A recent study funded by the British Government shows the Philippines has the potential to take a huge chunk of energy efficiency investments amounting to at least $790 million.
The British Embassy Manila launched the study this week in a forum hosted by the Makati City Government with the special participation of the La Liga Policy Institute. The study shows how energy efficiency can open doors to new investment opportunities in six South East Asian countries, namely Singapore, Vietnam, Indonesia, Thailand, Malaysia and the Philippines.
According to the study, the Philippines ranks third among six South East Asian nations as a possible investment destination for projects that bring down energy consumption whilst maintaining the same output. The study also provides baseline information on the amount of business opportunities and identifies sectors that are expected to benefit the most from undertaking energy efficiency projects.
British Ambassador Stephen Lillie underscored the importance of energy efficiency, which is often seen as the neglected element in the low carbon economy. “We all know there’s a big power deficit in the Philippines. [I’m] glad to see that the lights are all on today, but there’s obviously a big risk that if the power deficit cannot be dealt with, then those lights will be going out at some point. So energy efficiency is a very important part of bridging that deficit. So for the very many reasons, for security, climate and for good financial housekeeping, which is most important to mayors and city administrators, energy efficiency makes good sense,” he said.
The Philippines offers the shortest payback period in the industrial sector, with periods ranging from 1.5 to 3.5 years. In the commercial sector the Philippines ranks second, with payback periods ranging from 4 to 9 years. It ranks just behind Vietnam where the commercial sector is dominated by hotels.
According to the study, the hotel sub-sector offers the shortest payback period among all categories in the commercial sector, given its highly energy intensive nature. About 40% of a hotel’s energy consumption goes towards heating water for showers, pools and laundry operations. Investment towards new and cheaper ways of heating water such as solar panels, therefore, lead to significant cost savings.
Lillie underlined the importance of the study. “This reflects our wider commitment to tackling climate change. Our British Foreign Secretary William Hague described climate change as one of the biggest foreign policy challenges of the 21st century, to be compared with the challenges of terrorism or weapons of mass destruction. Climate change isn’t just an environmental issue, it’s an issue that affects our fundamental security – energy security, food security, water security – it could even affect the relationships between different states in the future. So it’s a real challenge for us to tackle in the 21st century,” he said.
Lillie added that the British Embassy’s commitment to reduce its carbon emissions is reflected in its building in Taguig which has been cited as the most energy efficient British Embassy in the world, having been awarded a platinum rating by the UK’s green building rating system.
Energy efficiency makes good business sense, as the study found that it can reduce the Philippines’ energy bill by US$215 million annually. Investing in energy efficiency is a cost-effective way to reduce greenhouse gases emission and save on energy bills. However, potential savings though energy efficiency are often not being realised, due to a variety of barriers which include lack of awareness and limited access to funding. Government efforts to increase awareness of the profitability of energy efficiency projects is encouraged, according to Frédéric Crampe, Managing Director at ReEx Capital Asia based in Singapore, who presented the study at the forum.
The Philippines is the first to launch the study among the six South East Asian countries. The guest speakers in the forum included representatives from the Climate Change Commission, the Makati City Government, La Liga Policy Institute and Arup, with BusinessMirror lending support as the forum’s official media partner.