LISTED-company AboitizPower Corp. would have its “net-zero” roadmap ready in the next six months.
“We have a path. We have a roadmap. And the first milestone is the 2030 declaration of Aboitiz Power that we have 50:50 balance between renewables and thermal. And beyond that, we’re evaluating what are the technologies available,” AboitizPower president and chief executive officer Emmanuel Rubio said in a virtual briefing during Aboitiz Equity Ventures’ (AEV) 3rd quarter performance, Thursday, Nov. 4, 2021.
Currently, AboitizPower’s energy mix is roughly 70:30 thermal to renewable energy.
“We will be ready to come up with our net-zero vision within the next six months,” he added.
Net zero means not adding to the amount of greenhouse gases in the atmosphere. Achieving it means reducing carbon dioxide emissions as much as possible.
Under the 2015 Paris Agreement, 197 countries agreed to try to keep temperature rises “well below” 1.5 Celsius to avoid the worst impacts of climate change.
Experts say that to achieve this, net zero must be reached by 2050.
In the Philippines, more and more companies are joining a pledge to hit net-zero carbon before 2050.
“What we are trying to do in AboitizPower is we want to present a plan that we believe, a net-zero aspiration where we can confidently say it is achievable, something that we can deliver, something that we really understand,” said Rubio.
The AboitizPower chief said the Philippines must come up with a realistic plan to achieve its net-zero ambition and not follow Europe’s quick transition from traditional sourced to renewables.
“The situation in Europe is telling us that we really need to make sure we should come up and develop a transition policy to allow us to manage the consequences of fast-paced conversion to renewable energy,” said Rubio.
United Kingdom and Germany, according to Rubio, are firing up a number of coal power plants to meet their electricity needs.
“It is important for the Philippines to be realistic and pragmatic about this. We believe that the future needs to decarbonized but let’s understand how we are going to transition and have a manageable plan, a realistic one, something that will allow us to continue to deliver to feed the economic growth and not just realize all of a sudden that there is shortage in electricity,” he added.
“Let’s learn from what happened to Europe and I think there are a lot of good lessons there,” he said.
While pursuing the growth of renewable energy sources, the company said, it will continue to strengthen and improve the performance of its existing fleet.
AboitizPower said it aims to balance the reliability, cost-efficiency and sustainability of the Philippine energy system.
The availability of AboitizPower’s thermal plants in Visayas and Mindanao has seen improvements in the last two years.
Compared to 2019, Therma Visayas Inc. and Therma South Inc. (TSI) increased their availability by five percent and 23 percent, respectively.
“The increased availability has been driven by the reduction of unplanned outages, with TSI recovering from its long outage in 2019 and 2020, as well as both plants implementing efficiency initiatives such as shutdown management and robust preventive maintenance measures,” the company said.
Partnership with Jera
The Aboitiz Group sustained its trajectory growth on the back of positive performance posted by its strategic business units for the first three quarters of 2021. The company hopes to sustain this momentum for the rest of the year and on to 2022.
Aboitiz Group president and chief executive officer Sabin Aboitiz said this upward momentum is greatly bolstered by its partnership with JERA, Japan’s largest power generation company, which marked a significant milestone in the company’s century-old history.
JERA is acquiring a total of 27 percent stake in AboitizPower from holding company Aboitiz Equity Ventures Inc. (approximately 25.01 percent) and non-listed parent firm Aboitiz & Company (1.99 percent).
As a majority shareholder, AEV still has control of AboitizPower’s business operations, complemented by JERA’s expertise.
Aboitiz said this move puts the company at the cusp of a new phase—its continuous transformation and evolution that involves “profound modernization of operations, not only in power, but all its businesses.”
“The nice thing here is we have a big sum of cash that allows us to pursue various initiatives. The primary purpose of this is to allow AEV to reallocate capital, to help fund projects across the group. We are looking at infrastructure, food, banking, etc. This will be the main use of the proceeds,” said AEV chief financial officer Manuel “Dmi” Lozano.
“However, that doesn’t preclude us from looking at further diversification if the right opportunities come along. We will also be able to use these proceeds to refinance some of the higher cost debt that we have across the group. We feel that this also helps us provide an ideal leverage structure.” (KOC)