The Philippines, an archipelago nation of 7,461 islands, has the chance to modernise its power-generation systems, which rely on imported diesel fuel, by embracing solar- and wind-powered island grids, a new report has found.
Small island grids represent a largely overlooked opportunity for investors in renewable energy and storage that could readily replace imported diesel generation throughout the Philippines and supply affordable, reliable, more efficient, more secure, and cleaner power, according to a new report published by the U.S.-based Institute for Energy Economics and Financial Analysis (IEEFA) and Manila-based Institute for Climate and Sustainable Cities (ICSC).
In what it calls a win-win situation, the report estimates the need for at least $1 billion in private investment in the near term to upgrade its power system in this way. Moving in this direction, however, will have the benefit of substantially diminishing cross-subsidies of at least $200 million borne by ratepayers on the main grids annually.
The research suggests that a reasonably swift transition to renewable energy is feasible across these islands and that it can be driven largely by market forces. The core policy question is how the government can speed this process.
According to the findings, many of the archipelago nation’s small islands cannot access larger electricity grids. Mini-grids powered by diesel and oil generators serve approximately 800,000 households, but there are frequent blackouts. Less than 10 percent the country’s small islands have 24-hour electricity, while more than 70 percent have less than eight hours of electricity a day, according to the ICSC. Island electric cooperatives – small, customer-owned utilities controlled by locally elected boards – lack incentives to procure cheaper sources of generation and implementation of a 2008 law meant to promote the development of renewable energy is slow.