We Knew It Was Bound to Happen

Indonesia’s ban on coal export prompted importing countries including the Philippines to make and appeal. Photo c/o http://www.aljazeera.com

Last January 1, Indonesia suspended exports of coal after its state power utility announced dangerously low levels of the fuel among domestic power stations. Indonesia is the world’s largest coal exporter.

The ban on exports pushed coal prices higher in Australia and China. Indonesia’s move also prompted Asian governments like South Korea, China, and the Philippines to make an appeal to Indonesia to lift the export ban. Philippines Energy Secretary Alfonso Cusi asked the Department of Foreign Affairs (DFA) to intercede via the Association of Southeast Asian Nations (ASEAN) cooperation mechanism.

Our Energy Department’s appeal should not come as a surprise. After all, the Philippines remains heavily reliant on coal for power generation and procures most of its needs from Indonesia. Data shows that 70 percent of the Philippines coal supply for 2020 was imported. In 2021, the Philippines sourced roughly 2.4 million tonnes of coal monthly from Indonesia. 

Indonesia requires coal mining companies to fulfill their Domestic Market Obligation (DMO) where they need to sell 25 percent of their output locally before they can export. Indonesian authorities are blaming the coal supply problems on miners as they are failing to fulfill their DMOs.

On January 13, Indonesia announced that it would allow 37 vessels loaded with coal to depart, slightly easing the coal export ban. However, this doesn’t mean that the Philippines’ problem is over.  

A Citi research note released last January 5 estimated that roughly 490 out of 631 Indonesian coal miners met their DMO, representing 35 to 40 percent of Indonesia’s total coal production. If these companies fail to meet their DMOs then they won’t be allowed to export. There might not be enough supply for major coal importers like the Philippines, and coal prices are likely to surge if the ban continues. For the Philippines, this would result in power outages and higher rates.

I have been warning of this risk for many years now. At the start of the COVID-19 pandemic, I feared that Indonesia would close its ports, which means we cannot export coal. This would have put our power supply at risk. Thankfully, it didn’t happen then. But we all know that our power supply remains under threat as long as we continue our dependence on coal.

There are several ways we can mitigate this threat to our power supply. Our government should have long taken more aggressive measures in developing renewable energy resources. It should have ordered the immediate development of indigenous sources of power— wind, solar and geothermal. At this point, the government should act quickly and start by modifying power sales procurement rules. It must take draconian measures such as requiring distribution utilities to source a higher percentage of renewables.

The Energy Regulatory Commission (ERC) should mandate that all distribution utilities during the procurement stage testify that no indigenous resources within its franchise area or vicinity are available or there are no offers from any indigenous sources. Simply put, the ERC should order that utilities must negotiate or bid with renewable energy providers before purchasing from imported energy sources.

Likewise, we should take a look at how we interpret the constitutional provision on foreign ownership. Former Energy Secretary Atty. Raphael Lotilla in an Energy Forum last October stressed the importance of allowing more foreign investors to enable the Philippines to develop its renewable energy sources. He pointed out that the 40 percent cap on foreign ownership should only be applicable to finite sources as the constitution refers to “potential energy”. Solar and wind, which can be converted quickly to power should not be viewed as potential energy. These energy sources must not be subjected to the 40 percent foreign ownership rule.

Aside from Indonesia’s ban on coal exports, the Philippines is also facing the risk of higher prices of imports. Recently the International Monetary Fund (IMF) noted that emerging markets could be at risk when the US Federal Reserve increases interest rates earlier and faster than it had earlier planned. For the Philippines, this would mean elevated import costs for fuel and other raw materials. In the event, this occurs and Indonesia continues to ban coal exports, then we are doomed.

In the end, the best time to be more aggressive in developing renewable energy sources to ensure continuous supply was many years ago. Asking the Indonesian government to lift its ban on coal exports is a temporary measure as our best bet has always been to become less reliant on coal by developing and harnessing indigent power sources.

Empty Gestures

40 countries signed to stay away from coal during COP26. The Philippines, however refrained from promising to phase out coal-fired plants. Photo c/o Rappler

During the UN Climate Change Conference of the Parties (COP26), in Glasgow, Scotland, 40 countries signed to stay away from dirty coal.

However, local reports noted that the Philippines refrained from committing to phase out coal-fired power plants.

The agreement had four goals. The first is to rapidly scale the deployment of clean power generation. Second is to phase out coal power by 2030 for advanced economies and 2040 for the rest of the world. The third is to end all investments in new coal power generation both domestically and internally. Fourth is to make a just transition that benefits communities and workers.

However, as reports stressed not all signatories committed to all of the four mentioned goals. Our Energy Secretary who signed on behalf of the Philippines only endorsed goals/clauses one and four. 

A report by Manila Bulletin on this issue said that the Energy Department’s formal correspondence to the chargé d’affaires at the British Embassy-Manila, who solicited the Philippine’s support to the “Global Coal to Clean Power Transition Statement”, only said that the country only supported calls for an energy transition that will primarily be driven by more renewable energy installation and addition of energy efficiency technologies.

The said correspondence was notably silent on whether the Philippines will pull the plug on coal-fired power generation. The letter of the energy secretary instead demanded that climate justice from industrialized countries that are spewing higher scale carbon emissions. “We would like to reiterate the energy sector’s call for climate justice given that the Philippines is not a major emitter of greenhouse gases (GHG) but bear the worsening impacts of climate change,” Energy Alfonso Cusi in the letter said.

He also stressed that the country’s foremost agenda is energy security since “energy transition comes as a means to improve the lives of our people and for our country’s economic development.”

Perhaps, we should not be surprised at our government’s lack of commitment to phasing out coal completely.

During the forum on national energy security sponsored by UP Vanguard Inc. last October, most of the panelists agreed that it may not be feasible for the Philippines or the rest of the world to completely phase out coal by 2040. Mr. Gil Quinoñes the newly minted CEO of Commonwealth Edison Company, Chicago’s primary utility company said that it is more doable to achieve 80% electrification by renewable energy.

However, some of the panelists also slammed the government’s inaction in ensuring swift energy transition. One of our panelists, former Energy Undersecretary Atty. Jay Layug stressed that there has been a major decline in new renewable energy capacity addition in the last five years. He noted that there have only been 800 megawatts (MW) RE new cavity out of the 4930 MW capacity added in the last five years while from years 2010 to 2016, renewables contributed roughly 1,500 MW out of the 5180 MW of the total added capacity.

Atty Layug stressed that the Philippines cannot afford a technology-neutral policy and instead pave the way for a faster transition to clean energy.

