PE2 identifies EE market gaps as input to COP26 energy transition roadmap

Date Published: 
February 18, 2021
  • PE2 president Alexander Ablaza presents energy efficiency market, financing and policy gaps during a virtual UK government-organized energy transition council pre-meeting on 18 February 2021. (Screenshot Image: PE2)
    PE2 president Alexander Ablaza presents energy efficiency market, financing and policy gaps during a virtual UK government-organized energy transition council pre-meeting on 18 February 2021. (Screenshot Image: PE2)

MAKATI CITY, 18 February 2021 – The Philippine Energy Efficiency Alliance (PE2) actively participated in an Energy Transition Council (ETC) pre-meeting earlier today, organized by the UK Government through the British Embassy Manila, and aimed at gaining a shared understanding on energy transition interests, expertise and potential support for the Philippines. The event was participated by close to 50 representatives of embassies, members of the donors’ coordination forum, multilateral development banks, international financial institutions, research institutions/academe, civil society organizations and philanthropists working in the energy space. The results of the pre-meeting will be useful inputs to the upcoming COP26 ETC national dialogue in March 2021, which the British Ambassador Daniel Pruce will host together with Secretary Alfonso Cusi of the Department of Energy, and Italian Ambassador Giorgio Guglielmino with key partners actively supporting the energy sector.

PE2 officers Alexander Ablaza, Ruth Yu-Owen, Theresa Acedillo-Lapuz, Raymond A. Marquez and Luigi Andrei G. Eusebio attended the pre-meeting.

Ablaza said, “We are glad to see energy efficiency funding included in the draft COP26 Country Information Request. We however need to be mindful that a greater chunk of the USD 243 billion EE capital gap in the Philippines through 2040 will have to be bridged by enabling more de-risked off-balance sheet equity flows, rather than depend on scaled-up debt finance from regulated financial institutions. We also need innovative procurement regulations that would position energy efficiency as infrastructure capable of creating 45.9 GW of deferred capacity upgrades in the next 20 years.”

PE2 also suggested that in order for the EE&C Act to be more inclusive, MSMEs and households should gain access to EE finance to accelerate the procurement of efficient appliances and vehicles. This can be done through microfinance facilities or large-scale Government retrofit programs. Ablaza added, “I also believe that the EE&C Act will need to be bolstered by subsequent policy issuances in the next 20 years.”

The PE2 president explained that energy service companies (ESCO) will need to ramp up technical capacities (i.e. trained and certified professionals) and removing their barriers to project debt finance and portfolio equity investments from the large energy players. He explained that about 98% of ESCOs across developing Asia do not have suitable access to bank lending to pursue their pipelines of performance contracts. Also, a super-ESCO or equivalent EE aggregation vehicle will need to be created.

Lapuz said, “We need to develop our local pool of energy auditors capable of doing investment grade audits to help de-risk large scale EE projects.”

PE2 officers also said that both credit guarantees and energy performance guarantees (or energy savings insurance) will be needed to enable debt and equity investment decisions.

The pre-meeting was organized with the following objectives: (i) To share with donors and other progressive actors (civil society, philanthropies, business) the ETC multi-stakeholder approach to the Philippines, and how they can work in partnership with the ETC to encourage ambition, share knowledge/expertise and support potential Philippine energy transition outcomes; (ii) To provide a high-trust, confidential forum in which stakeholders can share their views on the priorities, opportunities and barriers for accelerated energy transition in the Philippines; (iii) To discuss what might constitute an ambitious but potentially achievable “ask” from the Philippines ahead of COP26, and how best to construct a corresponding “offer”, including seeking to identify short term technical and financial support that might unlock leverage of larger sources of international support; and, (iv) To discuss how best to facilitate an effective ETC country dialogue, and how best to engage the donor group in the Philippines subsequently to help leverage ETC outcomes towards COP.

About PE2

Philippine Energy Efficiency Alliance Inc. (PE2), is a non-stock, non-profit organization of energy efficiency market stakeholders.

Learn More

Republic Act 11285

R.A. 11285 - An Act Institutionalizing Energy Efficiency and Conservation, Enhancing the Efficient Use of Energy, and Granting Incentives to Energy Efficiency and Conservation Projects

RA 11285 - Text

RA 11285 - Signed

IRR - Signed

Beyond COVID-19: How governments, ESCOs and innovative financial modalities can mobilize energy efficiency capital through 2040

Working Together to Bridge an Energy Efficiency Financing Gap

Infographics

PE2 Infographics on Energy Efficiency and Conservation Roadmap Targets

Infographics on Roadmap Targets for Energy Efficiency and Conservation

» View | Download

Join PE2 Now!

We would love to have you on board

The Philippine Energy Efficiency Alliance, Inc. (PE2) is a non-stock, non-profit organization of energy efficiency market stakeholders.

Learn More

PE2 Secretariat

  • Philippine Energy Efficiency Alliance, Inc. (PE2)
    19/F Philippine AXA Life Centre 
    Senator Gil Puyat Avenue 
    corner Tindalo Street 
    Makati City, Metro Manila 
    Philippines 1200
  • +63 2 7989 3007 
  • secretariat@pe2.org 
Signup to our newsletter:

To prevent automated spam submissions leave this field empty.