CAREER EXPO 2018

College of Economics and Management Career Expo Fair 2018
University of the Philippines Los Baños (UPLB)
June 1, 2018

This morning I woke up to the realization that 2 months ago I turned a new leaf in my life: I became a senior citizen. And nothing would have been more profound as a reminder than the fact that you see me in a T Shirt and jeans instead of the suit I was planning to wear to this morning’s affair.

You see, as I was dressing up to come here, I absentmindedly locked the dressing room of my bedroom. At that very moment my wife, who keeps the key, was 30,000 feet in the air on her way to Davao. So rather than come here naked, I decided to wear what was available outside the dressing room.

This is what I wear everyday: T-shirt with jeans, loafers, and no socks. Throughout most of my professional life I wore nothing but suits and barongs. So when I retired in 1998 from being a professional employee to become an entrepreneur, I decide to just live a simple life with simple clothes.

However, I advise you not to follow my example in your first job interview.

My advise: wear comfortable, inexpensive but decent clothes, and most importantly, wear your passion in your face and in your voice.

Passion? Yes, passion.

Passion is what drives you everyday. Passion is why you do what you do everyday.

Maybe it is serendipity that I locked myself out this morning and I was forced to wear this shirt: the UP Vanguard shirt. When I was a student here in UPLB, I pursued advanced ROTC. So for four years while I was pursuing my Agribusiness degree I was also undergoing military training. This training built me into what I am today and I have since embraced the shibboleth of the UP Vanguard: Duty well performed, Honor untarnished and Country above self.

Country above self: this has been my passion, this has been why I go to work everyday.

Before you embark a career whether it is finance, marketing, or whatever, you should know your “why” – what makes you want to wake up every morning and do something useful with your life. Professionally, this is the only way to become happy with your career, with your professional life.

I started as an financial analyst in Davao City for a financing company. Davao at that time was a war zone but that was probably the reason why I was attracted to that city. As a financial analyst I had to do financial projections on yellow columnar sheets using pencils and calculators. No excel spreadsheets – if after working for 5 hours you find that your balance sheet is not balanced, you would have to redo your entire worksheet, by hand. Today you have Excel spreadsheets with all sorts of sophisticated formula in cells; I am sure you find the “Goal seek” function very useful.

My advise: do not jump into your spreadsheets blindly. Learn first the fundamentals – the link between the P&L, the cash flow, and balance sheet. Learn to differentiate between accounting and finance issues.

As I told you, Davao was then a war zone. And all managers from Manila assigned to Davao inevitably resigned because of the peace and order problem. A grenade exploded right in front of our office that blasted the glass walls of our office. We saw people shot in front of us and in many occasions we were pursued by armed men in the countryside.

So there came a time when our Head Office asked me to be the ACTING TEMPORARY OIC. At 21, when my colleagues were struggling as clerks, I accepted the challenge. I became the head of the branch of one of the biggest financing company in the country. Eventually I ran the Mindanao operations, supporting small and medium enterprises, helping them with credit so that they too can help bring goods and service to the people of Mindanao.

I must have done well because when came back after pursuing my masteral degree abroad, the company made me the head of a development bank in Mindanao. I was 26 then. It is one thing to do credit analysis and then market your loans. What is more challenging is to market for deposits and then matching these with loans that you give out. You need to match the risk profile and cost of your deposits with the risk profile and .revenue from your loans.

Many of you will not have the privilege with being given this challenge. Many of you will work for a bank and will be in one of the departments of that bank. While I urge you to work your way all the way to the top, learn the fundamentals of finance: cost and risks.

My deep understanding of this fundamental relationship between cost and risk helped me immensely when at 36, I was asked by President Ramos to run the largest power company of the country: the National Power Corporation that had the biggest problem of the country as well. The country was experiencing 12 hour brownouts, we were short by roughly 4,000 MW that required over US$5B, the company had no cash and in fact was losing money, the government had no money having just come from a series of coup de etats, and protests were in the streets.

