Are renewables a good fit for the Philippines?
by JOHN ALTOMONTE, CEO
The world, despite everything that happened in 2020, finally got behind clean energy, as company valuations across the entire industry shot up. Solar and wind, already the cheapest forms of electricity ever, continue to decrease in price, and will continue to do so- there is no indication that we are approaching a price floor anytime soon.
As developed countries continue to prepare themselves for an energy transition, how does the Philippines match up to the conditions that these technologies require?
Several studies have found that the installation of additional renewable energy capacity in the Philippines is highly suitable given its:
Archipelagic geography,
High irradiation, and
The price of alternatives.
It makes sense that a country composed of over seven thousand tropical islands stands to benefit from distributed energy resources. Particularly solar, as the harsh tropical sun reminds everyone who sweats under its gaze.
This also has implications for sustainable development– rural and island communities that dwell away from major loads have to shoulder electricity prices four to five times the price of those in cities, as they rely on diesel generators that only run for portions of the day.
A recent study also demonstrated that significant decreases (20%!) in the levelized cost of energy (LCOE) could be attained by shifting to photovoltaic-battery-diesel hybrids, in these same off-grid areas that rely upon diesel.
Another study produced by the United States Agency for International Development (USAID) and the National Renewable Energy Laboratory (NREL) highlighted that 30% and 50% renewable energy power sector penetration targets were achievable using only wind and solar.
The pathway towards a cleaner power industry is crystal clear– simply build out the cheapest producers of energy available in the world. Seems like an easy decision, noh?
REFERENCES
Kuang, Y., Zhang, Y., Zhou, B., Li, C., Cao, Y., & Zeng, L. (2016, June). A review of renewable energy utilization in islands. Renewable and Sustainable Energy Reviews, 59, 504-513. doi:https://doi.org/10.1016/j.rser.2016.01.014
Lazard. (2019). Lazard's Levelized Cost of Energy Analysis - Version 13.0. Lazard.
Weir, T. (2018). Renewable energy in the Pacific Islands: Its role and status. Renewable and Sustainable Energy Reviews, 94, 762-771. doi:https://doi.org/10.1016/j.rser.2018.05.069