March 6, 2019 Read More →

Philippine utilities boost gas and renewables’ share in energy mix

Asian Power:

The race to build a groundbreaking liquefied natural gas (LNG) terminal in the Philippines is heating up as the country faces the anticipated drop in production at the Malampaya gas field by 2024. The government also eyes ramping up the exploration of renewable energy sources, with solar photovoltaic (PV) systems looking particularly attractive, to address an expected surge in energy demand and currently one of the most expensive electricity rates in Southeast Asia.

In early December, Japan’s Tokyo Gas signed a joint development agreement with the Philippine-listed First Gen Corporation to build an LNG terminal in the province of Batangas. The Japanese natural gas producer and supplier will take a 20% participating interest in the project.

Aside from LNG, solar PV and other renewables have been attracting more attention from analysts that believe these could provide the country with considerable opportunities, especially amid an expected spike in demand. Bloomberg New Energy Finance’s (BNEF) Climatescope project ranked the Philippines as the sixth most attractive emerging market in the world for clean energy investment particularly for the power sector’s structure and regulations.

“Rooftop solar in the Philippines can contribute significantly to enhancing national electricity supply whilst facilitating and creating financing for a growing share of new generation capacity requirements and lowering electricity costs,” said Sara Jane Ahmed, energy finance analyst at the Institute for Energy Economics and Financial Analysis, noting that a shift towards rooftop solar will reduce the need for imported coal and diesel power. The Philippines, which has some of the highest-priced electricity in the ASEAN, could save up to $2.2b annually in its current account deficits as well as $200m per year.

“A combination of cumbersome existing regulation, outdated administrative practices, and a lack of affordable and accessible financing are hindering the broad adoption of rooftop solar,” warned Ahmed. To bolster deployment of rooftop solar, she recommended developing cost-effective net metering government policies, easing approval processes, strengthening access to financing, and rolling out cheaper behind-the-meter integrated lithium-ion battery storage. 

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