Question: how does an Agribusiness graduate of UPLB become part of the solution to an enormous power engineering problem?

Answer: know your calculus, finance, and accounting well enough to know how to understand the relationship between costs and risks. And be a true iskolar ng bayan by being honest in your work. Your honor untarnished.

Let me ask you: what is more expensive: a power source that costs P5.00/kwh and stays at that level in nominal terms for 25 years, or one that costs P4.50/kwh but is indexed to the price of coal and the forex for the next 25 years. How would you evaluate that?

The answer lies in what you have learned in the four years that you have been here. If you cannot figure that now, either you were absent when that subject was being taught or, you are just a late bloomer.

At this point, I want you to stand up. Look at the people to your right, left, and behind or in front of you. Shake their hands, embrace them, but no kissing. Take your seats.

Remember the names of your friends and classmates, and remember them well. Keep in touch. Be active in the alumni. As you go up through your career you will learn that it is not what you know but who you know that eventually will matter. Some people will tell you that this is a harsh reality: “hindi ako na promote kasi hindi ako sipsip.”

But that is reality.

That is marketing: dapat sumpsip ka sa customers mo.

However there is a caveat: a sincere sipsip cannot be shown unless you have the passion to serve your customers, your market. You cannot serve your market and you cannot be good in marketing unless you know why you are doing what you are doing. And only then can you be good in selling whatever it is you are selling as a person or as a company.

This is my take away: if you want to pursue a career in finance make sure you understand the fundaments of risk and cost. A career in marketing will require you to be passionate about what it is you you so that you can relay that passion to your market in whatever form it may be.

The main message is this: be passionate about what you believe in and let that passion drive you. That way you get to meet people and influence their lives positively with whatever it is that you are passionate about. Conquer the world with you passion!

DUTY HONOR COUNTRY: this is my passion

What is yours?

Good morning and good luck to you all.

 

 

 

 

 

Shared Business View

Addressing climate change is the responsibility of all. Luckily, big global brands are doing their share and choosing to make the shift to cleaner forms of energy.

 For example, last April, tech giants Apple and Google announced that their operations are already running on 100 percent renewable energy. Fortunately, other firms are also stepping up and working double time to source their power needs from greener sources of energy.

 In fact, there are more than 100 influential global companies who have publicly committed to 100% renewable energy through the RE100 initiative. This collaboration of the world’s biggest brands, mostly tech companies was launched in 2014 and have ever since been working on achieving their goals of powering up their operations with renewables.

Last year, other influential non-tech companies have also joined the drive to use greater RE  such as General Motors, Kimberly Clark, General Mills, Starbucks and Target. In total, some 2.78 gigawatts worth of renewables were bought by the RE100’s members in 2017.

These large global brands remain relentless in their pursuit of achieving their targets. This year, members of RE100 are set to break their record by purchasing 1.96GW of renewables. If sustained, corporate RE buying could surpass the peak of 3.12GW recorded in 2015 as reported by the Business Renewable Center.

 One of RE100’s members, Microsoft also made the headlines this April by announcing the largest solar power deal in the US corporate history after buying some 315 megawatts from sPower. The purchase will power the tech firm’s datacenter and cloud business operation in Virginia. To date, Microsoft has already invested a total of 1.2 GW of RE, an amount that can light up roughly 100 million bubs

The declining costs of renewables and companies’ desire for a sustainable energy solution are what drive big business to commit and purchase cleaner forms of energy according to  Kevin Haley, marketing manager at the Rocky Mountain Institute’s Business Renewable Center. “The corporate renewables market is now seeing deals from all industry sectors…… they believe they need to be part of the sustainability solution.”

Addressing climate change is just one of the reasons why large global brands are signing up for more RE purchases. There’s another reason: cost-effectiveness.

These brands’ leadership recognize that sustainable sources of energy will save them money in the long run.  Business leaders understand that choosing to invest in RE will save them money as it eliminates the risk of price volatility of fossil fuels.

