Clarity sought on ‘green’ energy project economics

While financing is readily available for green energy projects in the Philippines, the industry requires a clearer pathway to profitability to strengthen the investment argument, according to ACEN Corp.

“I’m a little surprised by the assumption that climate financing in general is not available, right? Because there is a lot, certainly,” Miguel de Jesus, ACEN managing director and chief operations officer, said at the BusinessWorld Economic Forum: Unlocking Philippines’ Potential.

“I think a lot… has to do with getting the economics right on how to enable these energy transition opportunities,” he added.

Mr. De Jesus said developers and their financial backers have yet to see clarity on the revenue streams to be generated by energy-transition projects.

“At the end of the day, the banks want certainty of payment, right? And what’s important therefore is to ensure that (these projects have robust) revenue stream,” he said.

ACEN, the listed energy platform of the Ayala group, has initiated the early retirement of the 246-megawatt (MW) South Luzon Thermal Energy Corp., a coal-fired power complex.

The company has a target of scaling up its renewable energy capacity to 20 gigawatts 

(GW) by 2030.

Vincent Martin C. Villegas, senior vice-president and chief revenue officer of First Gen Corp., said the liberalization of foreign ownership rules will help accelerate the development of renewables.

“We can now have 100% foreign investors, which is a big thing,” he said.

Mr. Villegas noted the high levels of risk in geothermal exploration, where First Gen, through its subsidiary Energy Development Corp., is the industry leader.

Mr. Villegas said customers and generation companies are gravitating towards clean energy, adding: “It will take some time. It’s going to be a journey. But it’s a collaboration… That’s going to be an effort from across the entire country. But we’re quite hopeful. If you look at the targets, we think they are achievable,” he said.

First Gen, the power generation arm of the Lopez group, controls 3,668 MW in capacity from its portfolio of geothermal, wind, hydro, solar energy, and natural gas plants.

The company has set a capacity target of 13 GW by 2030.

Monalisa C. Dimalanta, chairperson and chief executive officer of the Energy Regulatory Commission (ERC), said the industry is moving on from the old model where projects were deemed bankable if they signed up one major offtaker.

“This is where government agencies like ourselves and the DoE (Department of Energy) are helping out, in recalibrating the narrative for the financing sector,” Ms. Dimalanta said.

She said various cash flows can now be tapped by the developer, and not necessarily the traditional streams provided by a distribution utility.

Ms. Dimalanta said other potential revenue streams have been liberalized, such as selling to contestable customers under the Retail Competition and Open Access scheme, and participating in the Green Energy Auction Program.

Energy Undersecretary Rowena Cristina L. Guevara said the DoE is pursuing discussions with the Department of Finance (DoF) on initiatives like geothermal de-risking, total electrification, energy efficiency and conservation, and the hybridization program of the National Power Corp.

She said the DoE is in “advanced discussions” with the Asian Development Bank (ADB) to obtain support for these programs next year.

Ms. Guevara said the energy transition should be “calculated and calibrated,” adding: “We don’t want to miss out on economic growth by suddenly turning off our coal-fired power plants.”

Ms. Guevara said that the DoE is coming up with a coal transition policy, having received a presidential directive to ensure the Philippines can deliver on its Nationally Determined Contribution under the Paris agreement.

The Philippines hopes to increase the share of renewable energy in its power generation mix to 35% by 2030 and 50% by 2040.

Source: Business World

SEC: Sustainability a long-term strategy

An official of the Securities and Exchange Commission (SEC) has acknowledged the importance of environmental, social and governance (ESG) principles in corporate strategy.

Speaking at the 2nd Philippine Sustainability Now Forum last week, SEC Commissioner Javey Paul Francisco said that as the overseer of the Philippine corporate sector, the SEC promotes sustainability vis-à-vis the pressing needs for climate action, renewable business solutions and green workforce development.

