To help the Philippine government in its goal of transitioning to a cleaner energy future, businessmen in Visayas were encouraged to consider investing in the renewable energy industry.
During the 32nd annual Visayas Area Business Conference (VABC) recently held in Panglao, Bohol, Vice Chair of the Senate Committee on Energy Sen. Sherwin T. Gatchalian appealed to the businessmen who joined the conference to invest in clean energy as the government is focusing on utilizing competitive renewable energy (CRE).
The Philippines aims to increase the RE share in its current energy mix to 35% by 2030 and 50% by 2040.
Gatchalian said it takes time to set up RE facilities and the government would not be able to achieve the said target on its own.
Currently, 60% of the energy source in the Philippines comes from coal power, and 79% of the coal used by the coal-fired power plants in the country are sourced from Indonesia, he added.
This means the country is subject to power supply and price shocks should coal suppliers hike their prices.
Declining energy security
The Philippines has shown a declining trend in energy security from 61.36% in 2021 to 59.67% in 2022 based on the World Energy Trilemma Index 2022.
The index covers import dependence, diversity of electricity generation, and energy storage.
According to Gatchalian in a press statement, even non-oil and gas-producing countries fare better than the Philippines in energy security ranking considering that the Philippines is an oil and gas producing country.
Examples of these non-oil and gas producing countries are Finland, Sweden, Slovenia, Estonia, Portugal, Switzerland, Uruguay, Kenya, Bosnia and Herzegovina, Lithuania, and South Korea.
South Korea garnered the highest score of 62.15% among non-oil and gas-producing economies in Asia. By comparison, the Philippines posted a score of 59.67%.
"We can glean from the data that even non-oil and gas-producing countries across the globe are able to score high in energy security. The key is pursuing diversification not just of energy sources but also diversification in terms of suppliers, which is just as crucial," Gatchalian said.
He noted that the country is currently 50% self-sufficient in energy supply, imports 100% of its coal requirement to meet the rest of its electricity requirement, and that the only source of natural gas is depleting.
This as the demand for electricity in the country goes up by an average of 6.53% a year, in tandem with economic growth.
This means the country needs to produce an additional 66,937 megawatts of additional power supply to sufficiently address electricity demand moving forward, said Gatchalian.
Power woes
In April 2023, multiple power interruptions plagued Visayas after power transmission operator, the National Grid Corporation of the Philippines (NGCP), reported that some power plants got disengaged from the transmission system.
The NGCP pointed to a distribution utility-owned line that tripped “and caused power plants to disengage from the transmission system,” affecting the Visayan grid.
Days after, a generation facility also tripped and created another system disturbance in the grid.
He stressed that the spate of power interruptions in the region is not due to power supply but rather on the transmission and delivery by distribution utilities such as electric cooperatives.
Gatchalian disclosed that if all power plants and power generators in the Visayas were working efficiently barring preventive maintenance activities or transmission line issues, there would be 1,600MW of excess power in the Visayas.
However, he said this standby power would possibly be depleted if the El Nino phenomenon would affect water supply in the region, affecting the efficiency of hydro power plants.
NGCP has also reported that if the dry spell also affected the hydro power plants in Luzon, the excess power in the Visayas grid would be transmitted to Luzon to cover their energy deficit.
As of June 2023, there are 72 grid-connected power generators in the Visayas grid with 3,972.3MW of installed capacity based on records from the Department of Energy (DOE).
Mindanao Visayas Interconnection Project
Gatchalian is hopeful that power supply in the Visayas and across the country would become more stable with the P52-billion Mindanao Visayas Interconnection Project (MVIP), which NGCP successfully energized earlier this year.
An initial load of 22.5MW was carried by the high voltage submarine and overhead lines from Mindanao to Visayas during its energization on April 30, 2023.
"We expect to gradually increase the MVIP's transfer capacity to 50MW by mid-May, and 112MW by the end of the month, before energizing to its full transfer capacity of 450MW by the third quarter of this year," NGCP explained.
The MVIP is composed of a 184 circuit-kilometer (ckm) High-Voltage Direct Current (HVDC) submarine transmission line connecting the power grids of Mindanao and Visayas with a transfer capacity of 450MW expandable to as much as 900MW.
Renewable energy collaboration
To gain more ground in its measures to strengthen the renewable energy sector in the Philippines, the DOE has welcomed the energy cooperation between Portugal and the Philippines in the areas of alternative fuels, like hydrogen.
On July 27, 2023, Portuguese Foreign Minister João Gomes Cravinho, in his courtesy visit to Energy Secretary Raphael P.M. Lotilla, cited the interest of Energias de Portugal (EDP) and EDP Renewables (EDPR) to invest in the Philippines’ RE projects.
Portugal, as an early starter in RE, has similar challenges with the Philippines and is interested in DOE’s approach in developing and utilizing the country’s RE sources.
Cravinho said the Portuguese electric utilities company, EDP, generates 74% of its energy requirements from renewable sources and aims to be 100% green by 2030.
EDPR was established to manage, operate, and invest in the renewable assets' portfolio of the EDP.
It is the world’s fourth-largest wind energy producer and is a global leader in onshore wind farms.
Both wish to expand their presence in Southeast Asia through investments in the Philippines.
For his part, Lotilla shared the areas for cooperation such as the development of offshore wind (OSW) and floating solar, hydrogen and ammonia production using RE, liquefied natural gas (LNG) importation, and improvement of transmission and distribution lines in the Philippines to support its economic development and energy transition agenda.
He also expressed his interest in the experience of Portugal in repurposing and incentivizing the transition of coal power plants by using other alternative fuels such as co-firing with hydrogen or ammonia. (RAHC/RMN/PIA7)
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