 For example,  Urs Hölzle, Senior Vice President, Technical Infrastructure of Google stressed that  “Electricity costs are one of the largest components of our operating expenses at our data centers, and having a long-term stable cost of renewable power provides protection against price swings in energy.”

Autodesk’s President and CEO, Lynelle Cameron echoes the view of Hölzle when she said: “By powering our business with 100% renewable electricity we will not only reduce our carbon footprint but give ourselves a competitive advantage as we protect ourselves against future rises in energy costs.”

For years, I have been trying to convince a great number of people that RE is not necessarily the more expensive energy option. It is refreshing to know that big businesses around the world share my views.

Sadly, many in the Philippines fail to recognize the benefits of renewable energy and still subscribe to the notion of the least cost option, which only considers the upfront costs. We are still caught in the belief of many energy planners and even our regulators that RE will cost us more, and refuse to realize that price spikes and depletion of fossil fuels will set us back.

Lowering energy costs while saving the environment are the two benefits of choosing greener power. Global companies and governments around the world are already seeing the potential of renewable energy and making big bets on cleaner forms of power as RE technology prices drop fast. What else can we do to convince many Filipinos that RE is the key to sustainable and cheap energy?

References:

 https://www.cnet.com/news/renewable-energy-solar-wind-lures-us-big-businesses/

 https://www.weforum.org/agenda/2018/04/microsoft-just-signed-the-largest-corporate-solar-agreement-in-us-history/

 ACCELERATING CHANGE: how corporate users are transforming the renewable energy market. RE 100 Annual Report 2017

 

 

100% Clean and Profit Maximizing

 

apple headquarters

Apple’s headquarter running on renewables. Photo c/o Forbes.com

 

Tech giants Apple and Google are now 100% powered by renewable energy.

Google hit the goal early this April after confirming that the firm’s RE purchases exceeded the amount of energy the company used for operations worldwide in 2017. “For every kilowatt-hour of electricity we consumed, we purchased a kilowatt-hour of renewable energy from a wind or solar farm that was built specifically for Google,” Google Senior Vice President Urs Hölzle proudly announced.

Google is the largest corporate buyer of RE worldwide. Its vow of going 100% renewables started as early as 2010. By 2015, the tech firm was able to source 44 percent of its power needs from renewables.

Apple is not far behind. Less than two weeks after Google’s announcement, the iPhone maker proudly told the world that its global facilities spread across 43 countries are now running on 100% renewable energy. Apple has been rapidly increasing its use of RE in the last few years as it started sourcing 16% from green energy in 2010 until reaching 96% in 2016. Its data centers have been running 100% on RE since 2014.

“We want to put new, clean power on the grid so that we’re not sucking up all the clean energy that’s there,” said Apple VP of environment, policy, and social initiatives Lisa Jackson said in an interview.

Google and Apple are not the only large global companies opting to go for clean energy. Some 130 big brands like General Motors, Wal-Mart, Nike, and Ikea, just to name a few have vowed to use 100% renewable energy under the RE100 initiative.

These big brands’ choice of sourcing their power needs from RE is not surprising. After all, as our teachers in economics taught us, all firms are profit maximizing. It does indeed make business sense to choose renewable energy.

Perhaps, our regulators and even some of the local industry players should take notice of how and why big global firms are betting on renewable energy. As I have been saying for some time now, fossil-fuel powered plants are not exactly the least cost.

These global firms choose to go renewables as part of their commitment to save the planet and also to save money. These companies are reducing their financial risk of having to pay more for their power bills in the future by reducing if not eliminating their dependence on traditional sources of power. This is the same observation of Bloomberg New Energy Finance Analyst, Kyle Harrison when he said: “It gives them stability into what they’re paying for their energy prices, but it also gives them the potential to save money in the longer term.”

Many of the global brands’ management understand the risk of relying heavily on traditional sources of power knowing that commodity prices are unpredictable. These big brands do not want to be vulnerable to commodity price surges, so they diversify their energy mix to hedge against potential increases in world prices. They know that the least cost is not about looking at the upfront costs alone, but rather, also computing the price they will need to pay in the future for the costly consequences of factors beyond their control such depletion of fossil fuels, price spikes, and foreign exchange fluctuation, to name a few.

