MANILA, Philippines -Belgium-based Enfinity sees vast potential in putting up solar-hybrid power projects in off-grid areas in the country, particularly in National Power Corp’s Small Power Utilities Group (SPUG) areas, which will provide cheaper electricity costs than relying solely on diesel-fired generating facilities.
In a statement, Enfinity Asia Pacific Holdings Ltd. business development director William Ruccius said solar hybrid deployment along SPUG areas would provide a cost-competitive solution for off-grid areas.
“Napocor has 280 SPUG power plants. They range in size from 0.04-megawatt to about 10 MW,” he noted.
Currently, these off-grid areas source their electricity from diesel-fired power generating facilities that tend to be more expensive.
With hybrid solar and battery storage system as back-up technology, Enfinity noted these areas could opt for less costly solution while also lessening their carbon footprints.
Ruccius said the true cost of generation rate (TCGR) in these areas typically range from P14 to P45 per kilowatt hour, and electricity is just being made available to them eight to 16 hours a day.
The electricity cost is also covered by subsidies being paid by all consumers.
But as cheaper alternatives such as hybrids will be provided, the level of subsidy for SPUG areas may also be reduced, the company said.
Dr. Platon Baltas of Enfinity Hellas said photovoltaic (PV) prices are expected to drop even more, which should be taken advantage of.
He added “hybrids can provide 24/7 service at affordable cost for houses connected to ‘bad’ electricity grids.”
In the Philippines, however, Baltas said “financing is the biggest challenge if the appropriate framework is not in place.”
There are also still some commercial and market risk issues that need to be addressed in the regulatory and policy frameworks of the industry before hybrid solutions can become viable in these areas, Ruccius added.
In particular, he cited the credit-worthiness predicament of many electric
cooperatives, including those that have been catering to the service needs of the SPUG areas.
“The problem here is that many electric cooperatives are not credit-worthy and it is difficult to get paid. The qualifying third party provides the generation and also takes over the distribution function, so it collects the money and pays itself,” Ruccius said.