Solar power could help the Philippines avoid about US$28 million in coal and gas imports by 2030, easing the blow from Middle East-driven energy price spikes on a country already resorting to staggered fuel price hikes with oil firms, a new study found.
In a report released on 4 May, research group Zero Carbon Analytics estimated that the Philippine energy plan’s target of at least 9.5 gigawatts (GW) of solar capacity by the end of the decade, the goal from its most conservative energy scenario, would enable the country to replace a significant share of fossil fuel generation with domestically produced clean energy. The calculation is based on average Newcastle coal futures and Asian liquified natural gas (LNG) prices on the first week of March and the last week of April respectively.
The analysis attributed about US$23.6 million in avoided spending to gas imports and roughly US$4.5 million to imported coal, assuming both fossil fuel sources are used instead of solar, in line with their shares in the Philippines’ power mix.
“Prioritising clean energy in its power mix would help the Philippines avoid the impacts of fluctuating global energy prices. The avoided costs could instead help fund policies which support the national development plan,” said researchers.
The findings come about a month after the Southeast Asian country declared a national energy emergency in response to a global oil shock triggered by the Middle East conflict, also moving to ramp up coal generation. The national government has been working with local oil companies to gradually adjust fuel prices, as a way to lessen the impact of price hikes.
Oil prices in the Philippines have surged in steep weekly jumps since the war broke out in the end of February, escalating with multiple hikes over roughly a month.
The pressure is acutely felt in the country, where the power mix is dominated by coal and gas and generation costs account for around 60 per cent of electricity bills, that are passed directly on to consumers, said Yu Sun Chin, senior Asia regional researcher at Zero Carbon Analytics.
“Scaling up solar is one of the fastest and most effective ways to reduce this exposure, cutting costs and strengthening energy security. Staying on track to meet the 2030 solar target and even surpassing it will be critical to protecting Filipinos from future price shocks,” said Chin.
Southeast Asia’s responds to crisis with solar, storage and EV’s
The Philippines has responded to the crisis not only by staggering fuel price hikes but also by ramping up clean energy, showing the strongest push in Southeast Asia to upgrade grids and storage for new renewables, according to Zero Carbon Analytics.
It activated 250 megawatts (MW) of solar and 450 megawatt-hours (MWh) of battery storage in March, creating the country’s largest operational storage system, and is fast-tracking about 1,471 MW of renewable and storage projects targeted to come online by April.
Across the region, Indonesia has made the biggest single new capacity pledge, vowing to deploy 100 GW of solar in the next three years.
Thailand has committed the most financing, offering about US$154 million in soft loans for households to install rooftop solar or buy electric vehicles (EVs), with support capped at US$61,000 per person. Laos has cut EV registration and service fees by 30 per cent and Cambodia has reduced import tax on EVs and solar systems to zero.
Vietnam stands out for its moves to phase out fossil fuels, including updated Just Energy Transition Partnership plans to retire coal plants and a request from Vingroup to drop an LNG-to-power project.
Malaysia has talked up the need for large-scale battery storage to integrate more renewables but has yet to announce grid-specific measures tied to the war, though it plans 18 waste-to-energy plants that could generate up to 600 MW by 2040.
Meanwhile, Singapore and Australia, whose energy systems are less exposed than their neighbours’, issued a joint statement on energy security to bolster their energy transition, with Singapore relying on a mix of regional pipeline gas and diversified LNG imports, and Australia benefiting from its role as a major exporter of LNG and coal even as some higher costs filter through domestically.
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