Plus, of course, the falling cost of RE technology makes going 100% renewable more cost-effective. The price of solar photovoltaic systems alone have dropped by 73 percent since 2010 and will fall further by 2020 according to IRENA.

Surely, these global firms will be grateful to have made the shift to RE when they see their financials in the future. Going renewable makes business sense. And the Philippines could do well by following the footsteps of these global companies instead of sticking with traditional forms of energy.

References:

https://www.forbes.com/sites/energyinnovation/2017/01/26/clean-energy-is-at-the-core-of-american-strategic-interests/#1dc0d6225765

Hampering Our Growth

Southeast Asian countries are at different stages of economic development and will have higher demand for energy. In fact, according to the Global Energy & CO2 Status Report published by the International Energy Agency or IEA, Southeast Asia (SEA) accounted for eight percent of global energy growth last 2017.

An earlier report released by the same agency, the Southeast Asia Energy Outlook 2017  revealed that the region’s energy demand is likely to grow by roughly two thirds and account for a tenth of the world demand by 2040. Installed capacity is set to increase from 240 GW in 2017 to 565 GW by 2040 with coal accounting for  40 percent of the growth. This will push Southeast Asia to become a major importer of fossil fuels by 2040. The IEA predicts that the region’s annual net import bill will be over $300 billion, which is equivalent to four percent of the SEA’s total gross domestic product.

The IEA, however stressed that the region can still avoid incurring such a huge net import amount if governments implement policies that will reduce the demand for energy and increasing the use of renewables. Based on IEA’s estimates, Southeast Asia can lower the import bill by $180 billion if  the region increases Renewable Energy’s share in the mix by 20 percent.

The agency stressed that the increasing energy demand both pose as a challenge and an opportunity as governments can opt to go for affordable policy and technology options. ” The rapidly declining cost of wind and solar PV provides an opportunity to help meet growing electricity demand in a cost-effective and sustainable manner  while also helping spur local manufacturing industries.”

IEA also noted that attracting investments in RE will be crucial to meet the region’s energy requirements as Southeast Asia will need some $2.7 trillion to $2.9 trillion in investments by 2040.

For his part, International Renewable Energy Agency or IRENA director-general Adnan Z Amin noted that Southeast Asian countries should do a better job in attracting higher investments for RE development.

He stressed that despite the falling costs of RE technologies around the world, financing for RE in SEA countries remain a challenge given the lack of clear policy and regulatory frameworks for investors. He urges SEA countries’ leaders and regulators to come up with clear and reliable long-term policies to attract financing for the sector: “Basically what we’re lacking right now is a sense of government resolve and a sense of adequate, reliable policy framework that allows the private sector to come in…The market opportunity has to be created by policy and regulations.”

 

eco business

Southeast Asia can save $180 billion if more renewables are used by 2040. Photo c/o www.eco-business.com

 

Unfortunately, the observation of the IRENA president reflects the state of our policies and regulatory environment of the energy sector in the Philippines. The regulations here in the country are far from friendly to RE developers and do scare potential investors.

For one, the foreign ownership restriction in our constitution prevents investors from coming in to help us build more RE plants. As I have suggested in the past, it is time for us to consider allowing foreign investors to provide the equipment and technologies needed convert our resources into power while limiting their ownership on the natural resources. After all,  building RE power plants is an expensive undertaking and there are very few local businessmen who can afford to develop RE.

Aside from our problem in the foreign ownership, our regulators and even some of the players in the sector fail to realize the importance of renewables on the economy.  As I have been discussing thoroughly in this blog, we need to realize that the concept of least cost– where we only look at the upfront cost of building our power plants– hinders RE from becoming mainstream in the country.

