They are among the heaviest users of energy—to power shopping malls, factories or mine sites. They can opt to buy everything from power producers but they now find it sensible to convert free resources around them—such as sunlight or agro-industrial waste—to meet more of their energy requirements.
It’s not a cheap process but the cost of producing renewable energy (RE) has gone down in the last decade to be sufficiently encouraging for companies to take on the renewable energy challenge. Some are willing to invest more than others to contribute to the “net zero” mid-century goal of completely negating the amount of greenhouse gases (GHG) produced by human activity. Apart from building energy-efficient structures as well as reducing and recycling waste or doing largescale reforestration, shifting to clean energy is a fast way to reduce greenhouse gas emissions.
We looked at private sector initiatives, particularly among companies that are not in the energy business, to generate renewable energy for their own use, although some may sell excess power to the grid. These complement efforts of a growing number of power producers transitioning to a low-carbon future.
“For power companies, we are seeing a more sustained move toward renewable or clean energy, particularly for new capacity. Apart from the mandate toward a national energy mix that now favors renewable or clean energy, there is also a drive to limit financing for capacity expansion in relation to thermal generation—so these are the two incentives for power companies to increase clean energy in their portfolios,” said Jose Mari Lacson, head of research at fund management firm ATR Asset Management (Atram), which launched the first sustainability-themed local equity fund.
Outside the power generation sector, Lacson said the use of renewable energy wasn’t fairly widespread yet, although Atram has observed that mining companies that were primarily dependent on coal for electricity were now beginning to shift to renewables.
“The consumer sector is probably the next most exposed to renewable energy but mainly for manufacturing. This is because there are more incentives to adapt a circular economy business model in order to utilize the raw material as a fuel source i.e. waste to energy, We estimate that about 12 percent of the energy needs of consumer manufacturing companies may come from renewable energy sources. For property companies, closer to 4 percent of the energy needs are renewable energy.”
—Jose Mari Lacson, ATR Asset Management
Solar on malls
Solar power, whether on or off-the-grid, is a popular renewable energy option for many companies, as solar panels are quite easier and faster to install compared to a biomass.
With their vast footprints, the roof decks of shopping malls are ideal sites to install solar panels on. This maximizes the use of space, especially in urban settings, and allows operators to significantly reduce electricity expenses. As the cost of soits lar batteries seen to further go down in the years ahead, the reliability of solar power is expected to increase as well.
Among local shopping mall developers, Gokongwei-led Robinsons Land Corp. (RLC) has the most number of malls with solar panels on their roof decks. There are now 23 Robinsons shopping malls across the country generating 29.5 megawatts of power. This is equivalent to planting 1.1 million trees and reduction of 65,300 tons of carbon dioxide.
“It’s all [for] internal use— off-the-grid. Usually in the provinces, they are not ready to procure such kind of power, unfortunately. We would love to sell our excess power to them but most of them they don’t have absorptive capacity],” RLC president Frederick Go said.
Based on RLC’s sustainability report, these solar panels allowed the company to save P210 million worth of electricity expenses in 2020.
As of end-2020, SM Prime Holding’s seven SM Supermalls in the Philippines and three in China had solar panels installed on their rooftops to service operations and lower electric expenses. These solar panels generated 9,620 MW of power which helped mitigate an estimated 22,424 tons of carbon emissions last year.
SM Mall of Asia, SM City North Edsa, SM City Cauayan, SM City Cabanatuan, SM City Iloilo, SM Tuguegarao and SM City Trece Martires are the seven malls included in the 2020 sustainability report. In China, SM City Xiamen, SM Lifestyle Center and SM City Jinjiang also operate solar facilities.
Last February, the eighth local SM mall—SM City Bacoor— energized a 1.3-MW rooftop solar-powered facility.
“SM Prime places great emphasis on improving our energy performance through extensive energy reduction initiatives. With the increasing renewable energy we’re getting from installing facilities such as solar panels, we’re committed to expand this program to continue our energy efficiency measures, which will in return provide a safer environment to our customer and the communities that we serve,”
-SM Prime manager for investor relations Alex De Vera Dizon.
SM Prime has embarked on a five-year program to diversify its energy source portfolio as part of its efforts to lower its carbon footprint. It has committed to gradually move to energy sources that have less environmental impact and more economical and reliable at the same time.