"At the SEC, we believe that true progress toward a sustainable future is achieved not in leaps and bounds, but through cultivating consistent sustainable habits and embedding them within our organizational systems," Francisco said, noting that ESG is not just a regulatory requirement but a strategic approach to ensuring long-term competitiveness and resilience in a rapidly changing global market.

The SEC has made ESG integration a core part of its regulatory and advocacy work, as contained in the 2019 Sustainability Reporting Guidelines for Publicly Listed Companies.

It also extends these initiatives to small and medium enterprises through the SMILEES road show, an educational campaign on ESG practices tailored for smaller businesses.

The corporate regulator is likewise pushing for the development of the Philippine Sustainable Finance Taxonomy Guidelines, which aims to provide clear, credible standards for identifying and promoting sustainable investments in the country.

The forum was organized by the Italian Chamber of Commerce in the Philippines Inc.

Source: Manila Times

Ultra-Sustainable Building Technologies Are Hitting the Mainstream

Trondheim, Norway, a city of 180,000 just 200 miles from the Arctic Circle on the coast of the frigid Norwegian Sea, hardly seems an ideal location for harvesting energy from the sun and surrounding environment. But a new 200,000-square-foot office building there is producing nearly half a million kilowatt-hours of renewable energy per year—twice as much as the building uses. The extra energy is powering other nearby buildings and charging electric cars, buses and boats throughout the city.

Highly sustainable buildings have been popping up around the U.S. and the world over the past decade. But now a confluence of new technologies and improving economics, as well as climate-change-inspired government regulation, are leading to the next wave in big construction: ultra-sustainable buildings. This new generation of green buildings is hitting environmental goals that would have seemed inconceivable just ten years ago—in some cases not just avoiding all harm to the environment, but actually improving it, leading the communities and cities around these buildings down greener paths.

These futuristic-seeming buildings promise to close a yawning gap in the world's efforts to slow climate change and mitigate its harms. About 40 percent of the world's greenhouse gas emissions come from the heating, cooling and lighting of buildings—and that's not including substantial emissions from the construction of conventional buildings. Sharply curtailing these emissions is an essential part of fighting climate change.

To appreciate what goes into making an ultra-sustainable building, consider what it took to build  the one in Trondheim. The product of a collaboration between five Norwegian real-estate-industry organizations, the plans called for zero-emissions energy to heat, cool and otherwise power the structure. To get that energy, the developers built solar panels into the building's 31,000 square feet of exterior skin and pumped in what scant heat could be wrung from the nearby ocean waters. The result was the "Powerhouse Brattørkaia" building, finished in 2019, and now a model of how buildings can push out more clean energy than they consume.

Another ultra-sustainable building that's boosting community energy is the PAE Living Building in Portland, Oregon, designed by ZGF Architects as an office building. It relies on insulation and ventilation to reduce energy consumption by 80 percent compared to typical office buildings, and collects and treats rainwater to meet the building's water needs. Because of limited space for solar panels, it couldn't generate all of its energy needs onsite. To make up the difference, it paid a nearby low-income housing project to install solar panels that generate enough electricity to power both the building and the housing project. "It makes sense to look at energy production from a regional point of view, rather than just in each individual building alone," says Kathy Berg, a principal at ZGF, which has been involved in a number of ultra-sustainable projects.

The motivation to use ultra-sustainable ideas in new commercial development—as well as to retrofit existing buildings to make them more sustainable—is economics. The costs of green technologies have been rapidly dropping. Solar energy, in particular, is becoming a better and better deal, falling in price about ten percent a year, according to the U.S. Department of Energy. "Renewable energy is becoming the smarter choice economically," says David Orr, a professor emeritus at Oberlin College and one of the pioneers of ultra-sustainable building design. "Anyone who buys a building that isn't solar-powered is just wasting their money." Regulators at local, state and federal levels are also demanding greener buildings.