We seem to forget that the risks of foreign exchange fluctuations, global fossil fuel prices and other market conditions will cost us more in the future. Our country cannot fully realize the benefits of RE unless we appreciate  the crucial role it plays in ensuring both energy security and equity. This is unfortunate for us as our country has been blessed with natural resources we can tap to help us achieve equitable economic growth.

Plus, the world is heading towards distributed generation and smart grids with the advancement of technology and yet the Philippines still rely on central generation. Unfortunately, we still lack rules on distributed generation and remain focused on distribution monopoly controlling the development of embedded generation. This hampers the development of RE.

Our government should pave the way for a more flexible design of a distribution system that can immediately supply the power demands and at the same time deliver the preferred sources of power to the customers.  Our distribution companies should have intelligent systems capable of accommodating renewable energy sources. We need to take a good look at our distribution system and make some drastic changes if we are serious in our desire to bring more renewables in our energy mix.

These are just are some of the problematic  issues that the sector needs to address and there are more.  Around the world, developments are taking place to accommodate greater use RE, and unless our country and regulators are able to address the myriad of problems hounding the energy and hampering more investments in renewable development, then the Philippines will surely be left behind by the rest of the world.

References:

Southeast Asia Energy Outlook 2017: https://www.iea.org/southeastasia/

Global Energy & CO2 Status Report
The latest trends in energy and emissions in 2017:https://www.iea.org/geco/

https://www.businesstimes.com.sg/asean-business/clear-reliable-policy-direction-in-asean-needed-to-attract-renewables-investment

Honoring Commitments: A Hot Warning

The historic 2015 Paris climate agreement saw world leaders committing to limit the average global temperature rise to “well below 2°C” above pre-industrial levels to combat climate change and its effects.

However, more than two years after the signing of the accord, the International Renewable Energy Agency or IRENA notes that “current emission trends are not on track to meet that goal.” In its report, the Global Energy Transformation: A Roadmap to 2050, released last April, the agency stressed that current and planned policies of governments are far from achieving their emission reduction targets. Fossil fuels like natural gas, oil and coal would still dominate the global energy mix in the next decades.

The Energy agency stressed that the goal of keeping the world’s temperature rise below 2 degrees Celsius is technically feasible. But it is imperative to scale up renewable energy (RE) at least six times faster so that the world can start hitting the goals set out in the Paris Agreement. “Global energy system must undergo a profound transformation from one largely based on fossil fuel to one that enhances efficiency and is based on renewable energy,” the report added.

The report also emphasized that all countries can grow the proportion of RE in their overall energy use. According to IRENA’s global roadmap, the REmap, nations can source 60 percent or more of their total energy consumption from renewable energy. After all, the world would need to increase the share of renewable energy in the power sector from 25 % in 2017 to as much as 85% by 2050. “If we are to decarbonize global energy fast enough to avoid the most severe impacts of climate change, renewables must account for at least two-thirds of total energy by 2050,” IRENA Director-General Adnan Amin said.

To accomplish this feat, new approaches to the power system, planning, system and market operations, regulations and public policy must take place IRENA stressed

The Energy agency also noted that all regions of the world would benefit from the energy transformation. Areas like East Asia, Southern Africa, S. Europe and Western Europe are set to have high welfare gains from this transition through reduced greenhouse gas (GHG) emissions.

So, it’s not only the Philippines that’s having a difficult time in meeting the goals set by world leaders in the Paris agreement since there is a need to undergo a major shift to cleaner forms of energy around the world.

Unfortunately, the world’s lack of action in fighting climate change will hurt vulnerable regions like Southeast Asia.

Hans Joachim Schellnhuber, a member of the Pontifical Academy of Sciences in the Vatican and the Director of Germany’s Potsdam Institute for Climate Impact Research (PIK) last year warned that Southeast Asia might end up suffering from daily extreme temperatures if the world keeps us with high emission level where “All of the tropics will develop conditions that physiologically, humans cannot live outside anymore.”

His study, “A Region at Risk: The Human Dimensions of Climate Change in Asia and the Pacific” showed that it is possible for temperature to increase to 1.7 degrees Celsius above pre-industrial levels by 2030, up to 2.7 degrees by 2050 and even up to 4 degrees by 2070 or the temperature “where you would collapse.”

