Powering up remote areas with renewable energy

MANILA, Philippines - For decades, communities in far-flung areas in the Philippines remained in the dark, despite recent economic growth and a rise in tourism activity.

Presently, 30 percent of the country’s population still do not have access to electricity, according to the World Bank.

Majority of these communities are located in off-grid areas, or those which are not connected to the main transmission grid that powers the country’s main islands.

Because of the country’s geographical composition, it is difficult and very costly to transmit and distribute power especially to remote islands.

“This is our dilemma in trying to come up with a robust transmission system – we are fragmented unlike other Asian countries,” said National Power Corp. (Napocor) vice president for corporate affairs Bong Mendiola.

As a result, off-grid markets are either deprived of electricity, receive power for only 12 hours or even as little as four hours a day. These areas are also exposed to storms and other inclement weather conditions. What’s more, since communities in off-grid areas use diesel-powered generators as the main source of energy, they also bear the cost of high power despite relying heavily on government subsidy. These subsidies, in turn, are passed on to all electricity consumers in the form of universal charge for missionary electrification (UCME) to energize the so-called missionary areas or those ‘less viable’ for investment entries.

To address the decades-old problem in transmission and distribution issues, Napocor seeks to harness the power of renewable energy, particularly solar energy.

“We believe that Filipinos who live in off-grid areas are the ones who will benefit the most from renewable energy,” Mendiola said. “By using solar energy, we will be able to increase the hours of electricity supply even up to 24 hours.”

According to Mendiola, local government units in off-grid areas are clamoring for extended operating hours during  day time for their province or town’s growth and progress.

“If the energy supply is available and stable, it will create opportunities for business and trade,” he added.

Napocor is also keen in adapting renewable energy in its electrification program to help reduce UCME, translating to lower electricity bills.

“On a larger scale, harnessing RE will help us reduce the impacts of climate change, as well as secure energy future of the Philippines – the provision of an independent, sustainable and sufficient supply.

In its electrification program, which will be rolled out over a five-year period from 2015 to 2019, Napocor will  select off-grid areas, prioritizing those which have the most difficulty and the most expensive cost in terms of transmitting and distributing power, such as mountainous areas.

“We are targeting tentatively 27 areas for development, subject for the approval of the Department of Energy,” Mendiola said.

Serving as the pilot area for this electrification program is Limasawa, a sixth-class municipality in southern Leyte. Napcor hopes to finish the bidding process this year in order to begin development by 2015 and implementation by 2016.

For this project, the agency will use a hybrid of solar photovoltaic (PV) systems combined with diesel as the energy source. “With this, the solar energy will be able to deliver 10 megawatts, translating to additional eight hours of electricity per day,” Mendiola said.

Napocor hopes that its  electrification program will spark action from the private sector to infuse investments in solar PV and other forms of renewable energy.

Currently, the government offers incentives under the Renewable Energy Act of 2008, such as income tax holidays, 10  percent corporate tax rates, duty-free importation of renewable energy machinery and equipment, tax exemption on carbon credits, zero percent VAT on renewable energy sales and purchases, and cash incentive of 50 percent of the UCME in missionary areas.

With these, the only remaining barriers to achieve the full potential of renewable energy is the general lack of understanding, which organizations like Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) wish to overcome.

Together with the Department of Energy and Climate Change Commission, GIZ hopes to improve the perception of renewable energy and propel the shift towards a more sustainable energy supply in the Philippines.