To add to these thoughts, it seems to me that the drive for energy security is being used as an excuse for our lack of commitment to adopting more renewable energy in our power mix. Are we really achieving energy security by insisting on our reliance on fossil fuel power?

As I have discussed in a previous post, there are various definitions of energy security. For one, the Internal Energy Agency (IEA) defines energy security as “the uninterrupted availability of energy sources at an affordable price.” I have argued that energy security is difficult to define. However, I can easily tell you is that the Philippines is facing multiple risks when it comes to energy security.

Our reliance on imported coal is a source of insecurity. As I have mentioned, at the beginning of the pandemic my fear was that Indonesia, our major source of coal could close its border, which means we can’t import coal from them. 

Relying on imports also means that consumers are affected by global supply issues and pricing. Currently, oil prices are going up. Data from Energy Department showed that diesel prices have gone by Php18.10 per liter since the start of 2021 So, are we really heading towards energy security when we remain reliant on coal and oil?

If we are to follow IEA’s definition, then we are not achieving energy security as our power rates remain expensive especially when global prices go up.

I agree that we cannot fully phase out coal in the next 20 years, but the government has been quite slow in its push for renewables. This is evidenced by the downward revision of the share of renewables in the Philippine Energy Plan (PEP) 2020-2040. Recently, the Energy Department released its amended PEP 2020- 2020, which set a target of 50% renewable share in the power mix by 2040. In contrast, its previous PEP 2018-2040 set the target to a 54 % share of the power mix.

The Department did not explain why it changed its target. It’s quite baffling especially since it had already declared a moratorium on new coal-fired power plants last year.

Naturally, DOEs lack of commitment to end financing for coal or to end coal during COP 26 has been met with strong criticisms. Greenpeace Philippines Campaigner, Khevin You said that the organization is denouncing in “the strongest possible terms the Philippine government’s shameless climate hypocrisy and its lack of political will to end coal use and chart a decisive path away from dependence on fossil fuels.”

Likewise, the Center for Energy, Ecology and Development (CEED) said the government’s commitments are just an “empty gesture.” 

I again go back to what our panelists said in the UPVI forum. We have enough laws and we are not running of ideas on how fast we can transition to renewable energy but what we need is consistency in policy enforcement. We need political will and decisiveness in implementing laws. We need strong leadership to ensure a fast clean energy transition. Indeed, we don’t need empty gestures.

Is Power Distribution Still a Natural Monopoly?

Photo c/o https://energydemocracyyall.org

In his last State of the Nation Address (SONA), President Rodrigo Duterte asked Congress to pass priority bills including the proposed amendments to the Public Service Act.

Senate Bill No 1441 seeks to amend the Public Service Act to define the difference between “public service” from “public utility.” The amendment will lift nationality restrictions in the investment in areas of transportation, power generation, and supply, telecommunication, and broadcasting, among others. The 1987 Constitution does not define “public utility” and thus limits the allowed foreign investments in various sectors.

Under the bill, public utility will be treated as a mere subset of public service. Only three main industries will be treated as public utilities as they are argued as a natural monopoly. These three include Water Works and Sewerage, Transmission of Electricity, and Distribution of Electricity, which will be covered by the 60-40 rule on foreign ownership.

But my question is, must electricity distribution be considered a natural monopoly? A “natural” monopoly cannot be legislated by Congress. It is a market condition Legislating it as such is tantamount to legislating the law of supply and demand.

A natural monopoly exists because of either powerful economies of scale or high start-up costs in specific industries. It’s when a single entity is technologically capable of serving an entire market at lower costs rather than having multiple firms serve the same market.

According to a paper by Electricity Daily, it was more than a century ago when Samuel Insull, considered a legend in exploiting new technologies, masterfully demonstrated how a single firm could offer power at a much lower cost than the combined multiple small power companies. He invested in large turbines and boilers and connected such generators with many customers.

The paper entitled “Will distributed energy end the utility natural monopoly” stressed that natural monopolies thrived as policymakers embraced the idea of providing power at a lower cost to consumers by giving a single firm a legal monopoly and regulating power prices to recover costs. The policy was to offer exclusive rights to serve and combine it with cost-based regulation.

The study noted that the policy approach to natural monopoly is still highly recommended by economists today. I share the views of the authors of the paper when they said that we can easily confuse legal monopolies with natural monopolies. The Senate bill proposing to classify electricity distribution as a public utility is a testament to that fact. Plus, in the Philippines, only one entity is allowed to distribute in a franchise area.

The monopoly is legally created and is a clear illustration of Nobel Prize winner Vernon Smith’s point that regulators have encouraged monopoly in electricity markets. Economics professor Smith’s paper “Currents of Competition in Electricity Markets” noted that “Regulation has been applied far too broadly to the electric power industry. As a result, policies intended to restrain monopoly power have instead propagated that power.”

The past few decades have shown that technological advances are eroding utilities’ natural monopolies. Take the case of Independent Power Producers (IPPs) that are financed, developed, and operated by multiple independent companies that offered lower-cost power than a single larger counterpart. These IPPs proved that generation can be done by smaller firms at a lower cost, thus breaking the notion that power generation is not a natural monopoly.

We are now seeing the same happen on the distribution side with the emergence of distributed energy resource (DER) technologies and digital technologies.

A study published by the Massachusetts Institute of Technology noted that “DERs and digital technologies dramatically expand the number of potential investors in and operators of power system infrastructure, challenging traditional means of planning and coordinating the construction of generation, storage, and network assets.”

The study entitled “Restructuring Revisited: Competition and Coordination in Electricity Distribution Systems” stressed that there are relatively few barriers preventing investors and even consumers from adopting DERs in most developed power systems.

The authors also noted that “Indeed, many DERs (for example, “smart” HVAC units and water heaters) look more like consumer electronics than power sector resources. Consumers do not need to coordinate with the DNO/SO to install and operate these devices, despite the fact that these devices can have significant impact when considered in aggregate.”

The emergence of new technologies such as battery storage, rooftop solar, and non-wire alternatives (NWAs) are disrupting the long-held notion that power distribution is naturally monopolistic. These technologies are bringing down the fixed costs and high start-up costs in distributing electricity.

We only need to look at the case of NWAs, which use microgrids and DERs to replace the traditional “wire and poles” infrastructure in power distribution. Utilities that opt for NWAs avoid the expensive infrastructure investments.

