Meralco’s eSakay: Gradually melting the 'ICE' with EVs

By MYRNA M. VELASCO

Within this month, the planet’s warming temperatures will be in the spotlight again – as global economic and political leaders, scientists as well as the other alpha geeks of ‘climate change diplomacy’ will gather anew for fresh round of talks at the 27th Conference of the Parties (COP27) in Egypt.

Through years of handwringing negotiations and debates on climate change risks, several anchors were instituted so the world can limit temperature rise to the targeted 1.5 degrees C – and one of them is driving electric mobility (e-mobility) into the home front of “resilient multilateralism” – that entails surviving an era when the world is tormented with social and geoeconomic troubles of war, pandemic and a threatening economic recession.

For the Philippines, its acceleration into the electric vehicle (EV) route is still at its choppy start – and reversing the trends on the Filipino consumers’ addiction to gas-powered vehicles may take years or decades more to pull off.

Nevertheless, the industry players are seeing glimmer of hope in the recent passage of the Electric Vehicle Industry Development Act (EVIDA) or Republic Act 11697, a law seen as the impetus for massive capital flow in the nascent EV sector.

One company that is taking the driver’s seat to the e-mobility highway is eSakay, a subsidiary of Manila Electric Company (Meralco), which had already cast its grand plan toward gradually melting the internal combustion engine (ICE) vehicles in the transportation marketplace – and this investment plunge has been integrated into the conglomerate’s sustainability strategy.

And while ‘sustainability’ proved to be a slippery term and is now the ‘most abused catchword’ in the corporate world, eSakay is firmly proving that its investment game plan is backed by tangible figures and accomplishments.

Infrastructure buildup

Raymond B. Ravelo, president and CEO of eSakay and also the Chief Sustainability Officer of Meralco, indicated that at this stage, the company is taking electric mobility shift closer to home -- because its initial deployments of EVs cover the chain of operations of its Meralco’s business centers and sector-offices.

The initial target is to convert close to 130 engine-powered service vehicles of Meralco business centers and sector-offices into EVs; and that shall account for 6.0 to 7.0-percent electrification of its transport fleets, a take-off point that will even surpass the 5.0-percent mandate under the law.

“At Meralco, we are in the process of completing the deployment of electric vehicles in our sector-offices and business centers – these are motorcycles, cars, vans and pick-ups. If you look at Metro Manila business centers, all the service vehicles will be electric as we complete the deployment,” he said.

The power utility company started early on its e-mobility journey – it has already been traversing that road even before EVIDA was passed; hence, it is now ahead in the race on ramping up its EV rollout.

By far, its initiatives are proofs-of concept and have been showing the way to other industry players that the EV pathway can be traversed even without depending on heavy financial subsidies or cost rebates from government.

In a country afflicted with budget deficit predicaments, the fiscal and non-fiscal incentives being extended as State succor to investments are not really that much compared to market-peers in the Asian region – thus, Philippine EV players must place their bets more on ‘competitive forces’ and ‘whetted customer appetite’ taking over the market eventually, because that is the only practicable way for the EV industry to ultimately stand on its own.

In 2019 – or three years prior to the passage of the EVIDA law, eSakay already started operating its fully-franchised electric jeepneys (e-jeepneys), a fare-based operation of 15 fleets plying the Makati-Mandaluyong route.

Meralco’s eSakay is certainly not stopping on its EV odyssey at this point, with Ravelo noting that “we’re building a long-term sustainability strategy – and that’s divided up into many sections – renewables and part of it is the green mobility or the deployment of electric vehicles. Our goal is to hit 25% in 2030 – 25% of our fleets ideally would be EVs in about 9 years, which will be a quarter of our vehicles.”

The energy firm currently has more than 2,200 vehicles; and the planned EV conversion will cover more than 550 fleets – and that will be accomplished via collaboration with partners, including foreign firms that are currently supplying the EVs.

At its infancy phase, Ravelo acknowledged that the industry has yet to mold its foundation of strength in the investment space – and to continue down this path will mean crushing major roadblocks when it comes to ratcheting up capital flow – primarily the much-needed buildup of charging infrastructure; as well as managing concerns on disposal of used EV batteries, concern on the energy use of these electrified vehicles; the scant raw material conundrum for EV batteries due to alleged human rights violations on cobalt mining; plus the current dilemma on long waitlists of EV orders.

More broadly, he also cited the need for more intensified information and education campaign so consumers can be pragmatically oriented why an EV shift is highly beneficial not just to chip away from weekly price hikes at petroleum pumps; but more importantly in preserving Planet Earth for the next generations.

For now, Ravelo emphasized that “it is still very difficult to generate a business case for EV charging stations because there are not too many electric vehicles out there yet. It’s really regulation that will drive the propagation of EV charging infrastructure, because if you expect businesses or entrepreneurs to do it, they will probably not.”

Yet with the implementation of the EVIDA law and its implementing rules and regulations (IRR) as well as the government concretizing its own commitment of 5.0% electrification of its fleets, these are the factors expected to drive EV revolution faster in the Philippines.

In other countries, the rollout of EV chargers had been well-calculated within city and regional thoroughfares; while many electric car owners similarly opted to have chargers installed in their own homes. In some markets, EV charger-offers to customers are integrated with their solar rooftop installation packages.

The ‘zero sum game’ in CO2 emissions

Behind the façade of green mobility is the worrying precept that the fuel being used in manufacturing the array of EV fleets and even the deployed EV chargers could be fossil fuel-fired power facilities, therefore, there is that troubling premise that the carbon dioxide (CO2) emissions of the EV sector may just be ending up to be a ‘zero sum-game’ when it comes to the world’s global warming battle.

Ravelo says he disagrees with that narrative – especially so since the Philippines is now cementing its all-inclusive ‘energy transition agenda’ – not just on greening its power grids or on EV deployments, but also in expanding energy efficiency initiatives; then scaling up digitalization and tech innovations underpinned by artificial intelligence (AI) and even robotics.

“On the generation side, the RE is fighting for its own space in the world, and that’s driven by economics, performance and regulation. In the Philippines, the regulation is driven by the RPS (Renewable Portfolio Standards), so that will stimulate more investments in RE. On the EV side, it is also fighting its own battle to get more prominence in market proliferation. At some point, both will come to a head where both will become economically viable – and that’s when we will see convergence of these two business models providing a full chain of green solutions,” the Meralco executive stressed.

So far, recent studies have shown that the current pace of EV rollouts still draw electricity usage from fossil fuel-fired power plants, although the carbon emissions had been established to be less compared to petroleum-fed vehicles.

Undoubtedly, the country’s EV journey still has multiple barriers to overcome, but many stakeholders are optimistically hoping that this fledgling industry can successfully get to its destination.