Government lags in implementation of energy efficiency projects

MANILA, Philippines — Philippine government agencies are still lagging in implementing energy efficiency projects two years after Republic Act 11285 or the Energy Efficiency and Conservation (EE&C) Act was implemented.

During the inaugural of Energy Efficiency Day Monday, House Speaker Lord Allan Jay Velasco, who previously chaired the lower house’s energy committee, said the law requires all government agencies to ensure efficient use of energy in their offices, facilities and transportation units while local government units (LGUs) need to create EE&C plans.

Citing data provided by the Department of Energy (DOE) to World Bank, Velasco said the cost of transforming lighting and air conditioning for national government buildings to become more energy efficient is P13.2 billion.

The energy efficiency lighting projects can reduce consumption by 44 percent and 27 percent for air conditioning, generating savings of around P3.4 billion a year, which is substantial savings enough to pay for the projects, the lawmaker said.

“The actual challenge is how to encourage government agencies to become more energy efficient or how national government agencies (NGAs) can overcome initial apprehensions on partnerships with private energy service company (ESCOs),” Velasco said.

The Philippine Energy Efficiency Alliance (PE2) – a non-stock, non-profit organization of energy efficiency market stakeholders that organized the virtual event – echoed Velasco’s statement, saying gaps need to be filled to increase government’s implementation of EE&C projects.

“How do we enable ESCO performance contract procurement by government agencies right now? How do we enable and scale up more Public-Private Partnerships (PPPs) for energy efficiency if we bundle hundreds of public buildings and municipal street lighting? How do we enable that and work within the Build Operate Transfer Law in the Philippines? How do we get National Economic and Development Authority (NEDA) joint venture agreement work for energy efficiency as an eligible activity of asset class?” PE2 president Alexander Ablaza said.

But while government is trailing in implementing EE&C projects, the country has improved its position in the region in terms of becoming energy efficient.

This was possible because of the passage of the EE&C Act, said Ashok Sarkar, senior energy specialist for energy and extractives global practice of The World Bank.

In the energy efficiency scorecard in the World Bank’s Regulatory Indicators for Sustainable Energy (RISE) 2020 report, the Philippines ranked just above the global average of 48 and Southeast Asia’s average of 53, or within the yellow zone.

The RISE report measures policy progress in 138 countries on renewable energy, energy efficiency, electricity access, and access to clean cooking – the four target areas of Sustainable Development Goal 7 (SDG7).

“The 2019 passage of EE&C Act raised the country’s score above the average the global and Southeast Asian average,” Ablaza said.

Energy Undersecretary Jesus Posadas said the agency has taken concrete steps to push the EE&C agenda into the mainstream through the development of several key issuances, mostly focused for the private sector.

The DOE has collaborated with government agencies to stimulate investment, particularly in the use of energy efficient technologies in designated establishments, such as with the Board of Investments (BOI) for the guidelines on the endorsement of energy efficiency projects to BOI for fiscal incentives and the income tax holiday to be put in place to lower the cost of capital-intensive projects.