THE use of coal as a source of power may be out of the picture in the next five years to ten years as the use of renewable energy (RE) technologies has become prevalent among energy players in the country.
Matthew Carpio, transaction advisory head of Climate Smart Ventures Pte. Ltd., said energy firms recognize that they have to place their bets on RE projects today, despite some challenges.
'Coal is out of the picture… because of this whole eye-opening event of the volatile fossil fuel costs,' Carpio said during a webinar organized by the Institute of Corporate Directors. 'So it makes sense to have power sources that you can rely on. As long as your projections are correct and you are putting your assets in the right place, you can place your bets accordingly and provide consistent 24/7 power from renewable energy.'
However, the executive said, the country must ensure 'that the grid is ready to absorb more renewable energy.'
Carpio said the reality of energy storage systems, or batteries, fills the gap that constrains the increase of the share of RE in the power-generation mix of the Philippines.
With batteries, the variability of renewable energy becomes a non-issue and 24/7 power with renewables is now possible, according to him.
Power-sector players such as firms led by the Ayala and Aboitiz groups have already been leading in solar deployment, Carpio said. These storage systems are critical to retiring coal and crucial to ensuring the Philippine grid can absorb more renewable energy sources, which happen to be more affordable, secure and reliable compared to fossil fuels such as coal, bunker and diesel.
As an archipelagic country, this is true for unserved or underserved small island grids and off-grid areas, as well as main island grids, he explained.
'[RE] and energy storage system (ESS) applications in small island grids are already very competitive,' Carpio said adding it is also projected that, with the right policies in place, RE and ESS will also be cost competitive for 24/7 operations in on-grid areas by as early as 2027 or sooner.'
The Department of Energy (DOE) pushed last year to increase the share of RE in the country's power generation mix by 35 percent in 2030, and 50 percent in 2040.
To achieve this target, the DOE said it must increase the annual minimum increment of its renewables portfolio standards from 1 percent to 2.52 percent beginning 2023, said Jonathan B. Teodosio, senior science research specialist of the DOE.
'The increase in the annual RPS percentage opens more opportunities for developers to invest in RE power projects,' Teodosio said.
Apart from further developing RE, energy-efficiency methods are also crucial in future-proofing national and global economies, according to Carpio.
Citing the International Energy Agency, Carbon Trust Singapore Pte. Ltd. Senior Associate Kalyani Basu said energy efficiency accounts for 38 percent cumulative emissions reductions by 2050 and has the potential to reach $550 billion worth of annual investments in the 2030s.