US-based utility firm, Duke Energy makes a great case for the use of NWAs. The firm built a renewable micro gird on Mount Sterling in Great Smoky Mountain National Park and opted for non-wire alternatives in distributing electricity. The microgrid used 10kW of solar and 05 kWh of storage, allowing the firm to avoid shelling out large investments of a four-mile, 12.47 kV grid-connected distribution feeder.

Another US firm, Con Edison was able to avoid spending $1 billion for infrastructure by using $200 million non-wire alternatives under the Brooklyn-Queens Demand Management program. Con Edison opted for the combination of NWAs, DERs, solar-plus-storage microgrids to provide independent power to an area in Brooklyn while avoiding the high costs of lines and poles.

There are other new technologies available that can remove the barriers to entry in power distribution.

We also now have an Advanced Meter Infrastructure, enabling two-way communication of homes and network providers. The two-way communication allows the system to analyze data and act accordingly. Data that can be aggregated, analyzed, and communicated allows sector players to come up with services and products previously unavailable in the system.

Plus, the decreasing cost of information and communication technologies (ICT) will drive the network to improve resiliency and grid management, and increase competition. The Philippines is in a good position to capitalize on the decreasing ICT costs as the entry of the third telco, DITO will pave the way for more seamless integration of ICT and the power system.

So, must we still consider power distribution as a natural monopoly? New technologies are removing the barriers to entry, enabling more entities to enter the sector. Technological advancements allow multiple firms to serve the market more efficiently and cost-effectively than a single firm these days. Why do we insist that natural monopoly exists when there is a second or third player willing to distribute in the same franchise area?

The 1987 Constitution says that monopolies should not exist when public interest is at stake. The State after all should protect the public interest rather than the regulated or legal monopoly. Maintaining legal monopolies runs counter to what the constitution mandates as monopolies put consumers at a disadvantage. The lack of competition gives no incentive to the franchise holder to lower operating costs or provide excellent power distribution services.

We now have the opportunity to introduce competition into electric power distribution as new technologies offer new opportunities to lower power system costs. Instead, we are continuing to legally create monopolies. Smith’s assertion comes into mind “There are numerous ways to introduce competition into electric power distribution. Perhaps the most obvious is to eliminate state policies which grant distributors exclusive operating permits. Customers should have the right to bypass distributors and contract directly with generator owners.”

Power distribution is not a natural monopoly, we are only viewing it as such. Unfortunately, this view runs counter to the essence of the Electric Power Industry Reform Act (EPIRA), which was signed into law primarily to promote competition. Creating legal monopolies and protecting them also goes against our constitution. Failing to recognize that competition in power distribution exists and is possible with the right regulation is a disservice to Filipino consumers.

Additionality: A Concept Often Overlooked in Local Geothermal Energy Development

Photo c/o https://climatographer.com/

The term “additionality” is often used in the climate change space, pertaining to when greenhouse gas projects’ impact exceeds their initial targets.

Cambridge Dictionary defines the word “additionality” in two ways.

In an environmental context, additionality according to the Cambridge dictionary is when there is “the reduction in the amount of carbon dioxide gas released into the environment that happens only as a result of trading carbon credits.”

The Dictionary’s other definition is finance-related, with additionality being described as “the situation in which a government or organization is able to get money from another government or organization especially the European Union, only if it pays for most of the project itself.”

The Organisation for Economic Co-operation and Development (OECD) has identified three kinds of additionality in impact investing, namely financial additionality, value additionality, and development additionality. It is financial additionality that I would like to focus on in discussing the problems in our local renewable energy development

According to the OECD, financial additionality “describes a private-sector investment that otherwise would not have happened.”

Energy consultancy group in the Asia Pacific, Lantau Group has a simplified definition, describing the term additionality as “when someone takes an otherwise non-viable project and makes it happen anyway.”

We can take the concept of additionality and apply it to our local geothermal energy development conundrum.

Local geothermal energy development has been stagnant as very few private entities are willing to undertake exploration risks. Previously, the government shouldered the cost of the preliminary surveys of geothermal areas. Those days are gone now since after the passage of the Electric Power Reform Act or EPIRA, geothermal power exploration and development are left entirely to the private sector. The exploration costs are assumed by the private developer. So, we can say that private firms offer financial additionality when they embark on geothermal exploration and eventually development.

The Lantau Group stresses that additionality implies a premium, and “is clearly a requirement of the economic concept of making something happen that would not otherwise have happened. “

The research group further added that risk is an important element of additionality as investors typically spot an opportunity that looks attractive in current market conditions “but if that value proposition is incomplete or could deteriorate in the future, the investor has to consider risk.”

And there lies the problem with our renewable energy projects, particularly geothermal energy development. Unfortunately, our regulators fail to realize that additionality is about premium. Local regulators have such little appreciation of the risks being assumed by private geothermal developers. This can be seen in our current tariff setting.

I have discussed this lack of appreciation in a previous post. To recap, our tariff setting uses the Beta in computing for the cost of the equity under the Capital Asset Pricing Model or CAPM. The Beta determines the return on equity for any project.

Given the risks being assumed by the private sector in geothermal energy development, one would think that Energy Regulatory Commission (ERC) would offer a premium for the risks of geothermal energy development. Sadly, our ERC uses the same Beta across all power projects, failing to consider the risk profile of each power plant project. The CAPM is being incorrectly applied in our tariff setting.

So, as with the concept of additionality, why should investors put their money into developing geothermal resources when there is no premium to make something happen that would not otherwise happen? Geothermal greenfield exploration costs a lot of money. And one study done by the International Finance Corporation some years back showed that worldwide, only 60 percent of the explored holes turned out to be successful.

It’s clearly easy to see why investors are shying away from geothermal energy development as they are assuming high risks of exploration but won’t be properly compensated for assuming those risks. Again, for investors, a premium is needed to make something happen that would not otherwise have happened.

Revisiting the problems in geothermal energy development in the Philippines is not just timely but also necessary. For one, we are now experiencing rotational brownouts as of this writing given the lack of supply as more people turn on their cooling device this hot season.

For the entire first week of June, red and yellow alert statuses were raised on the Luzon grid. The grid operator was projecting a power supply deficiency of around 201 megawatts. The long-term solution, National Grid Corporation of the Philippines (NGCP) says is to add to the current power supply as demand continues to rise.

The NGCP has warned us of an impending power supply shortage in Luzon as early as March saying that operating margins were forecast to be thin from April to August this year. The grid operator called on policymakers and power industry players to address the impending shortage.

It was a warning that was downplayed by the Department of Energy (DOE) claiming that supply and demand projections don’t indicate any possibility of a red alert, although the Energy Secretary did admit in a Senate Energy Committee that a power generating capacity supply shortage does exist.

