The country’s energy sector would have to quickly grow to support the goal of ending poverty and becoming a prosperous middle-class society by 2040, the World Bank said.
In its latest report, World Bank said that the Philippines’ energy demand is seen to triple between 2020 and 2040. It said that the country’s energy sector would need to overcome the challenges of meeting an increasingly growing demand, and at the same time, transforming its fossil-based infrastructure while making sure that power supply is secure, reliable, and affordable.
The World Bank noted that the Philippines can benefit from an energy transition leaning towards low and zero-carbon alternatives, adding that a clean energy transition may improve the country’s energy security by amplifying the use of indigenous and renewable energy sources, on top of reducing dependence on imported fossil fuels.
The study noted that a cleaner energy future may be more affordable, following global trends on lowering costs in terms of deploying and integrating solar and wind power.
“Given that an increasing number of multinational firms are setting their own net-zero targets and examining their supply chains to achieve their climate commitments, greening the power supply through an energy transition would help the Philippines stay competitive and attract foreign investments,” the report said.
Reducing fuel consumption, especially through electrifying urban transport and reducing the use of coal-based power generation would also improve public health, the World Bank said.
World Bank senior energy specialist and infrastructure program leader for the Philippines, Feng Liu, said that the country’s energy sector is heavily dependent on imports and is also among the highest electricity prices in the region.
Regardless, the country has an advantage in the abundance of renewable energy resources, as well as its private-sector-driven development.
Liu said that the Philippines would need international help if it’s pushing for accelerated decarbonization in its power sector, especially in the aspects of providing technical and financial assistance.
In building a solid foundation to accelerate the energy transition in the country, World Bank recommended increasing the implementation of utility-scale solar and wind projects to bring RE sources to a tipping point in power generation.
Furthermore, pursuing LNG-to-power programs in securing reliable power supply and increase system flexibility was also recommended by the World Bank.
The World Bank also noted the importance of improving power system planning in order to better guide energy transition investment decisions, as well as the creation of a framework to address the early retirement of coal-fired power plants and ensure a just energy transition.