Renewable energy; CFO of the Year Search

Published June 1, 2021, 6:00 AM by Flor G. Tarriela
https://mb.com.ph/2021/06/01/renewable-energy-cfo-of-the-year-search/

I’m a gardener and my plants just can’t take the extreme heat this summer.Climate change is indeed a reality!

According to Moody’s Investors Services, Philippine banks are most exposed to physical climate risk in the Asia Pacific. It estimated 22% of the Philippine banks overall gross loan portfolio were exposed to credit risks linked to environmental factors. The Philippines faces the highest physical climate risk followed by Bangladesh, Vietnam, India and Indonesia.

“Renewable Energy and Energy Security:Can We Do Both at the Same Time?” was the timely topic at the FINEX meeting sponsored by the Environment Committee chaired by Chito Oreta. Guest speakers were Department of Energy (DOE) Secretary Alfonso Cusi and Energy Development Corp. (EDC) President Richard Tantoco.

January 2020, we experienced Taal eruption, then the fury of super typhoon Rolly followed by Quinta and Ulysses.Globally, we saw the devasting wild fires in Australia and California. Mr. Tantoco said carbon emissions are the equivalent of putting a cover on a kettle. The more carbon is emitted, the hotter the earth gets. This is because 90% of the sun’s heat is absorbed by the oceans and the warmer the oceans, the stronger the weather impact. He said that EDC’s insurance claims have gone up 24 times in the last 10 years due to natural catastrophes.

The Philippines, he said, despite its tiny contribution to world emissions, ranks fourth among 180 countries that have been most affected by extreme weather in the past years, the “new normal.” EDC generates close to 1500 megawatt(MW) of purely renewableeEnergy (RE) in the Philippines.

Fortunately, he said, many institutions are now pushing for an end to coal and an increased take up of renewable energy. International Finance Corporation (IFC) has declared that it will end equity investments in financial institutions that do not have a phase out plan in coal- related activities. ADB disclosed no more coal funding moving forward. 143 significant financial institutions globally have already committed to exit coal as of 2020.Engineering giant Black and Veatch announced that it will end participating in coal-based design and construction, instead focus on clean energy technologies. General Electric, Siemens and Toshiba announced they will no longer build coal fired power plants.

Secretary Cusi reported that in 2019, the Philippines power generation mix was dominated by coal at 54.6%, natural gas 21.1%, renewable energy (hydro, geothermal, wind and solar) 20.8% and oil 3.5%. Can the Philippines transition to RE? Is RE expensive? Is there enough renewable energy to provide stable, reliable, power for Philippines growing economy? Mr.Tantoco said solar and wind are good renewable energy, prices have gone down dramatically but both are intermittent and site specific.While geothermal can address the issue of intermittency and provide reliable power, it is also site-specific and there is not enough to supply the power demand. Thus, he said, as we harness the geo, solar and wind potential, there is a need for a “transition fuel” such as natural gas which emits only 40% carbon compared to coal.

He concludes that RE cannot yet supply 100% of the power demand today. Fortunately, he said the Renewable Energy Law is being implemented as demonstrated by the recent DOE moratorium on new coal power projects. The requirement for electric cooperatives, distribution utilities, retail electricity suppliers to source a portion of their power from RE also help move towards the RE target of 35% by 2030.

The climate crises is real and we need renewable and carbon free energy now. With the government policies in place to transition to clean energy, Mr. Tantoco urged everyone to collaborate for a “decarbonized future” for the Philippines.