The current power supply and demand situation highlight the Philippines’ problem with energy security, particularly energy power supply problems.

More so, since there has been a moratorium on new coal power plants. Banning new coal-fired plants is a step in the right direction but without proper planning, the moratorium also leaves the country in a more vulnerable position. We are left with very limited options for baseload power plants, namely diesel, gas, and geothermal.

Geothermal power can act as a baseload plant, which is why it’s a great substitute for traditional sources of power. We can use geothermal to replace coal-fired plants.

Plus, new geothermal technologies are emerging. For example, there’s Google’s partnership with Fervo and Dandelion energy.

Fervo is developing the world’s next geothermal project, which will offer an “always-on” carbon-free resource. The company is working on how to use advanced drilling, analytics techniques, fibre-optic sensing, artificial intelligence and machine learning. Fervo aims to use AI and machine learning so the geothermal plants are more effective in responding to energy demands while fiber-optic cables can collect real-time data on temperature and flow of the geothermal resources so the best existing geothermal resources can be identified.

As for Dandelion, it’s making home geothermal heating more accessible. So far, the firm has installed hundreds of geothermal heating sites in New York and is currently improving its drilling technology to make residential drilling and heat pump installation easier and also more competitive with the current fossil fuels.

All these new technologies and developments in geothermal energy development should bode well for us as the Philippines have massive geothermal energy sources. Addressing the challenges hindering the growth of geothermal energy development in the country swiftly will go a long way in providing more baseload power and more alternatives for the consumers.

Thus, it’s important for us to review the concept of additionality and how our failure to provide investors with a premium is keeping us from using other sources of power for baseload. Our regulators need to incentivize investors. The government can no longer engage in exploration and development so it’s up to the private sector to make something happen that would not otherwise have happened or simply put help make more geothermal power more available.

Revisiting the Role of Battery Storage in Renewable Energy Development

According to the annual report of the International Renewable Energy Agency (IRENA) entitled “Renewable Capacity Statistics 2021” more than 80 percent of all new electricity capacity added in 2020 was renewable. In contrast, total fossil fuel additions fell to 60 GW fin 2020 for the 64 GW recorded in 2019, which as the report noted stresses the continued downtrend of fossil fuel expansion.

IRENA Director-General Francesco La Camera says that “2020 marks the start of the decade of renewables” since costs continuously falling, and clean tech markets are growing. It’s an unstoppable trend but more needs to be done if the world is to achieve the Paris Agreement goals of bringing C02 emissions close to zero by 2050.”

Another IRENA report entitled “World Energy Transitions Outlook” says the world needs more technology and innovation to advance the energy transition. The world will have to increase investments in the energy transition by 30 percent to a total of $131 trillion from now to 2050

It’s a conclusion that Morroo Shino president and CEO of Marubeni Asian Power echoes. The head of the Japan-based independent power producer sees two categories that will accelerate our shift from fossil fuels to sustainable, clean power. The first category is investments in proven technologies like wind, solar, and energy storage. The second is increasing investments in rolling out new technologies that can help overcome current challenges in RE development such as solutions for baseload power.

Indeed, more investments are needed to store renewables as only geothermal energy can act as a baseload plant. Energy storage plays a crucial role in our electricity grid and will pave the way for increased renewable energy generation.

Let us keep in mind that most electricity grids virtually have no storage capabilities. In the Philippines, we have the most mature and common storage facilities, that is pumped hydropower, where two reservoirs with different elevations can store extra power. The Kalayaan pump is an example, except it was not originally intended to store renewable energy and presently provides ancillary services to the system.

Recently, San Miguel Corporation’s power arm, SMC Global Power Holdings Corp announced that it will be spending more than a billion dollars to build new battery energy storage facilities with a rated capacity of 1,000 megawatts (MW). SMC said that 31 new battery energy storage units are already underway with some storage facilities already in the advanced stages of completion.

SMC Global Power is building battery energy storage facilities to help address power quality issues. Photo c/o https://www.sanmiguel.com.ph/

The company said that the immediate goal of building the facilities is to address power quality issues as the projects will be used as a regulation reserve ancillary service by our grid operator, National Grid Corporation of the Philippines (NGCP).

Having more battery energy storage systems (BESS) bodes well for the Philippines. BESS stores energy during off-peak times while the battery supplies power during peak periods, thus providing frequency regulation and voltage control to the power system. This is over and above its use as a generation resource. Because of its nature, it can provide energy at 100% capacity factor. Think of your mobile phones – even if the charge goes down, it still delivers the same energy and capacity. Of course, eventually, you will need to recharge the battery of your phone.  This is the same what happens when batteries provide energy to the grid.

BESS is also the optimum solution to problems of storing energy from renewable sources as it can also discharge when more power is needed in central, de-central, and off-grid situations. It is exceptionally useful for our faraway provinces or off-grid areas.

Plus, battery energy storage also reduces the need for both peak generation capacity and transmission and distribution capacity upgrades. It also lowers greenhouse gas emissions.

Those are just the operational benefits of a battery energy storage system. There are also social and economic benefits to be gained. For one, the ability to shift demand to off-peak results in energy bill saving and reduces the need for dispatching expensive peaking generators during peak time. There are significant savings on fuel bills In hybrid systems where diesel generating sets operate alongside BESS and renewable energy.

And more importantly, in renewable energy, battery energy storage systems address the challenges of dealing with the intermittency of renewables. In the words of ADB senior energy specialist Atsumasa Sakai,“Mega battery energy storage systems are one technology that holds significant promise for increasing the share of renewable energy available for the grid, and for energy consumers.”

Unfortunately, we lack ancillary services in the Philippines. Data from the Department of Energy (DOE) shows that a total of 2,604 MW have been identified as required ancillary service but to date only 727 MW are deemed confirmed ancillary services.

NGCP in a recent senate hearing admitted that the grid operator could not contract firm AS reserves due to the lack of available capacity. So, SMC’s foray in BESS is beneficial in closing the gap between our grid’s needed ancillary services and available capacity in the market.

It would also be helpful if we have independent platform for ancillary services. One that’s transparent and inclusive, meaning a platform that includes all ancillary services as long as they meet safety and security requirements. NGCP had plans of having its own ancillary procurement platform but it yet has to push through.

BESS has so much to offer us both on renewable energy development and the economic and operational side. But as experts have been saying, when it comes to renewable energy development, more support is needed in the policy framework. In the case of battery energy storage, much like other developing countries, we need to adopt laws and regulations that would encourage market players to provide ancillary services, or specifically a transparent procurement platform.

