Why renewable energy has the potential to power the Philippines’ future

The Philippines adopted an ambitious national goal to increase the share of renewable energy in its power generation mix to 35 percent by 2030. New policies and technologies can help the nation enhance its energy security, say industry experts.

Luzon is the Philippines' largest and most populous island. The Malampaya Natural Gas Field, one of the nation’s sources of natural gas and responsible for powering a third of Luzon, is estimated to run dry by 2027. Image: AR via Unsplash

The Philippines is facing the threat of an energy crisis. With one of the nation’s sources of natural gas – responsible for powering a third of Luzon, the country’s largest island and home to more than half (57 per cent) of its total population of more than 110 million people – estimated to run dry by 2027, the pressure is on the archipelagic nation to shift its reliance to renewable sources of energy.

The issue is compounded by the country’s growing population and some of the region’s highest energy tariffs. Failure to shift to renewables will increase the nation’s dependence on imported fossil fuels and result in steeper electricity costs, which are already among the highest in Asia. The increase in greenhouse gas emissions from the continued burning of fossil fuels may then lead to more climate-induced extreme weather in the Philippines – already a victim of rising sea levels, droughts and intensifying typhoons.

Fortunately, there is some progress being made, with the country hoping to leverage new forms of technology and its wealth of natural resources to ensure sustainable energy security well into the future.

For example, in the Department of Energy’s (DOE) 2020-2040 Power Development Plan, ambitious goals have been laid out for 35 per cent of the country’s energy mix to be renewable by 2030.

Under the plan, this will increase to 50 per cent 10 years after, requiring an additional 102 gigawatts (GW) of capacity by 2040, including 27 GW of solar, 17 GW of wind, 6 GW of hydro, 2.5 GW of geothermal and 364 megawatts (MW) of biomass.

Various plans and policies have been drawn up to achieve this goal, with strong collaboration between the government and energy stakeholders key to success, with hopes pinned on innovative technologies to stabilise the nation’s energy grid year-round.

Developing new policies

“We need to identify how to access investors within the renewables market. So we are developing policies that enable technologies to participate in the government’s programme of increasing the renewable share by 2030,” said Mylene Capongcol, assistant secretary of the DOE, during her opening keynote address.

She was speaking at ‘Driving the future of renewable energy in the Philippines’, an event organised by Yokogawa Philippines in partnership with Eco-Business, to discuss how existing and innovative new solutions are driving the country’s renewable energy transition. Yokogawa Philippines is a subsidiary of Yokogawa Electric Corporation, a Japan-based multinational company that specialises in industrial automation and control solutions.

Capongcol said the country is currently revising its Green Energy Option Programme (GEOP), which lets consumers decide whether to use renewable energy resources for their electricity requirements. Currently, it is only available to consumers who use 100MW or more a month.

For context, the average household in the Philippines consumes a monthly amount of around 248 KW of electricity for purposes such as lighting, cooking, recreation, and air conditioning, according to figures from market research portal Statista, citing data from the International Energy Agency.

“The GEOP is designed to provide a market to our renewable energy developers, and there are different technologies included within,” Capongcol said, noting how the programme will be revised to be more inclusive. “We’re currently carrying out studies to make it available to residents who consume less than 100KW.”

To expand the programme’s reach, residential buyers should be allowed to choose their supplier via an online platform, noted Miguel Lorenzo de Vera, head of new business and technologies at Energy Development Corporation (EDC) and a member of the EDC’s green financing programme Net Zero Carbon Alliance.

“In some US states, people have the option of switching their electricity provider each month. Say I want to support a particular solar company this month – I can choose to get my power from them. I can view prices and do all of this online,” he said. “This technology is needed for the next step of development.”

According to the US Energy Information Administration, as of 2022, there are 15 states that offer electricity consumers the option to use renewable energies to power their homes or businesses.

To narrow the energy gap and promote renewables, the government is also easing foreign ownership within the sector. “Foreign investors will be able to fully own biomass, wind, and solar power projects in the country,” stated Capongcol, adding that government approval is needed to extend this to hydropower and geothermal energy.

Adopting renewable technologies

Utilising new technologies will also help the Philippines hit its energy goal. Buddy Bocarile, business unit manager at Yokogawa Philippines, discussed the use of large-scale battery storage units. “One solution is to provide additional [energy] storage, which is a key resource that people can use when in need,” he said, as stored energy can prove especially useful during times of bad weather.

Capongcol said the DOE recently finalised a draft of the energy storage system circular to spur more investor-friendly energy storage systems countrywide. “Battery energy storage is considered renewable, particularly generators,” she said. “Once fully integrated with renewable energy, this will help to balance the grid.”

Another pioneering solution is from PXiSE (pronounced as ‘pice’), a Yokogawa-acquired company that allows grid operators to manage unlimited renewables and distributed energy resources while providing safe and reliable power.

“We’re essentially able to use the software as an operational planning tool by injecting more solar or any renewable generation asset and weather forecast information. We then use machine learning techniques to look ahead 24 hours in advance, so people can schedule resources accordingly,” explained Lee Ucich, regional engineering lead at Yokogawa Australia / PXiSE Energy Solutions.

Bocarile said the technology behind PXiSE is also key to stabilising the grid as more renewable energies are added to the mix. “Putting many forms of renewable energy in the base load can make the grid unstable,” he said. He added that this technology can be used to balance the degree of intermittency from renewable energies that might make an energy grid unstable by predicting any variables and plugging the gap.

Harnessing geothermal energy

The Philippines is also able to leverage its geothermal energy potential. To illustrate, 42 per cent of the nation’s total energy is generated via renewable energy through EDC, the country’s largest renewable energy generation company.

In October 2022, DOE issued a preferential dispatch, which in the energy industry is a policy used to prioritise the distribution of electricity from certain sources over others. Geothermal energy is now also considered a priority dispatch, along with energy generated from biomass, solar and wind.

Lorenzo de Vera hopes to further the nation’s shift to renewables and briefly spoke on EDC’s plans to develop four geothermal power projects with a total capacity of 90MW. “This is crucial for the country’s energy mix as the plants can supply energy 24 hours a day. Geothermal will help provide stability as we introduce more solar, wind and other intermittent renewables,” he said.

While the event drew to a close on a positive note, Bocarile emphasised that much still needs to be done for the Philippines to harness its natural resources to meet its goal of having 35 per cent of the country’s energy mix to be renewable by 2030.

“We’re very rich in terms of indigenous sources of energy,” Bocarile highlighted. “But it is essential that we stabilise these resources and use technological solutions to do so.”

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