MANILA, Philippines - The Philippines will need about $2 billion in capital investments a year until 2030 to sustain energy security, an energy expert from the World Bank said.
In a video conference yesterday participated by media practitioners in Asia including the Philippines, World Bank senior energy specialist in the East Asia & Pacific region Xiaodong Wang said this forms part of the projected additional annual investment cost of $80 billion in East Asia.
“Major investments in energy efficiency and a concerted switch to renewable sources of power in China, Indonesia, Malaysia, the Philippines, Thailand and Vietnam could simultaneously stabilize greenhouse gas emissions, increase energy security while improving local environments,” the World Bank official said, citing a report titled “Winds of Change: East Asia’s Sustainable Energy Future”.
In the report, it was estimated that to reach a sustainable energy growth path, the region needs a net additional investment of $80 billion per year – a figure it describes as a “major hurdle”.
“The speed and scale of urbanization presents an unrivalled opportunity to build low-carbon cities,” Wang, lead author of the report, said.
“The technical and policy means already exist for the necessary transformation – what’s needed is political will and unprecedented international cooperation to meet the financing needs,” she said.
Asked about the prospects of growth of renewable energy in the Philippines, Wang said the country is the right direction with regard to RE development.
“I understand the government has a target to double renewable energy capacity and I also understand that the Philippines is developing the renewable energy law through the feed-in tariff and we believe that it’s an effective policy to allow the growth in renewables,” she said.
Wang said there are three basic ingredients to make RE more palatable to investors.
“In our extensive experience, we basically found three requirements to make RE work. One is to have sufficient companies with long-term power purchase agreements. Second is the mandatory off-take of utilities, and the third is that the incremental cost that will have to be paid by somebody, normally that includes the consumers. So in the renewable energy policy, we hope that these factors will be considered that would unleash private investment in RE,” she added.
On recommendations regarding the ongoing power crisis being experienced by the Philippines, Wang said there are some short, medium and long-term solutions that could be considered to address this concern.
“In terms of the power crisis, the most cost-effective shorter solution is demand-side management. For example, to employ energy efficient lighting is one of the most effective quick way to reduce demand to solve the problem in the short term,” she said.
She also noted that “over the long term, of course, you have to increase the supply capacity.” “I understand that the Philippines now has a private sector interest in renewable energy like small hydro and geothermal,” she said.
In the World Bank report, it was noted that the six major energy-using countries of East Asia could stabilize their greenhouse gas emissions by 2025 without compromising growth.
According to the report, a 10-fold increase in GDP in East Asia in the last three decades has led to a tripling of energy consumption which is expected to double again in the next two decades as the urban population increases by 50 percent and industrialization of the region continues.
The studies developed two scenarios in which development continues according to current government policies and an alternative, low carbon growth path. Under the alternative Sustainable Energy Development path, the report said renewable energy (including hydro, wind, biomass, geothermal, and solar) can meet a significant proportion of the region’s power needs by 2030.
The report also urges governments to take immediate action to transform their energy sectors towards much higher efficiency and more widespread use of clean energy before it’s too late.