Modern day alchemy

For centuries the dream of many has been to create wealth out of nothing. In the Philippines, stories of Yamashita’s gold (or even Lim Ah Hong’s) still encourage people to go off to the countryside with their metal detectors.  I suspect this may prove to be a modern equivalent of alchemy: the hope of turning base metals into gold.  But there are other more viable ways to turn nothing in to something quite remarkable.

There is much discussion at the moment about the lack of adequate supply of energy in parts of the Philippines, particularly Mindanao. That’s clearly a top priority to remedy due to the limitations it places on economic growth in addition to the problems it causes for people living in those areas. Fortunately, the technical solutions needed are readily available. Investment and quick / efficient project management is needed rather than alchemy.  In fact, similar problems were tackled and to some extent solved in the 1990’s. The reoccurrence of the problem does not in itself invalidate the changes of the 1990s. But the 21st century requires 21st century solutions as well as continuing investment –  at least if you want to keep the lights on (and the air conditioning).

Energy in the UK, or more precisely energy efficiency, is an area where we have been trying to perform something akin to alchemy. Whether it is capturing the power of the sun’s rays, having wind and water turn turbines, splitting atoms or digging up and burning hydrocarbons, energy is a costly business. Wasting, or using unnecessary energy, is the equivalent of putting Pesos on an open fire. It makes no sense to pay for something you waste or don’t need.

UK Government policies have meant that we have already dramatically increased our energy efficiency. And much more is planned. Our Energy Efficiency Strategy aims to cut our energy use by a further 11 percent by 2020. That is the equivalent of 22 power stations. This can be done through a range of measures. It can be as simple as turning off the lights or unplugging electrical appliance when not needed. It can involve use of smart grids for electricity distribution and smart meters for people to understand how they can save energy.  Another major area is retro-fitting existing buildings. 

Retro-fitting building is a major area of opportunity for the Philippines. In the UK, this involves keeping in more heat. Here it involves keeping out heat more effectively and having modern and efficient cooling systems. A recent project involving my Embassy, the Department of Finance and The Clinton Foundation produced some startling results. A comprehensive analysis of current energy usage and potential savings at the DOF’s headquarters in Manila, a relatively new and efficient building, showed that further investment could achieve 12% reductions in energy usage. If applied across big government Departments such changes could save around P361 million per year and deliver a full return on investment in 2 years. I know of very few investments that could deliver this.

And what could P361 million buy you?  For the government it could mean an additional 1,500 kilometers of rural roads, 1,800 more classrooms or, if you prefer, an additional 63,000 more beneficiaries for conditional cash transfer per year.  For businesses, it could be the difference between profits and bankruptcy.

Whatever way you want to spend it, I think the facts are clear. Investing to save energy is a win-win. Good for the customer, good for the government, good for business and also good for the environment.

 (Stephen Lillie is the British Ambassador to the Philippines)