Shift to RE in SPUG areas to generate savings

    Now affordable. The IEEFA study says solar PV plus lithium-ion batteries can now reliably deliver power at a significant discount.

    Shifting power source from diesel to renewables in areas not connected to the grid could save government P13.5 billion and electric cooperatives (ECs) P1.4 to P1.7 billion over the next decade, a study of the Institute for Energy Economics and Financial Analysis (IEEFA) showed.

    “Department of Finance Secretary Carlos Dominguez, as the chair-designate of the Climate Change Commission and ex-officio chairman of the National Power Corp. (NPC) can help the Small Power Utilities Group (SPUG) realize the country’s vision to provide not only clean but also reliable, secure and affordable power for residents of small island grids,” said Sara Jane Ahmed, IEEFA energy finance analyst, author of the study.

    NPC is mandated to provide power at subsidized rates to SPUG areas which are far-flung locations, usually island regions where power cannot be relayed from the grid as transmission lines are difficult to be build.

    The study added at present, most power plants built in these locations are unreliable diesel-fired generators which cost more than new high performance renewable units due to the transport costs incurred in importing diesel.

    “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,” Amhed said.

    “The NPC’s case for diesel generation rests on a growth agenda premised on unsupported arguments that diesel is the only way to reach the off-grid market. This is simply not the case. Our study shows renewables can effectively supply off-grid markets, realizing significant savings for electric cooperatives burdened by a lack of financial reserves,” she added.

    The study said solar PV plus lithium-ion batteries can now reliably deliver power at a significant discount apart from the possibilities in tailoring RE solutions depending on local grid characteristics and available RE sources. – Jed Macapagal