Currently at the fingertips of consumers are technologies and suite of solutions that must satiate their changing preferences on energy usage – thanks to the government-underpinned policy enforcements that are really putting ‘end-users at the head of the table’ when it comes to decisions in choosing their preferred electricity supplier.
And to the power industry players, it comes as a new challenge to them how to convince consumers to select the relevant solutions -- not just to meet their electricity service requirements, but for them to contribute to the lofty goal of easing off climate change risks and preserving planet Earth.
“Choice” is a slippery term, but for consumers who are now exercising this right on their patronage of electricity suppliers either through the prevailing Retail Competition and Open Access (RCOA) policy or the soon-to-flourish Green Energy Option Program (GEOP) for those wanting to source their power supply from renewable energy (RE) resources – this fundamentally redounds to cost savings, better service and embracing environment-friendly options in meeting their energy needs.
One industry player making headway in the country’s energy transition and in dangling sustainable solutions to Filipino consumers via RCOA and GEOP is Energy Development Corporation (EDC), the RE investment arm of the Lopez conglomerate, which is not just the country’s biggest geothermal energy producer but also one of the world’s gigantic players on such sphere of power capacity installations.
Shifting trends and game-change for consumers
The paralyzing dilemma of global warming has been fanning the flames for much-needed transition in the energy sector globally, and this is the same message and quest cascading into Philippine shores.
Lopez-led EDC has captured and embraced that ‘energy transition precept’ powerfully and has likewise been propagating that inescapable game-change in all the areas of its operations; and in its offer of services to consumers.
“Shifting to EDC’s geothermal 24/7 will enable contestable customers to become one of the company’s regenerative partners that not only powers their business through clean, reliable, cost-competitive RE, but also enjoys value added services that include participation in EDC’s environmental and regenerative projects,” Marvin Bailon, EDC’s head of Business Development, Trading and Marketing, has noted.
Contestable customers, in this case, are end-users who can already directly negotiate and sign up for contracts with their preferred electricity suppliers based on the power usage threshold set by regulators – which for RCOA is currently set at 500 kilowatts (kW); and for RE’s GEOP, it will be at 100kW.
Bailon explained that “similar to telco customers, qualified power consumers now have the power of choice for their source and provider of electricity that will have huge impact not only on their business or institution, but also on our planet and the society.”
He therefore enthused that as consumers exercise their ‘power of choice’, “they now have the ability to personally take a stand for the environment, to reduce their carbon footprint as their contribution to fighting climate change, to establish their reputation or brand as a model not only for sustainability but for the next best practice of regenerative development by simply choosing where to buy electricity.”
In tandem with the GEOP, the RE sector where geothermal energy is a part of, can also lean on the implementation of the Renewable Portfolio Standards (RPS) for business longevity because the policy provides a market space for them in the country’s re-calibrated energy mix.
As mandated, the RPS edict requires all electric and distribution utilities (DUs) to increase their use of RE in their supply portfolio by 1.0-percent every year starting year 2020 until 2030.
With that policy prescription, Bailon asserted “this definitely benefits not only the utilities but even their own customers who are able to lessen their carbon footprint since a portion of their power comes from low carbon renewables.”
And to aptly prepare for that transformative phase in the power sector, he said “we see geothermal players gearing up to become retail-ready and be able to offer the best power option for the market.”
He similarly vouched that “being a reliable round-the-clock source of clean, renewable energy that has minimal carbon emissions, this makes geothermal definitely better than non-RE sources of power,” adding that “geothermal energy is indigenous and is not susceptible to external fluctuations of fuel supply and prices.”
Geothermal energy at tipping point?
With slowdown in exploration and developments in the geothermal industry in recent years, it appears that the sector seems teetering into its ‘sunset’ phase.
But even the Department of Energy (DOE) is categorically stating that it will not allow that fate for the sector – at least not yet, without giving it a strapping fighting chance when it comes to enticing fresh flow of investments in the sector.
As the government sees it, geothermal energy in the Philippines might have been at its ‘tipping point’, but there’s still a big chance for it to be brought back into its glory days when the country was known as the second biggest geothermal energy producer in the world.
