THE PHILIPPINES will need $133 billion until 2040 to implement an accelerated timeline for decarbonization, the World Bank said.
In a presentation, Feng Liu, World Bank senior energy specialist and infrastructure program leader for the Philippines, said the accelerated decarbonization scenario assumes annual reductions in carbon dioxide emissions of at least 80% by 2040 and projects electricity demand growth to be level with the current policy scenario (CPS).
CPS refers to the government’s ambitions for improving energy efficiency while also developing e-mobility and ramping up renewables on the supply side.
“The accelerated decarbonization as we described will require doubling capital investment in the power sector, almost all of the incremental investment going to variable renewable energy, particularly solar and wind,” he said.
The World Bank said that in order for the Philippines to build a foundation in the next five years for its energy transition, it must increase the number of utility-scale solar and wind projects in order to bring variable renewable energy sources to a tipping point.
Mr. Feng said that the Philippines should also pursue a liquefied natural gas (LNG) program to ensure reliable power supply while increasing the system’s flexibility for integrating renewables.
Among the recommendations by the World Bank are: prioritizing planning and investment in transmission capacity and grid flexibility; establishment of a framework to allow the early retirement of coal-fired plants and use of an appropriate carbon pricing to level the playing field between renewables and fossil fuels while generating revenues.
“A cleaner energy future is expected to be more affordable, given the savings in fuel costs and the global trends of declining costs related to deploying and integrating solar and wind power, enhancing the competitiveness of the economy,” the World Bank said in a report.
Energy Secretary Raphael P.M. Lotilla said the government’s clean-energy ambitions highlight the need for modernized transmission infrastructure.
“The government will facilitate the upgrading and modernization of the transmission and distribution lines to support an efficient transition to cleaner energy,” Mr. Lotilla said.
Mr. Lotilla said that to achieve the energy transition, the government must resolve transmission congestion by “adding transmission lines or avoiding subsidies that cause the build-up of excess capacity.”
“I pose the challenge for our development partners therefore to be up to speed in delivering the needed transmission capabilities,” Mr. Lotilla said.
Energy Undersecretary Rowena Cristina L. Guevara said that the Philippines is in a “mad rush” to put up generating capacity to meet increasing demand.
Ms. Guevara said that with the growing population, the Philippines is now relying on renewables to ensure energy security.
“I would say well, solar is going to need an energy storage system such that it can do the work as baseload. But you know, we have several types of renewable energy available,” she said.
Ms. Guevara said hydropower and geothermal plants can take up baseload duties in order to aid the transition away from coal-fired plants. She added that LNG, which is being put forward as a transition fuel, will also play a crucial role.
“Like Ilijan (a gas-fired power plant in Batangas) started running 600 megawatts (MW) today (Thursday). It will reach 1,200 MW by June 9,” she said, noting that decreasing the system’s carbon footprint will require replacing such plants. “But we know for a fact that there are technologies available.”
The Ilijan power plant is deemed vital to the power supply. Its gas contract with operators of the Malampaya field expired in June 2022. The reopening of Ilijan comes after the successful delivery of LNG fuel.
The Department of Energy (DoE) said it is planning to conduct an auction for offshore wind and other renewable projects in 2024.
According to service contract awardees, “Next year would be a good time for them. So, we plan to hold an auction that includes offshore wind by next year,” Ms. Guevara said.
The DoE is set to conduct the second round of green energy auctions by June 19, with 118 qualified companies expected to bid for 11,600 MW in renewable energy capacity.
Last month, the department said it awarded 65 offshore wind contracts with a combined potential capacity of 51.23 gigawatts, which it deemed sufficient to supply future energy demand.
Under the Philippine Offshore Wind Roadmap, the Philippines has an estimated potential capacity of 178 GW from offshore wind resources. This is expected to help achieve the target of increasing the share of renewables to 35% of the energy mix by 2030 and 50% by 2040. — Ashley Erika O. Jose