Thursday, June 24, 2021

Resilience of renewables a sign for more investments

THE Covid-19 pandemic has resulted in adverse impacts on the global citizenry and economy. However, it has also strengthened the calls for investing in the health of the planet and the people, two key components of sustainable development.

One of the biggest indicators of the environmental impacts of the Covid-19 lockdown is the reduction in greenhouse gas (GHG) emissions. The global carbon dioxide emissions are projected to decrease by 8 percent this year, according to the International Energy Agency. This decrease is what is needed every year until 2030 to limit global warming to 1.5 degrees Celsius, which is considered a threshold for irreversible climate change by many experts.

With restrictions in economic activities, the use of fossil fuels has significantly fallen off. Before Covid-19, global demand for coal was already decreasing due to competition from cleaner energy sources and the higher risk of becoming stranded assets. But the onset of the pandemic has caused an eight-percent decrease in demand compared to last year’s levels, and could result in a similar reduction for 2020. Similarly, reduced demand in transport, power, and industrial sectors would lead to a lower usage of other fossil fuels such as oil and natural gas.

Among different fuel types, only renewable energy (RE) demand has been resilient. With priority given to renewables in many power grids and the addition of more wind and solar facilities going online, globalRE generation would increase by around 1 percent in 2020.

Furthermore, the IEA estimates that low-carbon electricity would contribute up to 40 percent of global power generation. Wind and solar’s share would be up to 9 percent or double from 2015 levels, a testament to the rapid growth of RE.

Similar impacts are expected for the Philippines. While contributing less than 1 percent of the global GHG emissions, its status as a high-risk nation to climate change obliges it to develop a low-emissions path to development. Aside from the projected lower GHG emissions, the decline in fossil fuel use has already resulted in cleaner air, especially with restrictions in transportation in urban areas.

Sustaining the momentum

The Covid-19 pandemic has given the world a clear look at the current state of our energy systems and a glimpse of their resilience to future crises. The challenge now lies in translating these gains into a more sustainable design, especially as the global economy gradually reopens. While the importance of RE development is no secret in the Philippines or elsewhere, the pandemic amplified its urgency. Revitalizing economies must include a shift in investments from fossil fuels to RE, which is not just about increasing the resilience of energy systems, but a matter of mitigating climate change and its harmful impacts.

Investments in cleaner energy could produce economic returns up to eightfold by 2050, including avoided social and health costs from reduced air pollution and climate change impacts. More financial institutions are also divesting from fossil fuels, especially coal, in recognition of price instability and its high risk of becoming stranded assets. It also creates more secure jobs, albeit not without a just transition plan for those coming from the fossil fuel sector.

Despite slow progress, the Philippines still has tremendous potential for RE development. While coal consumption for primary energy generation in 2018 nearly tripled from 2008 levels, no new coal-fired power plant has entered construction since that year. Much of its renewable energy potential, especially wind and solar remains untapped since the Renewable Energy Act, which has not even been fully implemented since being passed more than a decade ago.

The Philippine government, mainly through the Department of Energy, needs to enact policy reforms to remove the barriers to RE development, which can help attract more investments to the sector. Bureaucratic reforms such as streamlining procedures for RE projects must be implemented. Existing incentive schemes for RE such as the feed-in-tariff needs to be reviewed as well. The archipelagic nature of the Philippines necessitates RE integration in off-grid areas, a strategy that has yet to be maximized and yield many benefits for residents.

The value of prioritizing planetary and societal well-being is slowly but certainly becoming realized in the plans of major Philippine businesses. About addressing the pandemic, San Miguel Corporation president Ramon Ang explicitly stated that he will “choose life over money.” Furthermore, Ayala Corporation recently decided to divest from coal by 2030, following a similar announcement of First Philippine Holdings in 2016. To keep this momentum, the public must keep on monitoring and pressuring businesses for more sustainable operations.

Moving forward, global and national leaders must avoid further investing the long-term health of institutions on outdated energy. To minimize the risks of potential crises on economies and genuinely commit to sustainability, the just transition to a "new normal" defined by a renewables-powered future must begin now.


John Leo is the program manager of Living Laudato Si Philippines and Climate Action for Sustainability Initiative (Kasali). He has been a citizen journalist and feature writer since 2016. He earned his MS Atmospheric Science degree from the Ateneo de Manila University in 2018.


SunStar website welcomes friendly debate, but comments posted on this site do not necessarily reflect the views of the SunStar management and its affiliates. SunStar reserves the right to delete, reproduce or modify comments posted here without notice. Posts that are inappropriate will automatically be deleted.

Forum rules:

Do not use obscenity. Some words have been banned. Stick to the topic. Do not veer away from the discussion. Be coherent. Do not shout or use CAPITAL LETTERS!