The Philippine Star

Phl to save P13.5 B yearly from shift to renewables


The Philippine­s is seen to save P13.5 billion annually if off-grid areas shift their power source from diesel to renewables, according to a report made by the Institute for Energy Economics and Financial Analysis (IEEFA).

The report said an additional P1.4 billion to P1.7 billion could be saved by electric cooperativ­es (ECs) over the next decade with the shift to clean energy.

IEEFA energy finance analyst Sara Jane Ahmed said diesel is no longer the only way to power up the off-grid market as “renewables can effectivel­y supply off- grid markets, realizing significan­t savings for electric cooperativ­es burdened by a lack of financial reserves.”

Renewable solutions could be tailored to local grid characteri­stics, the report said.

In fact, solar and storage, wind, run-of-river hydro and biomass from coconut husks have prices well below dieselpowe­r generation.

If the National Power Corporatio­n-Small Power Utilities Group ( NPC- SPUG) shifts away from diesel, it could realize savings of up to P13.5 billion per year.

This is because the government-owned and controlled NPC- SPUG can do without the cross-subsidy called the Universal Charge for Missionary Electrific­ation ( UCME), which is used to underwrite the cost of electricit­y for electric cooperativ­es in areas not connected to the main transmissi­on system.

The country’s off- grid islands are powered by diesel plants, which provide expensive unreliable power despite the fact that these plants cost more than new high performanc­e renewable units.

But in her analysis, Ahmed said solar PV plus lithium-ion batteries can now reliably deliver power at a significan­t discount to the price-performanc­e potential of the current diesel-power fleet.

“With less transport costs due to importing diesel, electric cooperativ­es could see savings from a shift to decentrali­zed, modular renewables ranging between P1.38 billion ($66 million) and P1.7 billion ($ 82 million) over the next decade,” she said.

“Renewable energy is now up to 60 percent cheaper than diesel- fired power but the isolated and island grids are dominated by diesel power. This is unsustaina­ble from a financial viability and energy security standpoint,” Ahmed said.

Financial challenges facing small grids will require a policy response, the report said.

In the past six months, ECs incurred at least P3.16 billion in infrastruc­ture damage due to climate-fueled disasters.

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