First Gen positioning as ‘low carbon solutions provider’ in the RES space

Lopez-led First Gen Corporation is stepping up competition in retail market space of the power industry, as it is strategically gearing up to reign as ‘green solutions provider’ to commercial and industrial (C&I) end-users that are advancing their net zero and sustainability goals.

At the 2024 Philippine Semiconductor and Electronics Convention and Exhibition in Pasay City, First Gen Vice President and Head of Power Marketing and Economics Carlo Vega indicated that their company is well-positioned to offer “innovative and low-carbon energy solutions” – primarily in the retail electricity suppliers (RES) space – and the supply offers shall be coming from the firm’s renewable energy (RE) fleets of hydro, wind, solar and geothermal facilities.

Nevertheless, given the strained power supply condition in the country, innovative approaches to decarbonization could be the alternative that many big-ticket customers could initially embrace while full renewable energy (RE) solution cannot flourish yet in the Philippine power sector.

Vega expounded that as things stand today, the decarbonization pathway of many companies in the country is still going through rough patches due to the protracted dilemmas of faltering system reserves, especially for Luzon grid which is the country’s main economic center.

He opined though that more big electricity users would still opt for energy services offered in the competitive retail market, hence, concrete solutions shall also be thought out prudently based on current market conditions – and such must be anchored on challenges relating to the country’s growing power demand; precarious power supply situation; and the need to reduce carbon emissions.

First Gen Vice President and Head of Power Marketing and Economics Carlo Vega at the 2024 Philippine Semiconductor and Electronics Convention and Exhibition.

On top of those concerns, end-users that are scouting for clean energy solutions must also take into consideration the prevailing dominance of coal in the Philippine energy mix.

“The question we need to answer is how we intend to address this growth while we transition to more decarbonized energy future,” Vega stressed.

At this point, the First Gen executive acknowledged that “more companies recognize that, while they cannot get full RE, they want to discuss a plan on how to decarbonize.”

Vega noted that the stark reality in the domestic power sector is that “power reserves are inadequate due in part to increased economic activity. At the same time, the country has to reduce its carbon emissions as part of a global campaign to fight adverse climate change.”

With global warming risk as key part of the equation, combined with the long-term quest for energy security and the policy promoting renewables for a decarbonized future, he emphasized that “we must plan for a cleaner energy scenario where coal contributes less in the power mix.”

In First Gen’s case, Vega stated their company “cannot provide a fully renewable energy solution to all its customers due to supply limitations.”

Nevertheless, he explained that “electricity from natural gas presents a pragmatic solution with its lower carbon footprint and ability to flexibly provide reliable baseload, mid-merit, and peaking power supply needs.”

The Lopez-led firm currently has the biggest portfolio of gas-fed generating assets in the country; and coincidentally, this is touted as a cleaner technology that perfectly matches the variability of solar and wind farms.