By Myrna M. Velasco
The Philippines and seven other countries in the region have formalized “collaboration” for an Asian platform in the promotion of energy efficiency initiatives – including investment hunting as well as shoring up financing tracks for projects.
The countries in the established platform involved energy service companies (ESCOs) from China, Japan, India, South Korea, Malaysia, Singapore and Taiwan – and together with the Philippines, they essentially pioneered the setting up of the Asia Pacific ESCO Industry Alliance (APEIA).
“All eight (8) ESCO associations recognize the need to create a regional ESCO industry platform, which will promote ESCO industries, encourage knowledge-sharing of ESCO industry players and boost network for finding potential investors, funding and technology providers,” a statement from the Philippine Energy Efficiency (PE2) Alliance has noted.
As expounded by PE2 President Alexander Ablaza, the newly formed regional ESCO alliance will be paramount in bids to “mobilize a significant share of the US$16.5 trillion in off-balance sheet capital flows to bridge the global US$24.5-trillion energy efficiency capital requirements through 2040.”
He specified that “APEIA shall be a platform for ESCO associations across the Asia Pacific for sharing knowledge and experience, building capacity and ultimately potentially mobilizing energy efficiency projects and financing.”
Of the aggregate ESCO market potential, it was noted that more than 60-percent had been generated from Asian markets, as stated in the 2017 Energy Efficiency Market Report of the International Energy Agency.
The regional ESCO coalition is seen of utmost importance, with Ablaza noting that “the center of gravity of the global ESCO market has shifted to Asia.
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He further explained that “the ESCO business model is a clearly demonstrated modality to mobilize energy efficiency capital in developing and developed markets and should be further mainstreamed in the more nascent ESCO markets in the Asia Pacific region.”
Through this newly formed bloc, it was emphasized that member-countries would gain leverage on information exchange relative to: energy efficiency potential and adoption in building, manufacturing and service sectors; the best practices when it comes to ESCO-based technologies as well as finance and contracting; and on the climate change agenda propelled by the Paris agreement.
The alliance is also targeting to “build technical capacities in start-up ESCO markets by organizing and conducting training programs,” that will then lead to the certification of energy managers, measurement and verification professionals and other ESCO specialists.
Another overarching aim of the alliance is to “facilitate carbon asset management projects, carbon emission reduction and energy savings offset trading for renewable energy and energy efficiency companies.
Participant-markets will also “facilitate and encourage research and development, test-bedding and pilot-testing of technologies in energy efficiency.”
On the policy side, the alliance will pursue engagements with “relevant government agencies, development agencies, international financial institutions and industry associations to mobilize grant, debt capital, knowledge and other in-kind resources.”