As featured on BusinessMirror: Decarbonization through renewable energy
Asia Pacific’s Corporate Power Purchase Agreements (CPPAs) emerge as a pivotal approach for corporates as they move forward on their Net Zero journey.
KPMG has released the ‘Decarbonization through renewable energy: Understanding Asia Pacific’s Corporate Power Purchase Agreement landscape’, a report which gives an overview of the renewable energy market in the Asia Pacific region.
There is no doubt that the entire world is striving for Net Zero. In the Philippines, corporate leaders began energy efficiency actions in 2017, with the Department of Energy publishing the Energy Efficiency Roadmap 2017-2040.
"The key to reducing carbon footprint is corporate responsibility in making business operations sustainable"
Advisory Partner and ESG Lead
KPMG in the Philippines
"The firm has lived up to its responsibility by providing services and doing simple yet influential activities that raise ESG consciousness in the business world and in society as a whole," she added.
Moreover, the utilization of renewable energy sources is a growing trend in the Philippines. As of 2020, the renewable energy capacity mix reached 29.1%, with hydro contributing the most at 14.4% and followed by geothermal at 7.3%, solar at 3.9%, biomass at 1.8%, and wind at 1.7%.
"The renewable energy campaign is a collaborative effort shared by all stakeholders in society. The Philippines' implementation of a green energy option program, which allows power users to source their own electricity from renewables, is important."
Michael Arcatomy Guarin
Deal Advisory Head and Energy Sector Lead
KPMG in the Philippines
The report, which provides enterprises with a clear view of the CPPA market and summarizes both opportunities and barriers in the current renewable energy market, looks at government policies and regulations, types of basic power purchase and sale contracts, and renewable energy-related policies and objectives of some major power plants. It further elaborates on the electricity market framework, Corporate Power Purchase Agreement (CPPA), renewable energy certification, policies, purchase, and sale cases of 12 markets in the Asia Pacific region.
The report highlights six key trends driving the future development of the renewable energy market in the region.
1. The CPPA market in the Asia Pacific region is still less developed but shows significant potential for growth.
2. The regulatory framework to implement changes to the CPPA framework is rapidly evolving in the region.
3. The phase-out of generous feed-in-tariff (FiT) scheme is expected to increase the appetite for CPPAs.
4. Economics and net metering are driving the rooftop solar installation and increasing the adoption of on-site PPA.
5. There is a growing interest in CPPA across the Asia Pacific to achieve their respective sustainability commitments.
6. Asia Pacific is progressing towards a low-carbon energy future.
As an increasing number of countries respond to climate change and announce their commitments to Net Zero, supporting mechanisms and measures continue to bloom. Besides domestic and foreign regulatory requirements, the demand for an enterprise to have sustainable operations and supply chains has also become the driving force for corporations to purchase green electricity.
According to the Paris Climate Agreement, there is a target to achieve carbon neutrality and Net Zero carbon emissions by 2050. However, with the intensification of climate change and the global energy crisis caused by the Russian government’s war in Ukraine, the price of renewable energy has risen in response.
Every market in the region has a different electricity market liberalization progress and regulatory framework, which makes green energy procurement challenging, and impacts the path to Net Zero.
The excerpt was taken from the KPMG Thought Leadership publication: https://home.kpmg/xx/en/home/media/press-releases/2022/11/kpmgs-report-explores-renewable-energy-as-a-key-enabler-of-decarbonization.html