This means that the Philippines and its neighbors could “see a complete shift in living condition” where people would be forced to flee their homes. The Nobel Prize winner further added that “You would actually have to give up the Philippines altogether….Unless you put the entire population into a shopping mall, which would be a very big mall,”

This summer, the Filipinos have already endured warm temperature with the heat index reaching 46.8 8°C in Sangley Point in Cavite. Our weather bureau, PAGASA, classifies heat index temperatures from 41 to 54°C as dangerous where “heat cramps and heat exhaustion are likely” and that “heat stroke is probable with continued activity.”

 

dried land

Dried-up rice field in Cavite as heat index this summer reaches dangerous levels. Photo c/o of philstar.com

 

Can you imagine having to endure warmer temperature than the ones we have this summer? As Schellnhuber stressed, we Filipinos will be unable to live outdoors if we all fail to limit our GHG emissions.

The problems of Boaracay may not be limited to the quality of the water alone. If we do not do anything about climate change soon, sea levels will rise in the coming century by as much as 1.4 meters most likely engulfing the not only Boracay but our other lovely islands as well.

Clearly, there is a pressing need for us to do our share in limiting the average global temperature rise to the desired level as we are the ones who will suffer from the effects of climate change. Fortunately for the Philippines, it is possible to help reduce GHG emissions by relying more on cleaner forms of energy.

In fact, the country can supplement its power needs with renewables by 57 percent to 60 percent by 2040 with the right policies according to research from the International Food Policy Research Institute (IFPRI). “The Philippines’s current energy-supply mix must be diversified to minimize import dependency on fossil fuels and meet the country’s energy needs,” said Alam Hossain Mondal, a researcher at IFPRI and lead author of the study. And as I have repeatedly stated in the past, the impact of reliance on fossil fuel hits our ordinary households. The weakening of the peso and increasing coal prices will adversely affect the ordinary Filipino.

He further added that failure to add more RE in the power mix would result in greater fossil fuel dependency by an average rate of seven percent per year. As a result, CO2 emissions could reach 144 million tons by 2040 from the 43 million tons recorded in 2014.

Indeed, it is time to pay attention to how we can help the world limit the average global temperature rise. Yes, the Philippines and even its neighbors’ contribution GHG emissions may be negligible compared to advanced countries. But since the country and its neighbors are at risk if we fail to mitigate the effects of climate change, then it would be beneficial for us to help reduce our GHG emission.

It is time for us to exert our best effort to honor our commitment in the Paris Agreement. And it starts by sourcing more power from cleaner sources.

References:

https://www.irena.org/publications/2018/Apr/Global-Energy-Transition-A-Roadmap-to-2050

https://businessmirror.com.ph/ifpri-phl-could-supplement-57-60-of-its-energy-needs-with-renewables-by-2040/

http://www.interaksyon.com/expert-warns-with-no-cap-on-greenhouse-gas-emissions-going-outdoors-will-be-deadly-by-2100/

http://www.gmanetwork.com/news/scitech/weather/650902/heat-index-over-41-degrees-in-several-areas-across-phl/story/

A More Cost Effective Alternative

Even before he assumed office, US President Donald Trump vowed to bring back jobs to the coal sector. Shortly, after elections, he signed an executive order to overturn the Clean Power Plan to revive the coal industry.

However, it seems like his efforts did not stop US utilities from shutting down coal-fired plants. Last year, 27-coal-fired plants with a combined 22 gigawatts (GW) capacity were announced for closure and early this year, energy companies have said that that they will close down at least five coal plants with more than a 1000 GW total capacity.

These announcements of closure are not surprising. Coal generation in the US has declined by 28 percent from 2012 to 2015 as more energy companies realized that shifting to Renewable Energy (RE) is the most cost-effective solution in bringing down power rates. In fact, several US utility companies are set to retire their coal plants and replace them with RE ones.

