Growing use of airconditioners to drive energy peak demand

MANILA, Philippines — More Filipino households and businesses are expected to install more airconditioning (AC) systems, driving peaking requirements over the next three decades which could be served by renewable energy projects, according to BloombergNEF (BNEF).

Based on the latest New Energy Outlook 2019 (NEO) by BNEF, power demand in Southeast Asian countries Indonesia, Malaysia, Philippines and Thailand are projected to grow by 152 percent in 30 years.

In particular, demand in Indonesia and the Philippines are seen to rise by over 200 percent due to growing population and continued electrification.

The study also showed that, as the economies expand and spending power increase in these two countries, local households and businesses are installing more ACs for cooling requirements and productivity.

“In Singapore and Malaysia, there is higher penetration of AC already in the system. For this countries, we don’t expect a lot of demand coming from them,” BloombergNEF Southeast Asia energy analyst Caroline Chua said during the Future of Energy and Mobility Executive Forum yesterday.

But countries like Philippines, Indonesia, where AC penetration is relatively low at the moment, we expect that as countries develop, households get wealthier, businesses get bigger, these companies and households will start looking to introduce AC,” she said.

The higher AC ownership in these two countries will drive energy demand, especially mid-day.

The BNEF study showed that the higher in peak demand requirements calls for increase in flexible capacities in the system to meet changes in demand.

“This demand helps support transition of power system towards renewables, particularly solar,” Chua said.

In the region, coal is an unchallenged power source as it remains as the cheapest source of power.

In the Philippines, coal and gas dominate dispatch in the system which supply most of the country’s demand.

This presents an opportunity for the country to further tap renewables to meet peaking requirements as BNEF’s report said that in approximately two-thirds of the world, wind or solar now represent the least expensive option for adding new power-generating capacity.

One reason is that wind and solar will be capable of reaching 80 percent of the electricity generation mix in a number of countries by mid-century, with the help of batteries.

“Our power system analysis reinforces a key message from previous New Energy Outlooks – that solar photovoltaic modules, wind turbines and lithium-ion batteries are set to continue on aggressive cost reduction curves, of 28 percent, 14 percent and 18 percent respectively for every doubling in global installed capacity,” NEO lead analyst Matthias Kimmel said.

“By 2030, the energy generated or stored and dispatched by these three technologies will undercut electricity generated by existing coal and gas plants almost everywhere,” he said.

According to NEO, projected growth of renewables through 2030 indicates that many nations can follow a path for the next decade and a half that is compatible with keeping the increase in world temperatures to two degrees or less without introducing additional direct subsidies for existing technologies such as solar and wind.