricity Power Supply Industry (CEPSI), officials of AC Energy Corp.(ACEN), Aboitiz Power Corp., Meralco PowerGen (MGen), and First Gen Corp. shared insights on how they are doing their part to achieve a common goal—the net zero carbon goal.
“I think it would be critical for the government to exercise its leadership and craft a net zero commitment. As we know, there are already more than 137 countries and counting who is committed to net zero.
I think it’s just a matter of time that the Philippines, hopefully, will also commit to net zero and again craft specific policies. Hopefully, it will also encourage more corporates in the Philippines to follow suit. It’s difficult to commit. It’s a leap of faith,” said ACEN President Eric Francia.
ACEN earlier said it is working with global climate solutions provider South Pole to develop a detailed greenhouse gas footprint that includes all relevant Scope 3 emissions from the value chain, which is considered “net-zero best practice;” and assess potential emission reduction activities and strategies to help ACEN prioritize and budget for these interventions across its core business units, ensuring practical steps are taken to reduce emissions as quickly as possible.
They will also establish interim targets aligned with a science-based 1.5°C pathway across the core business units.
ACEN vowed to transition its generation portfolio to 100 percent renewable energy by 2025. It will also use the Energy Transition Mechanism (ETM) for the early retirement of its remaining coal plant, South Luzon Thermal Energy Corp. (SLTEC) by 2040, 15 years ahead of its technical life.
The ETM is an innovative funding mechanism that leverages low-cost and long-term funding geared towards early coal retirement and reinvestment of proceeds to enable renewable energy.
AboitizPower President Emmanuel Rubio, meanwhile, said “government taking the lead is a good start and a good way to kickstart this tedious process.” “I think government should take the lead and I think with the initial commitment—75 percent in carbon emissions subject to the funds being available. But a firm roadmap, firm policies when they’re in place, I guess then if you really would have to be guided by those,” said Rubio.
AboiitzPower, he said, also had discussions with Asian Development Bank and other financial institutions on ETM. “There are still some disconnects, I still won’t go into the details. Most of our coal plants actually can also be shut down by 2045 or before 2050 because of its useful life that’s in our current focus. But then in the current process, it’s the valuation as far as the ETM is concerned and we’re looking at probably 15 years.
Between 15 and 20 to 25 years, there is a lot of value gap that you need to make up for. This is something that we have to work on with the financial institutions and maybe with government support to subsidize some of these initiatives. It’s something that the government should explore,” Rubio said.
The first milestone in its net zero vision is the declaration to have a 50:50 balance between renewables and thermal by 2030.
MGen President Jaime Azurin, for his part, awaits government’s next step after declaring a moratorium on new coal power projects in the country. He said there has to be a “timely” shutdown of these plants.
“I know there’s a moratorium on coal, but what comes next? If government would have placed a gas storage facility wherein you can draw, then you could have a lot of gas plants. The problem with gas is you need to build big to be able to get the supply. We need a gas storage facility in the Philippines. [Francis Giles Puno] and his group are basically doing the investing not knowing what the future holds.”
First Gen is currently constructing its Interim Offshore LNG Terminal project. Company president Francis Giles Puno said LNG plays a “crucial role” in accelerating the phase-out of coal-fired power plants and in fighting adverse climate change. But this process will require close collaboration with the government and other industry stakeholders to assure the country’s smooth clean energy transition and avoid energy market volatility.