For example, the Public Service Company of New Mexico (PNM), the largest energy company in New Mexico, which boasts of roughly half a million customers will start retiring coal by the year 2022. PNM, which generated approximately 56 percent of its power from coal in 2015 will begin shutting down coal plants as it plans to produce all its power from solar energy, natural gas and even wind power in a bid to improve their financials and lower rates.

PNM’s Integrated Resource plan for 2017-2023 released April last year concluded that phasing out coal completely was the best way for the firm to match the demand for power with the lowest cost in the coming years. According to PNM’s estimates, the company’s most cost-effective portfolio is to increase the use of renewables to 36 percent and 33 percent from natural gas by 2035 from 11% and 6% respectively in 2017.

Similarly, Wisconsin’s largest utility, We Energies decided to shut down its 1.2 GW Pleasant Prairie coal plant this year. The energy company with its 2.2 million customers, sourced 50.6 percent of its capacity from coal in 2015 and will replace a portion of the size with its 350 MW solar power plant by 2020.

Likewise, in Texas, Luminant, an energy firm that supplies some 18 GW of power has decided to close its 1.8 GW Monticello power plant in January as well as two other coal plants with a combined generation company of 2.3 GW and will replace the lost capacities from coal plants with wind power. So far, the firm can generate 21 GW of wind power and additional 14-27 GW solar power by the year 2030.

These are just some of the major utilities in the US that are now moving away from coal and shift to cleaner forms of energy, and there are more. After all, contrary to those opposed to RE, it is possible to go 100 percent renewables.

We do not have to look far to see such an example. Recently, the local government of Guimaras, the small island province in the Visayas announced its “Guimaras 100% Coal Free Declaration,” a ban on coal-fired plants in the province. In his speech, Guimaras Governor Samuel Gumarin said that “The people of Guimaras have embraced renewables over dirty, polluting energy. We want to show that a sustainable-development path, powered by renewable energy, is not only possible but more viable.”

guimaras

Windmills in Guimaras. The province declared a complete ban on coal power. Photo c/o http://www.evwind.es

 

Guimaras is not the only province in the country that favors RE. Last March, the Bohol local government through its Bohol Energy Development Advisory Group or BEDAG has decided to prevent the building of new coal plants in the province. In a statement, the BEDAG said: “the BEDAG and the entire Provincial Government of Bohol are fully intent on maintaining the sanctity and pristine condition of the environment.”

The development came after the provincial government via an SP ordinance has declared environmental impact as the most important consideration for the selection process for interested energy developers as part of the province’s energy development program. The provincial government will institutionalize its “No Coal” stand through an ordinance.

The above examples only show that it is possible to shift from coal power to cleaner energy. Unfortunately, while others are already shutting down coal-fired plants to lower energy costs, we in the Philippines are busy building them since 90 percent of the roughly 7300 MW capacity approved or already for construction by the Energy Department are coal-fired power plants. This despite calls from experts, world and business leaders to work extra hard to make the shift to greener forms of energy possible.

I wonder how long and what will it take to convince others that RE is the practical choice for all of us.

References:
https://www.forbes.com/sites/energyinnovation/2017/05/18/embracing-the-coal-closure-trend-economic-solutions-for-utilities-facing-a-crossroads/#1f05af1b1c99
http://www.iloilotoday.com/2018/02/guimaras-declares-coal-free-receives.html

http://www.boholchronicle.com.ph/2018/04/02/govt-blinks-no-to-coal-power-in-bohol/

Everyone Is Reaping The Benefits of Lower RE Prices, But What About Us?

The International Renewable Energy Agency (IRENA) says that all renewable energy technologies will be at par with fossil fuel costs by the year 2020.

In its report, Renewable Power Generation Costs in 2017, the organization noted the significant drop of prices from 2010 for both solar photovoltaic (PV) power, which dropped by 73 percent and onshore wind by 23 percent.

At present, onshore wind power average cost is at $0.06 per kilowatt-hour (kWh) while solar is to $0.10. These amounts are close to the cost of electricity generation from fossil fuels, which is somewhere between $0.05 to $0.17 per kWh.