Energy Secretary Alfonso G. Cusi indicated that the slithering ranking of the Philippines as a geothermal energy producer is a ‘regretful development’, but he is hopeful that investments in the sector can still be revitalized as both industry and government discuss viable incentives and feasible policies for fresh capital to flow in.
The energy chief opined that “geothermal power plants may be expensive to develop and may take longer time to build, but it would be able to generate the kind of power that will help sustain energy security of the Philippines in the long term.”
And as had already been proven in the past, the country can reign globally in geothermal energy production, hence, in Cusi’s view, the Philippines can still “regain (its) previous worldwide standing as a top geothermal developer.”
Bailon echoed the energy secretary’s view, with him stressing that “in light of all these developments shaping the industry toward RE sources, the challenge for the geothermal sector is to build and develop more capacity.”
He expounded that “geothermal development takes longer than solar and perhaps wind, but when developed, it provides stable and reliable energy.”
Bailon nevertheless acknowledged the often-risky hurdles that geothermal project developers are confronted with -- that aside from the need for hefty upfront capital, there are barriers on physical access to sites as well as connection to power grids.
“Since the geothermal resource is normally in remote and mountainous areas, development is challenged by security, lack of infrastructure leading to the resource, and distance to transmission line connections. Should these basic conditions are supported and resolved, geothermal development can easily break out even more,” the EDC executive reckoned.
‘Regenerative’ approach in geothermal development
With its auspicious four-decade-and-a-half history in geothermal energy, EDC’s business approach is not just holding on tightly to ‘sustainability’, but it goes the extra mile, by also embracing ‘regenerative strategy’ on its project developments.
“Geothermal energy, when harnessed prudently, can be sustained indefinitely. This is shown by our steamfields and power plants that we have already been operating for 45 years – and can continue to produce energy for many more decades to come,” Bailon pointed out.
The company’s strategy, he shared, is straightforward. “This requires a deep understanding of the geothermal resource. If not harnessed prudently and responsibly, geothermal resource can drastically deplete,” with him citing that “this is seen in some geothermal reservoirs which have been extracted heavily or investments to preserve and regenerate the resource have not been made.”
Taking cue from that, he propounded that “geothermal concessions should only be granted to groups that not only possess proven technical and financial capability, but equally important, they must have the capacity and the commitment to be responsible stewards of the resource.”
Bailon also imparted that “geothermal energy comes hand in hand with lush forests to recharge the geothermal reservoir,” hence, he emphasized that “by maintaining and even regenerating our forests, we further enhance our geothermal reservoirs.”
In the deeper core of the Lopez group, he conveyed that resource regeneration is not just a part of their business game plan but it thrives as a virtuous mission for the company and the entire conglomerate that they have been planting, growing and maintaining lush forests in their geothermal watersheds – and these endeavors to-date already comprise about 1.0-percent of the country’s total land area.
Bailon chronicled that since 2008, EDC through the initiative of its Chairman Emeritus Oscar M. Lopez “leveled up to its reforestation program when it launched its BINHI greening legacy program to bridge forest gaps and bring back to abundance 96 of our threatened Philippine native tree species.” Since then, the company already reforested close to 10,000 hectares in geothermal areas, with over 6.0 million BINHI seedlings planted.
“With EDC’s massive reforestation efforts through our BINHI program, EDC has become a carbon negative company – meaning, the minimal CO2 (carbon dioxide) we produce is offset by all the CO2 absorbed by our reforestation efforts,” the company executive said.
EDC’s carbon emissions had been placed at 865,652 tonnes equivalent, and so far, it was able to avoid about 1.8 million tonnes of CO2 each year, based on its 0.1 tCO2/MWh (megawatt-hour) carbon intensity; and it was also able to absorb 1.5 million tonnes of CO2 equivalent through the forest lands inside its geothermal reservations.
“As the group’s 100% renewable energy arm, EDC and its main product – geothermal, is at the heart of the Lopez group’s mission/purpose, which is to forge collaborative pathways for a decarbonized and regenerative future,” Bailon stressed.
The overarching goal, he said, “is to partner with like-minded companies, organizations and individuals that share a genuine commitment to inclusive growth and environmental restoration so we can all go beyond sustainability and do more together. The mission is not a one-company and a one-conglomerate job since it’s something that we cannot do on our own.”