AboitizPower Encourages Constructive Dialogue on Renewable Energy

Aboitiz Power Corporation (AboitizPower) executive Carlos Aboitiz said more nuanced conversations on energy transitions and net-zero are needed to deliver reliable and cost-effective solutions to end-users, addressing a tendency to rely on an “incomplete accounting” of how variable renewable energy (VRE) are evaluated.

At the Asia Clean Energy Forum 2024 in Metro Manila, AboitizPower’s Chief Corporate Services Officer explained that the levelized cost of electricity (LCOE) only captures the cost of renewable energy when the sources are available.

“Often, we hear pronouncements that renewables are cheaper than their fossil fuel counterparts. And when paired with the understanding that they are also cleaner, this results in a ‘zero-downside’ conclusion that we should immediately shift from fossil fuels to renewables,” he said. “[But] LCOE does not provide an apples-to-apples comparison.” 

Comprehensive Accounting

A full accounting reflects the costs of running the electrical grid reliably round-the-clock. This means evaluating the expenses of the technologies and capacities to address the demand gap and minimize the inconsistencies of VRE.

Aboitiz emphasized the challenges of balancing the priorities of energy security, affordability, and decarbonization, stemming from the present lack of economic alternatives to fossil fuels, the growing energy demand, and the absence of constructive, fact-based discussions to support sustainable and equitable progress.

Equitable Energy Supply

Filipinos can be lifted out of poverty through job opportunities and livelihood that rely on a continuous, reliable, and secure power supply. However, this can only be achieved by successfully addressing the projected 6.6% annual increase in Philippine electricity demand from 2020 to 2040.

Aboitiz agreed that VRE capacities should be expanded to decarbonize the grid, but maintained that it must be viewed as only part of a diversified solution that includes tapping other energy sources.

Addressing the weaknesses of VRE solely through energy storage systems can increase the system cost, necessitating the use of other generation technologies, including non-renewables, to compensate for the production fluctuations of VREs like solar and wind and provide sufficient operating reserves.

Gradual Transition

Examining the lack of economic options to replace fossil fuels, Aboitiz ponders, whether people are ready to forgo aspects of their contemporary lifestyle, if those who have enjoyed the luxuries of modern society at the expense of the global climate are prepared to sacrifice more than those who haven’t. 

“Holding all countries to the same standards is no longer useful. It ignores the imbalances in wealth, value, and responsibility that exist, and this impedes climate politics from advancing,” he said, making the case for a gradual transition in developing and low-emitting countries like the Philippines.

Strategic Partnerships

When exploring future decarbonization technologies, the Philippines faces a shortage of human capital and supporting financial markets for its own research and development efforts, Aboitiz explains. 

He said, “We do look to developed markets — Japan and others — to pioneer the technologies of the future that we’re going to need. In the Philippines, we’re here to deploy technologies that are commercially feasible and viable. When we can take the risk of deploying those technologies, we rely on other partners to de-risk the research and development and take that risk that’s involved in things like co-firing with ammonia and carbon capture.”

In an effort to drive sustainable progress, AboitPower has embarked on several innovative initiatives. These include a partnership with Japan’s largest power generation company, JERA Co., Inc., to explore the development of liquefied natural gas supply chains and co-firing ammonia, as well as the exchange of expertise and best practices across the organization.

Recently, AboitizPower announced a partnership with Thai company REPCO NEX to create digital twins for two AboitizPower coal-fired power plants, Therma South in Davao and Therma Visayas in Cebu. These virtual replicas can simulate operational processes and systems, and detect issues in real-time, all within a secure digital environment.

“We need to define the problem better because if we define the problem poorly we risk wasting a lot of capital and energy and not achieving the progress that we aspire to achieve,” Aboitiz told the audience. “While we act concurrently, let’s strive to, through candid and fact-based conversation, figure out what the real problem is and understand the constraints of the solutions we have today.”

Source: Pragmatic conversations needed amidst uptake of more renewable energy