The study predicts that solar prices will trim down by as much as 50 percent by 2020 and that in the next couple of years, both RE technologies are likely to cost $0.30 per kWh.

For the director general of IRENA, these falling costs are an indication that significant changes are about to sweep the energy sector: “These cost declines across technologies are unprecedented and representative of the degree to which renewable energy is disrupting the global energy system,” he noted.

The report also stresses that soon the RE sector will flourish even without subsidies and will continue to do so with the proper government support: “Already today, and increasingly in the future, many renewable power generation projects can undercut fossil fuel-fired electricity generation, without financial support. With the right regulatory and institutional frameworks in place, their competitiveness should only further improve.”

 

solar prices

Solar prices will trim down by half by 2020. Photo c/o http://www.wsj.com

 

Fortunately for the Philippines, we have access to plenty of sunlight. In fact, one study showed that the country could generate as much as 16.17 watts per square meter of solar power. However, our regulatory framework and support for the RE sector are weak. This means we cannot hope to lower down the costs of our renewables unlike what is happening in other countries.

We have to keep in mind that traditional sources of energy continue to dominate our energy mix and will continue to do so in the next 10 years. A BMI Report said that the share of coal is likely to increase by 10 percent over the decade, “The share of coal [is]actually increasing over our 10-year forecast period—from just under 50 percent in 2017 to over 55 percent by 2027,” BMI noted.

The Fitch-owned BMI also sees that RE will contribute around 20 percent of the total power mix in 2020 and a decrease to 16 percent in 2027.

Now, those figures are alarming since the above numbers do not reflect our government’s commitment to shifting to greater use of renewables, to as much as a third of the power mix. This is a point stressed even by BMI: “However the country has released few details on how they intend to reach its target, particularly given the dominance of coal in the project pipeline,”

So, while other countries around the world are enjoying lower costs of power because of RE, the Philippines is not only being left behind but will also have to endure the complete opposite of lower costs of energy: the higher cost of power.

As I have been saying again and again in this blog, our dependence on traditional sources of power comes at a high cost because we import our raw materials, particularly coal from other countries.

The BMI estimates that the Philippines imports around 75 percent of its coal supply from Australia and Indonesia. We pay for these imports in dollars.

Let us not forget that experts predict that the Philippine Peso will be the worst performing currency in Asia this year. The head of trading for the Asia Pacific at Oanda Corp. in Singapore, Stephen Innes even described the Philippine peso as “ the local whipping boy in the region.” Just in the middle of February, the Philippine Peso hit an 11-year low as it fell to P52.12 against the United States dollar.

And as the peso falls against the dollar, we can expect higher power rates. Last February, the biggest power distributor in the country, Meralco has announced a rate hike of P1.08 per kilowatt hour (kWh). This means that the average household consuming 200 kWh per month will need to shell out additional P216 for their monthly bill for January partly because of the depreciation of the peso against the greenback.

That’s just the problem with relying heavily on coal power plants. The Filipino people end up paying more for their power consumption for things beyond their control such as the peso depreciation or increase of costs of imported coal because these two are passed on costs to consumers. We could help alleviate the plight of the Filipino consumers if we can tap our natural resources and rely heavily on them for our energy needs instead.

It is ironic and sad that the Philippines, a country that has natural resources available for more development and use of RE, has to rely on imported coal for our energy needs. Clearly, something must be done about it to help alleviate the suffering of Filipino consumers.

References:

Renewable Power Generation Costs in 2017, IRENA

http://www.manilatimes.net/coal-top-55-ph-power-mix-2027/377594/

https://www.rappler.com/business/196059-philippine-peso-weakest-p52-us-dollar

http://www.manilatimes.net/meralco-hike-rates-p1-08-kwh-feb/378957/

https://www.bloomberg.com/news/articles/2017-12-21/philippine-peso-seen-as-asia-s-laggard-for-2018-as-deficit-grows