2016 ANNUAL REPORT
All 16 years of the 21st century rank among the 17 warmest on record, and the five warmest years have all occurred since 2010 with 2014, 2015, and 2016—in quick succession—having been the hottest years on historical record. According to the National Aeronautics and Space Administration (NASA), the combined Arctic and Antarctic sea ice numbers last February 13, 2017 were at their lowest point since satellites began to continuously measure them in 1979. Since that period, we have on average, “lost a chunk of sea ice larger than Mexico!”
Many experts believe we are now living in an era where we could see more than half the species on Earth wiped out before the end of the century. American journalist, Elizabeth Kolbert, expounds on this in her Pulitzer Prize-winning book, The Sixth Extinction: An Unnatural History. The last mass extinction occurred 65 million years ago as all the dinosaurs were wiped out during the Cretaceous period. Remember that this transpired over thousands of years. What’s startling is, today we see it happening in just over a few decades!
Our country is ground zero for the calamitous effects of global warming. None of us will ever forget the aftermath of Typhoon Yolanda (Haiyan) and the immense suffering of communities who lost loved ones and whatever few possessions they had; and when we just think of the scale of rescue, relief, and rebuilding efforts that came after, those images cannot but have an enormous impact on how we move forward as a company. For the Philippines, global warming is not some distant future event; it’s here, it’s now, and it’s affecting the very people and communities we love and serve.
Today the world already stands 1.1ºC warmer than pre-industrial times and the United Nations Environment Programme (UNEP) warns that we have three years left before the door closes to limiting temperature rise to 1.5ºC. In fact, most experts believe the COP 21 agreements will not limit warming to only 2.0ºC but will likely get us to a three or even four degree warmer world.
The math is simple—global carbon emissions need to peak no later than 2020 and the world needs to be totally off carbon in 30 years or less if we are to keep within the 2.0ºC limit—which means cutting global emissions by half every decade henceforth. This is why the rush away from fossil fuels and toward renewables needs to accelerate; the world will need to deploy technology to utilize energy more efficiently in our buildings and homes; we will need to protect and enhance the trees and oceans that today still absorb half the world’s emissions; and we need to transform our food system from a major greenhouse gas (GHG) emitter into one that’s at least GHG-neutral.
The bright side is that technology is moving along the right trajectory. We’re seeing exponential cost reductions for solar, wind, and battery storage; and over the last decade installations of renewable energy (RE) have been doubling roughly every five to six years. At this rate, RE will approach 100 percent by 2050. However, as more renewables penetrate our lives, this will have serious strategic implications for electric utilities and power generators given its ability to change the shape of demand daily and yearly. Demand peaks will be shaved, grid electricity demand growth will be moderated, and energy production will be more democratized as more and more consumers simultaneously become producers of power. It’s a brave new world coming for the energy industry, with the looming threat of coal-fired power plants being stranded and incompatible with the need for dispatch flexibility and low carbon emissions.