Century Pacific Food Inc. (CNPF), the country’s leading canned food producer, switched on last June a 5.2-MW solar plant in General Santos City. This can generate an annual potential energy of 7.4 million kilowatt hours, effectively offsetting 6,000 metric tons of carbon dioxide every year. With this project, CNPF’s General Santos facilities are now 60 percent powered by clean energy sources.
CNPF, which is also on its second year of being plastic neutral in 2021, is among the top three consumer staples companies in Asia when it comes to environment, social and governance metrics, according to Institutional Investor’s 2021 AllAsia Executive Team survey.
“Sustainability is critical to our business, not a nice-to-have. People need to eat, and it is our business to make sure they, their children, and their children’s children will always have nutritious food on the table,” said Teodoro Po, CNPF’s chief executive officer. “As stewards of our investors’ capital, we aim to consistently deliver positive results and conduct business sustainably and with integrity.”
Fast-food giant Jollibee Foods Corp. has a number of stores in Southern Luzon with solar panel installations, which reduce electricity consumption from nonrenewable resources.
“Due to restaurants’ high energy consumption, solar PV (photovoltaic) systems are seen as assets in our stores. These panels have a cumulative capacity of 200 kW and reduce consumption from the grid by 5-7 percent in each store. On average, we are able to avoid more than 100 tons of carbon emissions and save over 240,000 kWh of energy annually through these installations,” Jollibee said.
Multinational food and beverage producer Del Monte Pacific has built a waste-to-energy facility in its Cagayan de Oro cannery, which converts its wastewater into 2.8 MW of electricity and cleanses water discharged at coastal waters of Macajalar. It covers 20 percent of the electricity requirement of this cannery.
This “ensures 100 percent wastewater treatment and serves as a shield against unstable power supply and power cost increases,” Del Monte said in its 2020 sustainability report. “This plant complements the job done by an equally eco-effective but power-intensive aerobic treatment plant.”
Del Monte, which is led by the Campos family, also operates a 1.2-MW solar facility at its Hanford canning facility in California, United States, which contributes 20 percent of electricity requirements at this facility.
Dole Philippines has teamed up with the Metro Pacific Investments Corp. group to process organic fruit waste and harness biogas to produce a 5.7-MW equivalent of clean renewable energy and reduce GHG emissions by about 50,000 tons of carbon dioxide per year. The biogas plants, to be located in South Cotabato, will process Dole’s pineapple waste to replace fossil fuel for power, steam, and heat generation. This is the first Philippine biogas project to qualify for a maximum grant from Japan under a program to subsidize low-carbon technologies, systems and infrastructure.
Metro Manila’s two water concessionaires have also embraced renewable energy.
West zone concessionaire Maynilad Water Services has built a P100-million one-MW solar facility at its La Mesa compound in Quezon City. Covering a land area of about 8,250 square meters, this was built to “augment power supply for Maynilad’s La Mesa Pumping Station, thus reducing the company’s dependence on the grid and on fossil fuels.” The facility is projected to unlock about 10 percent in annual cost savings on the electricity consumption of La Mesa Pumping Station, which operates 24/7 to boost water supply from the treatment plants to the reservoirs for distribution to customers.
At the east zone concession, Manila Water has installed solar panels at FTI Septage Treatment Plant, Makati North Sewage Treatment Plant, and Delos Santos Pumping Station. On average, these facilities generate 170,000 kWh solar power every year.
Outside Metro Manila, Manila Water units Clark Water and Boracay Water use solar streetlights, while Laguna Water has installed solar panels in its Booster 3 facility that generates an average of 90,000 kwh/year. Another unit, Estate Water, is also set to utilize solar energy in facilities starting 2021.
Cement manufacturer Republic Cement looks at waste not as useless stuff to discard but as a precious resource that can be managed and turned into alternative fuel for its factories. For almost 20 years, the use of alternative fuels and raw materials has been a part of its cement manufacturing process. Through co-processing, the thermal or mineral properties of qualified waste, which includes plastics, are recovered and used as fuel in the production of cement. This is widely considered as a more environmentally friendly alternative to landfilling and chemical treatment waste management options.
Through co-processing, emissions are contained and managed within the kiln and any ash produced is fully integrated into the stable microstructure of clinker, a key ingredient of cement. This reduces its dependence on fossil fuel, such as coal.