Energy Transformation is What We Need

Sydney is powered by 100% renewable energy. Photo c/o https://www.energymatters.com

There’s been some good news on the renewable energy sector in recent months.

For one,  the City of Sydney, the biggest city in Australia, recently announced that is now powered by 100% renewable energy. This means that all public operations such as sports facilities, street lights, buildings, and the historic town hall in the city that’s home to 250,000 residents are running on clean energy starting July 1. The feat was made possible by a power purchase agreement (PPA) valued at $60 million, saving the city roughly half a million dollars annually over the next 10 years.

 Plus, there’s the United Kingdom (UK), which was able to generate almost half of its power needs from renewables in the first quarter of the year. The UK government data showed that renewable power made up 47% of the country’s electricity in the first three months of the year, breaking the previous set quarterly record of 39% in 2019. The substantial increase in the total renewable output of the UK was primarily driven by growth in power generated by wind farms and solar panels.

And RE sector’s record in the UK is likely to be broken in the coming years with the government’s plan for “a massive expansion of renewables as part of the UK’s green economic recovery” says Rebecca Williams, policy manager of RenwableUK, a non-profit renewable energy trade association.

Meanwhile, in the Philippines, the National Renewable Energy Board (NREB), recently reported that the renewable energy share in the power supply mix keeps on “dwindling.”

In 2015, renewable’s contribution to the supply generation mix was around 25%. RE’s share was even lower for 2016, 2017, and 2018 at 24.21%, 24.57%, and 23.38%, respectively. According to NREB Chairman Monalisa Dimalanta, renewable power’s share in 2019 was even lower at 21%.

In contrast, coal dominated the power mix, recording its highest share in 2018 at 52.05%.

As for the total installed capacity, the Philippines still is far from its target. Dimalanta notes that in 2019, RE capacity was only 5,000 megawatts (MW), more than 10,000 MW short of the 15,304 MW target by 2030.

But perhaps renewables contribution to the Philippines ’ power mix would be better in the following years. Hopefully, the government and the energy planners so engrossed in the faulty appreciation of the least cost method in power planning will finally appreciate what renewable power has to offer.

The COVID-19 has, after all, exposed the vulnerability of our energy sector. For a while, I was worried that Indonesia, the Philippines’ largest source of coal, would close its borders, thus putting our energy source at risk. Even the Energy Secretary has acknowledged that the coronavirus pandemic highlighted the need to ensure energy security by developing our indigenous resources.

Thankfully, the Indonesian government did not close its borders and stop the export of coal. But this pandemic should teach us valuable lessons, pushing us closer to clean energy transition. There’s a strong case for doing so given that experts have been saying that now is the best time to ramp up renewable energy development both locally and around the world.

For example, a policy paper, titled “Can COVID-19 spark an energy transition in the Philippines?” noted that this pandemic has provided an opportunity for the Philippines to pursue the development of more RE source more aggressively given that the lower coal generation due to the drop in power demand. 

The paper penned by Ateneo de Manila University economics department Associate Professor Majah-Leah Ravago and The University of Hawaii, Manoa economics department Professor Emeritus James Roumasset noted that “the rather dramatic fall in coal-fired generation may afford an opportunity for the Philippines to meet their renewable targets without resorting to costly subsidies.” 

The study noted that power demand dropped by 30% nationwide with coal generation decreasing from 56 to 48 %. On the other hand, generated energy from renewables remained the same with biomass and solar power generation rising slightly during our enhanced community quarantine.

Now is the best time, too to invest more in renewable energy projects says the International Renewable Energy Agency (IRENA) in its report “The Post-COVID Recovery.” It noted that the renewable energy sector has proven to be more resilient than other parts of the energy sector given the high shares of renewables continue to operate effectively. “Renewables have proven to be the most resilient energy sources throughout the current crisis. This evidence should allow governments to take immediate investment decisions and policy responses to overcome the crisis,” said Francesco La Camera, Director-General of IRENA.

The IRENA report added that accelerating the energy transition will bring substantial socio-economic benefits, specifically job creation. Aligning immediate stimulus action for the next three years, particularly from 2021 to 2023 and scaling up public and private energy spending to USD 4.5 trillion annually would boost the world economy by an additional 1.3 percent. 

This level of investment would also create 19 million more energy transition-related employment by 2030. Jobs in renewables power would grow to almost 30 million in 2030 from about 12 million in 2017. The study stressed that every one million dollars invested in renewables can provide three times more jobs than in fossil fuels.

I, along with other experts, have been arguing that the COVID-19 pandemic and the economic recession should not deter us from pursuing our clean energy transition goals. Like the experts quoted above, there’s an opportunity and a greater need for us to accelerate our shift to renewable energy.

A fast clean energy transition would reap enormous benefits for all and help in the global economic recovery. It also means ensuring energy security in the Philippines. And in the words of the IRENA President, “Now is the time to invest in a better future. Government policies and investment choices can create the necessary momentum to enact systemic change and deliver the energy transformation away from fossil fuels.”

Still Renewables in a Post COVID-19 Economy

There’s been a strong clamor for cleaner energy sources long before the COVID-19 pandemic. Securing loans from financial institutions for thermal coal power plants has become difficult in recent years, thanks to the increasingly negative public opinion and falling demand for this energy type.

Just recently, Citigroup, the third-largest bank in the United States announced that it will quit providing underwriting and advisory services as it aims to eliminate exposure to the sector entirely by 2030. “Citi recognizes that emissions from fossil fuel sectors, in particular, must be drastically reduced in the coming decade,” the bank noted.

Citi’s move comes after the similar announcements made by other large financial institutions such as Sumitomo Mitsui Banking Corporation of Japan, South Africa’s ABSA bank, and Mizuho Financial Group.

The enforcement of lockdown, shelter at home, circuit breaker, or what we refer to as the Enhanced Community Quarantine in the Philippines will result in a global economic recession. And with this, we can expect many to advocate for the halting or slowing down of clean energy transition around the world. More so since oil prices are in negative territory and there’s slow demand for coal given the lower energy consumption

But as many experts stress, the COVID-19 pandemic and its effects on the economy is not a reason to back out on commitments to shift to renewable power. On the contrary, the pandemic is a wake-up call to push forward in meeting our environmental commitments, recognizing that the development of RE will help us become more climate-resilient and aid in reviving the economy in a post-COVID 19 world.

For one, a recent report by the International Renewable Energy Agency revealed that accelerating investments in renewable energy could fuel an economic recovery from the COVID-19 pandemic by spurring the global gross domestic product (GDP) by almost $98 trillion between now and 2050. Speeding up investments in RE would provide returns of $3 to $8 for every dollar invested, too.

