Replacing diesel generators with renewable energy sources in small islands can help the Philippines save as much as P10 billion (US $200 million) annually, said a report published yesterday.
According to a new report from the Institute for Energy Economics and Financial Analysis (IEEFA) and the Institute for Climate and Sustainable Cities (ICSC), investment in small island renewables in the country will require at least $1 billion from private investors in the short term. These costs will be balanced out by saving the $200 million a year.
Because many of the Philippines’ small islands have no access to large grids, they are usually served by mini-grids powered by generators that run on imported diesel and bunker fuel.
“Many small island grids served by diesel generators suffer from rolling blackouts and unplanned power outages as a result of grid instability, inadequate generation capacity, and lack of subsidized fuel,” the report said.
Getting power to these islands cost over P60 billion in subsidies even if they only comprise six percent of the total energy demand.
Of these small islands, 22 of 233 have 24/7 electricity while more than 70% have less than eight hours of electricity per day.
Solar power costs have fallen by 90% since 2009, while wind power generation costs have declined by 50% since the same year.
“Barriers to small island grid uptake of modern renewable energy power include outdated regulations that have not kept up with technology. Indeed, the Philippines presents a prime example of how techno-economic change has outpaced government regulation,” the report said.
There is a lack of incentives for electric cooperatives in these islands to gather cheap sources of electricity as well.
“The Philippine Renewable Energy Act of 2008 has spurred international and local interest in renewable investment, but uneven and uncertain implementation pose formidable barriers.”
The authors of the report are also urging the Department of Energy (DOE) to direct the National Power Corporation’s (Napocor) Small Power Utilities Group (SPUG) to hasten the hybridization of its power plants and install as much renewable energy-powered systems.
“In short, small island grids represent a largely overlooked opportunity for investors in renewable energy and storage than can readily replace imported diesel generation throughout the Philippines,” it said.
“Modernization of small island power systems through the uptake of renewables will supply cheaper, efficient, secure, cleaner power,” the report added.