Republic Cement has five cement plants, all of which are equipped to use alternative fuels, such as plastic waste, to generate energy. Its plant in Teresa, Rizal, for instance, is able to produce about 4 MW of power annually, replacing about 30 percent of power requirements of this facility. The same heat is used to dry raw materials.
“It’s just the tip of the iceberg. We have a lot of firepower to go and it could go a long way,” said Angela Edralin-Valencia, director of Ecoloop, Republic Cement’s resource recovery group.
To give local governments more incentives to segregate solid waste collection, Republic Cement has an existing waste for cement program, whereby 10 cement bags are donated for every ton of shredded plastic waste collection. The company is also collaborating with industrial users and nonprofit organizations to deepen this waste collection and segregation program.
Holcim Philippines Inc. is boosting investment in waste management to be able to use alternative fuels and raw materials for cement production. It has committed to invest P121.5 million until 2022 to beef up its waste management unit, Geocycle.
Holcim intends to raise the efficiency of shredding operations to convert qualified waste materials to alternative fuels, install new equipment, and improve storage and feeding facilities at its cement plant in Norzagaray, Bulacan. These will enable Geocycle to support the company’s Bulacan plant in using more
qualified post-consumer and municipal solid waste as alternative fuels instead of coal.
Holcim has been using qualified waste such as nonrecyclable plastics and biomass as alternative fuels in cement manufacturing through co-processing technology since 2003. In 2020, it co-processed close to 130,000 tons of qualified wastes from local governments, industry partners and agricultural processors in its plants in Luzon and Mindanao.
Over the long run, Holcim also plans to explore wasteheat recovery to reduce its electrical energy consumption.
Nickel Asia’s core business is nickel mining, but it is now finding it increasingly attractive to invest in renewable energy, particularly solar plants and geothermal facilities. Its unit, Mindoro Geothermal Power Corp., holds the exclusive rights to explore, develop and exploit geothermal resources covering a steam field in the municipality of Naujan, Oriental Mindoro. Another subsidiary, Biliran Geothermal Inc., has been created to explore, exploit, discover, develop, extract, dig and drill any substance, minerals or otherwise, that can generate heat or power and perform service contracts, including geothermal services.
Another subsidiary, Jobin-SQM Inc. (JSI) , has authority from the Energy Regulatory Commission to develop solar power plants. JSI has been authorized to develop and own a dedicated point-to-point limited facility to connect its 100-MW solar power plant to the Luzon grid of National Grid Corporation of the Philippines.
For its internal use, Nickel Asia uses solar-powered facilities in remote areas to reduce fuel consumption. The company continues to explore opportunities to incorporate renewable and energy-saving alternatives to present energy sources. Its subsidiary, Rio Tuba Nickel Mining Corp., has conducted a feasibility study on the use of hybrid energy (solar-genset) as an energy source, while Hinatuan Mining has included windmill and solar power plants in its proposed research and development program.
For Atram’s Lacson, measuring or collecting the data on energy consumption is the first step for companies taking on the RE journey and this step isn’t costly at all. “Having the data and exploring the options should enable companies to make better informed strategic decisions to their energy mix,” Lacson said.
“Investing in technologies to reduce carbon emission can also make companies more competitive in the future, so it’s not all cost. There can be a return element as well. It would also help if companies become more transparent and publish/ communicate their carbon emission reduction initiatives so that investors become aware of how they are integrating this risk and opportunity into their business strategies.”
Federico Lopez—chair of clean energy producer and leading geothermal producer, First Philippine Holdings Corp. —said the next 10 years would be absolutely critical to whether the world would get the transition on course for carbon neutrality by 2050 or watch it run away irreversibly.
“The thought of lowering the carbon emissions of our electricity grid enthralls me because if done successfully, you can electrify transportation and buildings, and even the industrial sector, which is regarded as the most difficult to electrify because it features processes that rely heavily on the petroleum sector for both feedstocks and for energy. This will bring down carbon emissions even more and also lead to cleaner urban air. And while all these may appear to be a daunting challenge we must face, I am optimistic about the future as many new developments continue to unfold,” Lopez said.
This story was first published in the August 27, 2021 issue of the Philippine Daily Inquirer’s Road to Clean Energy special report.