The landmark report entitled “Global Renewable Outlook” also noted that heavy investments renewable power would also quadruple the number of jobs in the sector over the next three decades, thus improving global health and welfare scores globally.

IRENA Director-General Francisco La Camera stressed that “Governments are facing a difficult task of bringing the health emergency under control while introducing major stimulus and recovery measures. By accelerating renewables and making the energy transition an integral part of the wider recovery, governments can achieve multiple economic and social objectives in the pursuit of a resilient future that leaves nobody behin.,”

Perhaps to better understand the transformative power of RE, we could take a look at the case of the Caribbean region as discussed in an editorial entitled “Coronavirus: The Caribbean is the First Domino to Fall, but There is Hope”

The region, unfortunately, relies solely on tourism, a volatile sector, which is at a standstill. The region’s economy is near an economic collapse that will take time to rebuild. Just how bad is the economic effects of the pandemic? In a single day, Saint Lucia alone lost 13,000 jobs or equivalent to 16% of the labor force.

renewEconomy

According to experts, a clean energy transition is key in rebuilding the economy of the Caribbean post COVID-19 . Photo c/o RenewEnergy

According to the authors, transitioning to a resilient economy via renewable power and with the help of multilateral stimulus is the only way to rebuild the economy of the Caribbean. A clean energy transition should be fast-tracked for a variety of reasons. First, the Caribbean countries have some of the highest power rates in the world because of their dependence on a centralized fossil fuel system. Second, the region is highly vulnerable to natural calamities which are becoming prevalent, thanks to climate change. And third, is the underutilized renewable energy sources. All these points to the fact that the Caribbean region has great potential to be the world’s first RE economy.

The economic recovery of the region hinges largely on affordable and sustainable power. And clean energy is the key to reducing operating costs and lowering of power rates for households and businesses. Renewable power will pave the way for new private investments outside tourism, namely in the manufacturing, agro-business, manufacturing and other high energy-consuming sectors A new resilient and green electricity infrastructure will create new jobs and stimulate economic activities, too.

A Rocky Mountain Institute (RMI) study showed that capital required to source 90% clean energy by 2030 of the 31 countries for the Caribbean will require $80 billion. In return, realizing the investment would mean a $9 billion savings annually in fuel costs and offsetting 240 million metric tons of CO2 per year.

There’s another reason why the Caribbean must develop modern energy systems, particularly micro-grid systems that allow the integration of renewables. The authors stressed: “When modern software controls and battery energy storage are added into micro-grid systems, renewables produce and store power flexibly, shifting effortlessly from heavy demand scenarios to low demand, where cheaper renewables are stretched even further.”

The case of the Caribbean region is highly similar to the Philippines. Not that we rely solely on tourism but rather, because, we are one of the countries that would benefit the same way with a quick shift to renewable power. After all, our country has one of the highest power rates in the world, we are one of the most vulnerable to natural disasters and we have underutilized renewable energy sources.

But the authors warn against arguing that fossil fuel power is the ‘cheaper option’. The sharp decline in crude oil prices, driven by oversupply and decreasing demand, will be short-lived as demand returns. It is expected that at current lows, many high-cost producers will shut down operations and some may go out of business. In a post-COVID world, with increasing global demand and a reduced number of suppliers, there will be upward pressure on oil prices.”

The same can be said of coal prices as demand has been falling even before COVID-19 was declared a pandemic. Plus, coal exports could be limited should Indonesia decide to close down their ports. As I have been saying, our reliance on fossil fuel power sources comes with a lot of risks, particularly volatility of global prices and foreign exchange fluctuations with costs being shouldered by consumers. And just like with the recommendations of the authors of the report, the Philippines should put their money on renewables to hedge against these risks. Our country would also benefit from more construction jobs brought about by higher investments in renewable power.

Evidence to debunk the myth that fossil power has the “least cost” has been available for many years, but have largely been ignored here in the Philippines. Contemplating our future with the effects of COVID-19 in mind also means securing our energy transition. Ignacio Galán, the chairman and CEO of the Spanish renewables giant, Iberdrola, which owns Scottish Power, said it best: “A green recovery is essential as we emerge from the COVID-19 crisis. The world will benefit economically, environmentally, and socially by focusing on clean energy. Aligning economic stimulus and policy packages with climate goals is crucial for a long-term viable and healthy economy.”

References:

https://stockhead.com.au/resources/nearly-130-financiers-are-now-refusing-to-back-thermal-coal/

https://www.theguardian.com/environment/2020/apr/20/green-energy-could-drive-covid-19-recovery-international-renewable-energy-agency

https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2020/Apr/IRENA_GRO_Summary_2020.pdf?la=en&hash=1F18E445B56228AF8C4893CAEF147ED0163A0E47

http://newenergyevents.com/

Here We Go Again

It’s high time that the Philippines revives plans to use nuclear power says Energy Secretary Alfonso Cusi.

During the Alliance Global Sustainability Conference, the secretary was quoted to have said: “For the past several years, the DOE, through our Nuclear Energy Program Implementing Organization, has been working under the close guidance of the International Atomic Energy Agency (IAEA) to assess the feasibility of safely and responsibly harnessing nuclear energy in the Philippines.”

Here we go again talking about nuclear energy. This isn’t the first time we are hearing government officials consider this power source. In 2018, the local government of Sulu signified interest in a modular  Nuclear Power Plant (NPP). Last year, the national government signed up with Russia’s state nuclear company, Rosatum Overseas to study the idea of constructing nuclear plants in the country.

In his recent speech, the Energy Secretary admits that we are ripe to opening the Philippines to nuclear energy again but building these plants will definitely take time. “Considering the potential of safely utilizing nuclear energy for our power needs doesn’t mean that nuclear power plants will immediately come out of the woodwork. The entire process will take time, especially since we are still at the stage of addressing the infrastructure issues needed in developing a national nuclear power program.” 

Unfortunately, it takes more than just “addressing the infrastructure issues” in developing a national nuclear power program. There’s just too much complication in the legislative and regulatory framework for nuclear power development in the Philippines. It also does not help that there are no local Human Resources or experts for this energy source.

Let us start with the problem with the regulatory framework covering nuclear power. First off, it has been 50 years since the regulatory framework for NPPs was created. It is safe to say that the “Science Act of 1958 and the Atomic Energy Regulatory Act of 1968 “or RA 5207 is already outdated. 

