The Green Delusion

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Despite its supporters, going green is just a small part of the solution for the Philippines’ energy woes

Let me make it clear: There’s nothing wrong with sustainable energy. In fact, it’s good that so many people are riding the green train. More than ever, developers and builders and policymakers are embracing the concept of eco-friendly living.

Becoming more environmentally conscious lowers our household expenses too—something Filipinos direly need in a country whose power rates are among the highest in the region.

But if demand and prices keep going up, going green is all for naught.

Switching from traditional lighting to LED can be seen as a temporary solution to the power crisis that is being ignored by government. But it is a very expensive solution. According to LED lighting company Divvali, LEDs cost around US$30, compared to incandescent bulbs, which cost only US$0.75. Halogen goes for US$5 and fluorescent US$3.

Prices are deceiving since LEDs cost almost 10 times more than a fluorescent bulb. A homeowner could potentially save 34% in the long run. That is calculated from the North American price of US$0.10/kWh. But would homeowners bother to think long term?

Pros and Cons

Miles Stump of International Finance Corporation weighs the pros and cons between efficiently using energy and going renewable instead. Projects that advocate becoming more energy efficient for individual homes, companies and even existing public infrastructure are low-risk, are a medium investment, and can be implemented on a large number of projects. Creating renewable energy, on the other hand, involves high risk, large investment, and only a few projects can be implemented.

Companies have a higher stake in this equation. Dealing with large numbers, they stand to save millions from becoming more energy efficient. A 2009 survey of Cofely Philippines conducted from 23 April to 11 June 2009 revealed that buildings that invest Php1.8 billion on heating, ventilation, and air conditioning may save 173 million pesos annually.

While becoming energy efficient looks good on paper, it does not address the problem of a looming national crisis. It is doubtful whether switching to LED lighting will cut cost in the future when power rates balloon.

Government investment

The Philippine government seems to be on the right track by not heeding the call of people to subsidize energy. At the 4th Philippine Energy Efficiency Forum, Department of Energy (DOE) Secretary Jericho Petilla revealed that while the country’s neighbors in the region subsidize their energy, it is actually harmful in the long run. He explained that it has become hard for Indonesia to phase out energy subsidies, facing challenges the Philippines cannot afford to have, such as being vulnerable to oil price volatility, since Indonesia shoulders business losses.

“Green power is more expensive, whether solar, wind, geothermal, hydro, it’s always more expensive,” says Christopher Dela Cruz, BERDE CEO. “Filipinos need to understand that. I think unsubsidized energy is a good trigger for people to become more involved and conscious of their consumption. If there’s one good thing about unsubsidized energy, it’s making people conscious. It becomes more important for businesses to go green, because it affects their bottom line.” BERDE is the Philippines’ voluntary green-building rating system.

The Philippines also faces a dilemma regarding its bullish economy. “The demand forecast that we have right now [for energy] is based on 6% [GDP] from a few years back,” Petilla says. “Now we’re looking at 7–8%. That spells a lot of difference, because two years ago, when investors came to put up plants, they were looking at 6%.”

But investors have a reason to doubt whether the Philippines can sustain its growth. “The biggest problem that we have is that if we tell them it’s 8%, but it turns out to be a lot less than 8%, then investments may go south,” Petilla continues.

“We’re not planning for the current administration. Energy is long-term. That’s why our planning goes beyond this particular administration,” Petilla says. “We’re actually looking toward the next administration. Because if we keep on focusing our activities within this administration, nothing is going to happen. It has to be long-term. Energy is a long-term problem, and the solutions need to be long-term as well.”

Green efficiency, black energy

And here’s where the green revolution becomes moot.

“Coal is actually invading our power mix,” Petilla says.

“By the end of 2015, more than 50% of our energy mix will be coal. We do have technology-based renewable energy, but we still need them to partner with non-renewable energy. We don’t have anything right now that can compare with coal, except for Liquefied Natural Gas (LNG).”

Geothermal energy in the Philippines, despite being the second largest in the world, pales in comparison to the future contribution of LNG. Right now, the country is getting around 2,700MWe from natural gas, and majority of it comes from the Malampaya gas field. But Malampaya, Petilla says, will run out in 2032.

“We do have other reserves, but we cannot drill because we have a problem with our neighbors as far as the disputed territories are concerned,” Petilla says. So the Philippines is being pushed to accept coal. While energy from coal is affordable and cheap, coal produces carbon dioxide, one of the major causes of climate change. It is also non-renewable and is disappearing fast despite its stable market price compared to oil.

“The problem is, we don’t have any alternative at this point that is acceptable to the people,” says Petilla.

But slowly, the country is getting there. The government is fast-tracking the country’s first LNG terminals with the help of Shell. “I’m actually embarrassed to say that we don’t have LNG terminals, while our neighbors do,” admits Petilla.

The NON-Future

While we wait for our very first LNG terminal, we will consume energy from coal. Offsetting our carbon footprint by becoming more energy efficient is turning out to be nothing more than a fad.

Ng Yuina, senior manager at Reed Exhibitions, organizer of BEX Asia 2013 in Singapore, a green construction expo, says we have to do our best to reduce our carbon footprint, despite the dirty energy source.

“When each building is built, sure, it uses dirty energy and lots of carbon is emitted. But you do your best to reduce all that,” Ng says.

“Unless you’re building a building without any purpose—which is highly unlikely because it’s a very huge investment.”

“The coal issue has been part of the agenda, good or bad, depending on who is talking,” Dela Cruz says.

“Having that balance is always a government challenge, because the dirtier the energy, the cheaper it gets. The cleaner it is, the more expensive it gets. Somebody will always complain, and honestly I don’t want to be in their position.”

Print ed: 08/13


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