CEBU CITY – Asian Power gathered energy industry
leaders and experts in a zoom webinar, “Powering the Future: Assessing Corporate PPA
Momentum and Fuel Market Turbulence Post-COVID,” last June 14 where the leaders analyzed the
implications of Corporate Power Purchase Agreements (PPAs) and the pandemic
disruptions on the energy sector.
Joining the host and moderator, Asian Power’s
Publisher and Editor-in-Chief Tim Charlton, are Mike Thomas, Managing Director
of The Lantau Group; Leon Liew, Chief Strategy Officer at Solarvest Holdings
Berhad; Ganesha Pillai A/L. Prathapa Senan, Assistant Director Strategic
Planning Unit (Energy Analyst) at SEDA Malaysia; and Anthony Philip Segadelli,
Chief Engineer and Managing Director at Owl Energy shared their insights and
analyze the implications of the changes the energy sector is witnessing.
According to Asian Power, today’s energy sector
is at a crossroads with Corporate PPAs gaining traction as a means for
companies to curb emissions, while the pandemic’s upheaval casts uncertainty on
fuel markets.
As PPAs pave the way for an increase in
renewable energy sourcing, the pandemic's aftermath leaves the sector
navigating an unpredictable landscape
Post-COVID
green acceleration
Thomas of The Lantau Group addressed the topic
of “PPAs in a New Energy Age of Slow Thinking and Fast Games.” He pointed out
the disconnect between decarbonization plans and the realities of current
forecasts, despite some progress made.
Thomas noted that the transition to renewable
energy is not happening fast enough to meet governments' ambitious targets.
Despite this, the post-COVID period presented an opportunity to speed up this
adoption amidst fuel market turbulence.
“The economics of renewable energy [in the Asia
Pacific have significantly] improved—they are becoming robust approaching, if
not well past commerciality, in many applications,” Thomas said.
He emphasized governments’ target of net-zero
emissions by 2050, or a few decades after. This may seem far away but is best
prepared for as soon as possible so the adoption of renewables is more
effective, he stated.
He highlighted the importance of adapting to
the rapidly changing energy sector and the need for countries to position
themselves as leaders in renewable energy adoption by implementing the right
mechanisms, programmes, and policies.
Thomas drew attention to the challenges
associated with decarbonization efforts, comparing it to a game of musical
chairs, given the challenges and uncertainties associated with fuel mixes,
resource availability, and transmission system dynamics.
In light of the challenges and opportunities
Thomas went on to discuss the vital role that PPAs play in bolstering the
adoption of renewable energy. He described PPAs as a key enabler in this
transition, allowing for financial security and predictability which are
critical in attracting investments for renewable energy projects.
"Power Purchase Agreements are
indispensable tools in this new energy age," Thomas asserted. Corporate
PPAs, in particular, are becoming more prominent as businesses are increasingly
recognizing the economic and environmental benefits of sourcing renewable
energy. This trend has been bolstered by the decline in renewable energy costs,
Thomas added.
Corporate PPAs facilitate agreements between
energy producers and businesses, where the latter commit to purchasing energy
over a period of time. This not only provides renewable energy projects with a
reliable revenue stream but also allows companies to secure stable energy
prices and reduce their carbon footprint.
These agreements have the potential to serve as
a bridge between government objectives and market realities. By promoting
market-driven solutions through PPAs, it is possible to mobilize the private
sector and create a synergy that accelerates the transition to a cleaner energy
landscape, Thomas noted.
He further emphasized that PPAs are not just
contracts, but crucial catalysts in creating a sustainable balance between
ecological imperatives and economic viability in the race to decarbonize the
energy sector.
Sustainable
energy’s future challenges
Liew of Solarvest Holdings, Pillai of SEDA
Malaysia, and Segadelli of Owl Energy in a panel discussion shared their
insights on Thomas’ presentation.
Liew stressed the need to increase generation
capacity to meet growing demand, especially if Malaysia aims to become a
developed country like Singapore. Coal and gas will continue to be major
contributors to energy demand as there are limited options available: hydro and
solar, he noted.
Meanwhile, wind power is not economically
viable due to low wind speeds and inconsistent wind direction. Hydroelectric
power plants require specific geographic conditions, and most of the
economically feasible hydro dams have already been built. Therefore, solar
power becomes the only scalable option for clean energy in Malaysia, Liew said.
“If you look at Malaysia, the demand is about
20 gigawatts and from the 20 gigawatts, you have more than 40 percent coming
from coal and another 40 percent coming from gas and the remaining 20 percent
is coming from a combination of hydro and solar,” Liew said.
He acknowledged the energy trilemma in
Malaysia, which includes affordability, reliability, and sustainability, adding
that the reliability of power supply has improved in recent years compared to a
decade ago, but there is still room for further sustainability
improvements. He also mentioned the
government's plans to increase renewable energy to 31 percent by 2025 and 40
percent by 2035.
“Malaysia also recently launched a corporate
virtual PPA. So it means that the consumer in a certain part, let's say in the
south of Malaysia, would like to install their data center, they want a solar
farm but there is no land around, they can sign a virtual PPA with some land in
the northern part of Malaysia,” Liew added.
Renewable
energy options
For his part, Pillai noted that Malaysia also
has other renewable energy sources, such as biogas and biomass, that can be
explored. He highlighted the potential for developing these energy sources.
Pillai mentioned that after 2025, Malaysia is
considering new energy sources to support the grid, including green hydrogen,
both for domestic use and for potential export once the infrastructure and
assets are in place. The aim is to gradually reduce reliance on coal and
transition to more sustainable energy sources.
Malaysia has committed to not renewing or
building new coal plants, he said. Instead, the focus is on phasing out coal
and replacing it with sustainable sources such as gas and renewable energy.
Meanwhile, Segadelli discussed renewable energy
developments in Asia as well, focusing on Thailand and the Philippines. He said
that Thailand has been taking active steps to accelerate its goal of carbon
neutrality by 2065, specifically mentioning the country’s newly launched
optional carbon market that provides revenue opportunities, as well as its
release of 1,500 megawatts of PPAs for wind, solar, biomass, and
waste-to-energy projects.
“Thailand has a plan for being carbon neutral
by 2065, but thankfully, Thailand is actually doing more to try and bring it
forward than their projection says, for example, they have just released 1,500
megawatts of PPAs,” Segadelli stated.
Turning to the Philippines, Segadelli mentioned
Owl Energy’s involvement in Solar Philippines’ 850-megawatt solar plus base
project aimed at providing continuous power for 13 hours a day. He said that
large-scale solar-plus-storage projects, however, are relatively limited in the
region, particularly in the Philippines, where the power market is more privatized
and less government-led compared to Thailand.
Thomas reiterated that goals set concerning decarbonization
are just going to be moved forward, meaning a lot of stakeholder pressure, growth
in resources, and more opportunities will be created.
“We could do more, faster even with the things
that exist, even if that doesn't solve all the problems. We could see this
accelerating and that's exciting,” Thomas said. (Photos & PR: Tin Hill/Janine Ballesteros)