Under RA 5207, the Philippine Atomic Energy Commission or PAEC was tasked to regulate nuclear power development and operations. It was also in charge of licensing engineers. However, PAEC was already downgraded to the Philippine National Research Institute or PNRI, which only regulates nuclear and radioactive materials. So, which agency then will issue a license to build and operate a nuclear facility? Which agency or commission will regulate professionals tasked with building, operating and maintaining NPPs?

BNPP3

Experts who helped build and operate the BNPP are either retired or no longer around. Photo c/o http://www.Filipinotimes.net

 

Speaking of professionals, we don’t have the technical skills to build, operate and maintain nuclear plants locally. We cannot rely on experts who helped build the Bataan Power Plant as they are either retired or no longer around to help us. The original plant manager, Fidel Corea, has passed on.

The lack of qualified people for nuclear power development in the country is a major concern that even lawmakers tried to address. 

For example, the late Senator Miriam Santiago filed the House Bill 580 “Bataan Nuclear Power Plant (BNPP) Operability Act” which sought to mandate and create a training program for all technical aspects of the BNPP. The bill proposed the creation of a Nuclear Power Engineering Department under the College of Engineering at the University of the Philippines. This bill was in recognition of the fact that the Philippines does not have the manpower needed to build, run and regulate NPPs.

Having nuclear plants in the country isn’t just about building the facilities. Developing nuclear power means fixing our laws, regulations and investing in Human Resources, among other concerns. Yet, here we are again talking about nuclear power for the Philippines. 

The Energy Secretary said that a survey commissioned by his department revealed that there’s a 65 percent approval rating on the possible construction of a new NPP. Hence, “I feel that the time is ripe for intensified and informed public discussions on nuclear energy and its potential role in our energy security agenda.” 

Sure, we can have a discussion of nuclear plants in the country. But if we are to ensure the energy security of the country, then we should double our efforts in meeting our goal of having more renewable energy in our power mix instead.

Perhaps the government should be reminded of our failure in meeting our renewable energy targets. Just last year, the DOE admitted that the Philippines had failed to meet its RE targets 10 years after the Renewable Energy Act was enacted.

Just how far behind is the Philippines in its commitment to renewable energy development goals? Under the National Renewable Energy Program of 2011, the DOE was aiming to triple the renewable capacity from 5438 MW to 15,3054 MW by 2030. However, only 7000 MW were added as of the end of 2017.

Last year, National Renewable Energy Board (NREB) chairman Monalisa Dimalanta said that non-RE sources were growing faster than renewables “There are a lot more plants that were built that were using non-RE. The pie got bigger with the share of non-RE getting bigger. For RE, the increase was not proportional,” Dimalanta said.

The DOE also noted that failure to roll-out programs also contributed to the government’s failure to meet RE targets, “When we assessed the NREP and implementation, there were delays in issuances of development of support mechanism, like Renewable Portfolio Standards (RPS) on-grid and off-grid, Green Energy Option Program (GEOP) and the RE market,” DOE-Renewable Energy Management Bureau (REMB) director Mylene Capongcol said.

And this is what I don’t understand. Again and again, I’ve been saying that renewables can help us achieve energy security as we are endowed with natural resources that we can harness. We also have the expertise to develop these resources. We have the regulatory framework to guide us (although they do need a lot of improvement). Yet we are spending so much time and even resources in discussing and paving the way for nuclear energy when we should be focusing on renewable energy development. 

I say it’s high time for the government to focus on the work needed in the RE sector first before making grand plans for NPPs comeback.

https://www.philstar.com/business/2020/02/07/1990930/cusi-revives-plan-consider-nuclear-energy

Rolling Out New Programs May Not Be Necessary

It is no secret that the Philippines is heavily dependent on coal for its energy needs.

Data from the Department of Energy show that coal’s share in our country’s energy mix was 35.4% in 2017 up from 34.6% in 2016.  On the other hand, renewable energy contracted last 2018, only contributing 31.1% of the total, down from 32.5% in 2017.

Indeed, the Philippines is declining in terms of renewable energy development.

This is why it’s heartwarming to hear President Rodrigo Duterte address this issue in the last State of the Nation Address (SONA) where he ordered to fast-track the development of renewable energy resources. His exacts words were: “We recognize the urgent need to ensure the sustainability and availability of resources and the development of alternative ones. In this regard, I trust that Secretary Cusi shall fast-track also the development of renewable energy sources, and reduce dependence on the traditional energy sources such as coal.”

Naturally, the Department of Energy (DOE) responded to such call. In a statement, Energy Secretary Alfonso Cusi said that “The DOE is encouraged by the President’s comments. Indeed, his leadership will be pivotal for the DOE to implement policies and regulations that ensure the affordability, reliability, security, and sustainability of energy in the Philippines for generations to come.” 

The secretary promised to fast-track the implementation of the key renewable energy policies, namely the Renewable Portfolio Standard and the Green Energy Option. The former mandates distribution utilities to source a percentage of their power from renewable sources. The latter, on the other hand, empowers consumers to demand that their power comes from renewable sources.

The Energy secretary also said that it is looking at implementing a Green Energy Rate that will help the country to build a renewable energy portfolio of 2,000 megawatts in 10 years. There would be a ceiling rate and a green tariff rate would be auctioned among investors and developers.

Green tariffs and Green Energy Options are nothing new.  Other countries already have these programs, although the Green Tariff in other countries seems to be quite different from the one being planned by the DOE.

For example, in the United States, utility green tariff is optional programs in regulated electricity markets that are offered by utilities and by the state public utility commissions. The program lets industrial customers and large commercial clients purchase bundled renewable energy power with a special utility tariff rate.  It allows utilities to supply large industrial and commercial clients with up to 100 percent renewable power that’s either owned by the utility or sourced from another independent power producer. I’m not sure if this is the model the DOE and National Renewable Energy Board (NREB) are looking at. 

In the United Kingdom (UK), the green tariff is also available and works quite differently.  It is offered to those who want to lessen their carbon footprint with their power consumption by allowing customers to give back the same amount of power consumed back to the national grid in the form of renewable energy. Green tariff can also work by supplying the customer with either 100 percent RE or a portion of.

Clearly, Green tariffs are in place in other countries to help their RE sector prosper as well as to provide customers with cleaner option.

However, in the Philippines, rolling out new programs may not be the most urgent concern if we want our renewable energy sector to flourish. What our regulators must pay attention to are the current programs that hinder the growth of the sector. There is the Competitive Selection Process  (CSP) as it places renewable energy developers at a disadvantage and the Retail Competition and Open Access (RCOA) that fails to help local renewable energy development.