Powerhouse BrattørkaiaCourtesy of Snøhetta

Making a building "net energy positive"—that is, capable of producing more renewable energy than it uses—is getting easier thanks in part to big improvements in solar panels. Panels today produce about 50 percent more electricity per square foot as they did ten years ago, and experimental versions are already doubling today's output. Some new rooftop panels further boost output by capturing reflected light from the roof itself, as well as direct sunlight.

Thanks to advances in electronics that make solar-energy-generating components thinner and lighter, as well as materials innovations that can hide the components behind attractive, translucent coatings, these components can now be built into the panels that make up a building's outer skin, and they can be retrofitted into older buildings. In the German town of Bochum, a 12-unit apartment building that dates back to the 1930s was updated with solar skin panels that now supply the building's 45-kilowatt-hour-per-square-foot electricity consumption—with plenty of energy left over to pump back into the local grid.

Another rapidly improving energy-gathering technology is heat pumps, which enlist a circulating gas that is expanded and compressed in a way that grabs heat from outside air, soil or water—even if it's cold—and releases it indoors. (Reversing the process provides cool air during the summer.) Heat pumps had long been useless in colder regions, but the best ones today rely on new types of gases and more powerful compressors to work in below-zero temperatures. Because they run on electricity from the grid, rather than from burning natural gas, they save on emissions, and they are typically four times more efficient than conventional electric heat. Boston University's new computing and data science center, a 300-foot-tall, 345,000-square-foot tower that opened last year, depends entirely on heat pumps to get through the city's often-brutal winters.

Producing energy is only half the recipe for ultra-sustainability in new buildings or to bring higher levels of sustainability to existing buildings, notes ZGF's Berg. "Energy generation is really the second step," she says. "The first step is to reduce the amount of energy the building needs." For starters, that means state-of-the-art insulation to keep heat in or out, and efficient LED lighting—steps that are now the rule in new buildings and being retrofitted into many older ones. Further reductions are being made with special design features for managing sunlight and ventilation. For example, these features were instrumental in achieving the low energy needs of the new California Air Resources Board headquarters building designed by ZGF. To maintain comfortable indoor temperatures, motorized shades regulate sunlight entering the building through its giant skylights, and fans move air from cooler to warmer areas. To go even further, notes Berg, some buildings are now being designed to capture prevailing winds as natural ventilation systems.

Powerhouse BrattørkaiaCourtesy of Snøhetta

Electronic smarts are playing an increasingly large role in ultra-sustainability, too, both in a wide range of new buildings and in updating older buildings. Often at the heart of smart building systems are sensors that track where people are in a building—and where they aren't. "The heating and cooling systems can find out there's nobody on the fourth floor, and dramatically cut back on the heated or cooled air that's being sent there, as well as on the lighting," says Katie McGinty, chief sustainability officer at Johnson Controls, which produces smart building systems. "Cars today are computers on wheels, but until now too little of that digitization has made its way into buildings."

In addition, smart buildings, whether old or new, can monitor minute-to-minute price changes on the electric power grid, and adjust heating and cooling timing to take advantage of dips and spikes in the price. As more building occupants plug in electric vehicles, notes McGinty, the buildings can even look for opportunities to sell some of the available battery power in the EVs back to the grid at peak prices, recharging them when prices drop. And if there's solar power onsite, a building can work that into the mix, too, storing some of the solar electricity in batteries when it's sunny, and using it or selling it to the grid when it's cloudy or prices go back up.

Because adding in highly efficient solar panels, heat pumps and insulation enables new and retrofitted buildings to generate more green energy than they consume, they're in a position to provide the excess to others. Many already do that by selling the excess to the grid, helping the grid reach its own renewable energy goals. Increasingly, buildings are striking deals that enable more direct green-energy sharing with neighboring buildings and facilities, as the Powerhouse building in Trondheim did.

As prices continue to fall, ultra-sustainability measures are expected to continue to gain ground among developers of all sizes and budgets, making buildings more of a climate asset than a liability.

Source: Newsweek