The Energy Road Not Taken: How the Philippine Energy Plan can lead to a coal-free future within a few years

This piece is a briefing paper for incoming officials who will be elected during the May 9, 2016 elections who will be appointed subsequently.

Its message is basic: the government expects demand for electricity for the period 2012-2030 to grow by around 4.25% (to 23,158 MW by 2030). The details are in the government’s Philippine Energy Plan 2012-2030. PEP 2012 also includes a Philippine Energy Efficiency Project (PEEP) which targets a 200-MW savings in electricity demand annually, bringing down the growth rate in demand to around 3.28% (19,558 MW by 2030). To keep the grid reliable, required reserves must also be added according to a government formula, making the required supply roughly 11-16% above the projected demand (21,634 MW by 2030).

The government has a National Renewable Energy Program (NREP), which targets some 9,525 MW of capacity to be installed in the planning period 2012-2030.

Our remarkable finding is that if we take the existing and committed supply as given (16,244 MW as of 2011), the NREP renewable-only targets are more than enough to provide the required supply up to 2030.

Thus, there is no need to build any new coal or other fossil-fueled power plants in the future.

For the details, please download the briefing paper.

Roberto Verzola

 

2 Comments

  1. Peter Davies
    Posted May 7, 2016 at 10:32 am | Permalink

    Great Article,
    I totally agree with the premises and conclusions, although I do have concerns about the accuracy of the Philippine Energy Plan 2012-2030. If we are to grow at 6+% GDP over the next 10 years plus cope with a population growth rate of nearly 2M per year, the forecast demand may be low. The Plan also totally ignores Solar power and underestimates wind power.

    A new plan should be commissioned by the government, but not one controlled by the utility power groups through the DOE. It should be requested from WB, ADB or similar and be unbiased, thereby giving the people and the authorities a better picture of how to solve the country’s problems.
    As has been seen recently, generation is not the only problem. Transmission and distribution problems have not been solved.

  2. Roberto Verzola
    Posted May 16, 2016 at 7:21 am | Permalink

    Dear Peter,

    In the past, government energy plans have often tended to overestimate the growth in demand. Professors at the U.P. School of Economics, for instance, modelled the relationship between GDP, population growth and a few other variables on one hand and the growth in the demand for electricity on the other hand. They say that a 7% GDP growth rate should lead to around 4.5% growth in electricity demand.

    The debate about this relationship was very important in the past era when power plants took 5-10 years to build and demand had to be projected well in advance. But it is less important today with shorter project times for solar, wind and small hydro projects, especially for rooftop solar where install times are reckoned in days. This will even be more so as consumer-level energy storage takes off and becomes more competitive.

    The emergence of distributed generation represented by rooftop solar and battery storage will ease the pressure on transmission and distribution lines. Especially if true net metering is implemented in the Philippines, and as households and commercial enterprises put more and more solar panels on their rooftops, peer-to-peer exchanges of energy among erstwhile consumers will become more common.

    Greetings,

    Obet Verzola

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