Let’s take a look at the CSP mandating energy demand must first be aggregated then later bid out by a third party. This means that the power capacity becomes large before it can be auctioned off. It is then the large quantity required by the bid that places renewable energy suppliers at a disadvantage. We have to keep in mind that most RE plants have small capacities.  Unfortunately, those with smaller capacities RE plants will be left out in the cold as a result of aggregating the power requirement before the auction.

So, will the planned Green Energy Tariff by the DOE no longer require undergoing the CSP? I am personally curious about the mechanics of this planned program intended to help develop renewable energy in the Philippines. 

Our government should indeed work harder to make renewable energy development a priority. After all, going for sustainable and green energy helps in bringing down our power rates. Renewable power will also provide us with energy security.

As I have been saying, renewable energy, unlike traditional sources of energy are not vulnerable to foreign exchange and world price fuel prices. This means consumers are spared from the consequences of ‘floating contracts’ where Filipinos pay for higher power prices when the peso falls against the dollar or when coal or oil prices in the world market spikes.

Developing renewable power bodes well for us. Traditional sources, particularly oil and coal are finite sources. What then happens when these power sources are low in supply or worse are already unavailable?

There’s also the RCOA that’s also meant to help the sector by allowing a number of customers to source their preferred service provider.  Unfortunately, only those with  750 kilowatts or higher monthly demand can be considered contestable customers, thus restricting the number of consumers that has the option of choosing their power source.

So, yes we can look at other programs to help the RE sector prosper. Unfortunately, DOE has a track record of showing its lack of appreciation on the many benefits of renewable power for the Filipino consumers. 

We have to keep in mind that sometimes new programs, entities or rules can wait. They may not even be necessary. All we have to do is to simply review current regulations and practices rather than find new ones. And if we as a nation want to heed the orders of the President to develop cleaner and sustainable sources of power, then we urgently need to review our current regulations. 

References:

https://www.epa.gov/greenpower/utility-green-tariffs

https://www.comparethemarket.com/energy/information/energy-tariffs-explained/

Coal plants’ share in 2017 energy mix expands to over 35%

Race Against The Clock

 

A study revealed that 77 percent of the major cities in the world will experience drastic changes in climate conditions by 2050. I won’t be around by then but my grandchildren will be around. So this is important to me. 

Crowther Lab, a research group based in Switzerland studied the impact on 250 major cities’ temperature if the world’s temperature reaches 2 degree Celsius. The study is the first global analysis of the likely changes in climate conditions in major cities due to global warming.

The researchers found out that a fifth of the world’s cities will see unprecedented climate changes including intense dry and rainy seasons. These would include Singapore, Kuala Lumpur, Jakarta, Madrid, Seattle, London, and Moscow to name a few.

Just how drastic will the changes be? The study says summers and winters in Europe will be warmer with 3.5 degree Celsius to 4.7 degree Celsius average increases. Another way of imagining it is by measuring the temperature change, which is by thinking that a city would shift by 620 miles further south.

Naturally, the cities farthest away from the equator will experience the most changes in the average temperature. But those near the equator or in the tropics such as Kuala Lumpur, Singapore and Jakarta will feel the strongest impacts of climate change. 

These changes don’t bode well for major cities says Jean Francis-Bastin, the lead author of the report. “It is a change in climate conditions that is likely to increase the risk of flooding and extreme drought,” said Francis-Bastin. 

The Philippines and not just Manila will be greatly affected by climate change, too.

The Global Peace Index 2019, released last June showed that the Philippines is the country most susceptible to hazards due to climate change.

The study revealed that 47 percent of our country’s population is located in areas highly exposed to climate hazards such as tropical cyclones, tsunami, floods, and drought.

Our Southeast Asia neighbors such as Bangladesh, Myanmar, Indonesia also made it to the list of the countries being at the highest risk because of climate change.

Manila also ranked seventh with most risk to a single hazard while our neighbor, Vietnam landed the first spot for this category.

Indeed, the Philippines and the rest of the world are constantly reminded to take serious efforts in limiting the effects of climate change. And we need to act fast as stressed by Francis-Bastin: “We definitely and very quickly need to change the way we are living on the planet. Otherwise, we are just going to have more and more droughts, flooding and extreme events.”.

Fortunately, nations responded to these warnings as early as 2015 by committing to limit global warming to just 1.5 c in the 2015 Paris Climate Change accord. But how is the world faring?

Unfortunately, the world’s temperature continues to increase. In 2018, the world recorded its fourth warmest year on record. 

But this is not to say that nations are not making any progress at all in decarbonizing the world. On the contrary, data show increases in investments in renewable energy and rapid developments in the use of clean power around the world. 

For example, the Bloomberg New Energy Finance (BNEF) showed that 2018 was the fifth consecutive year that investments in renewable energy exceeded the $300 billion mark.

Similarly, the Business Renewables Center of Rocky Mountain Institute (RMI) also showed that in 2018, the United States renewables market has almost doubled its figure of corporate off-site deals since 2015

As most know, shifting to renewable power is one of the best ways to help limit the effects of climate change. But are these investments and developments enough? 

Apparently not, says the United Nations Development Goals report 2019 after tagging climate change as “the defining issue of our time and the greatest challenge to sustainable development.”

The UN Under-Secretary-General for Economic and Social Affairs, Liu Zhenmin, in his introduction to the report stressed that cutting greenhouse gas emissions is the most crucial task to mitigate the effects of climate change. He noted that “As we are already seeing, the compounded effects will be catastrophic and irreversible: increasing ocean acidification, coastal erosion, extreme weather conditions, the frequency and severity of natural disasters, continuing land degradation, loss of vital species and the collapse of ecosystems.”

Unfortunately, current scenarios and actions to help the environment are not enough. The world may be seeing an increase in renewable investments but the  UN report emphasized that investments in fossil fuels still outpaced the $781billion recorded in 2016 as the figure is significantly higher than the  $332.1 billion investments in clean power in 2018.

Indeed, we are racing against time if we want to save our environment for the future generations. Drastic actions must be taken. The UN report emphasized it best by saying “Unprecedented changes in all aspects of society will be required to avoid the worst effects of climate change.”

References:

https://www.channelnewsasia.com/news/singapore/singapore-kuala-lumpur-unprecedented-climate-change-2050-11710274

https://solarindustrymag.com/report-2018-a-record-breaking-year-for-corporate-renewable-energy-deals/

https://about.bnef.com/blog/clean-energy-investment-exceeded-300-billion-2018

https://news.abs-cbn.com/spotlight/06/15/19/country-most-threatened-by-climate-change-study-says-its-philippines