‘PHL needs more transmission facilities’

By Lenie Lectura September 2, 2021
https://businessmirror.com.ph/2021/09/02/phl-needs-more-transmission-facilities/

Renewable energy (RE) players said transmission line constraint is one of the possible hindrances to achieving the country’s target RE capacity in the next 20 years.

The country is targeting a 35-percent RE share in the country’s energy mix by 2035 and at least a 40-percent RE share by 2040. The current mix is still dominated by fossil fuels at 54.6 percent; natural gas, 21.2 percent; RE, 20.8 percent; and oil-based fuel, 3.5 percent.

The National Renewable Energy Board (NREB), the advisory body tasked to effectively implement RE projects in the country, is confident that the RE share in the energy mix can even hit 50 percent by 2040.

“I’m grateful for in the openness of everyone in this industry to work out our differences and then agreeing to a common goal—a north star. That North Star for the Philippine energy mix is to have a 35-percent RE share by 2030 and, at least, 40 percent RE share by 2040.

In fact, in the NREP [National Renewable Energy Program] projection, we will get to that 35 percent RE share by 2030 and, in fact, exceed 40 percent and get all the way up to 50 percent by 2040 if there are certain policies that will be adopted to make sure that we get there,” said NREB Chairman Monalisa Dimalanta during a forum titled “The Future Energy Show Philippines” in which she talked about RE adoption in the country.

One way to achieve this, she said, is to increase RE installations under the Renewable Portfolio Standards (RPS) policy. “In the public consultation that the DOE had two days ago, it already announced that some of these policies that we had recommended, they are adopting these policies. The first one, which is key, is really the increase in RPS percentage from 1 percent to 2.52 percent by 2023.”

RPS is a market-based policy that requires power distribution utilities, electric cooperatives, and retail electricity supplies to source an agreed portion of their energy supply from eligible RE facilities.

Solar and wind will form part of the majority of new capacity additions in the market share of RE.

When RE players were asked how they are preparing to meet the projected RE numbers, Solar Philippines founder Leandro Leviste cited concerns over the lack of transmission facilities.

“The balance of this 35 percent by 2030 is necessarily going to come mostly from solar and perhaps to the extent there are very good competitive wind resources as well. But I think it’s going to be a challenge of getting that supply to be delivered rather than for the demand of 35 percent being met,” said Leviste during the virtual forum. “It’s going to be a constraint of transmission for the most part rather than cost.”

Leviste said solar cost has gone down to about P3 per kilowatt hour (kWh). “It’s public knowledge that solar is now being supplied to Meralco [Manila Electric Co.] as low as P2.99/kwh and to the extent that is replicable. Therefore, anyone can draw the conclusion that solar should represent a very big share of the country’s energy mix and perhaps all of the incremental capacity that is competitively bid out.”

Leviste said there will not be enough transmission facilities for the 20,000 to 30,000 megawatts of additional solar and wind capacities.

“If there are developers that can see that there is this firm demand of five, six, seven to eight years from now then it becomes all the more viable to develop very long transmission lines that can enable these larger developments to unlock these potential developments for solar and wind,” he said.

SN Aboitiz Power Group Vice President and Chief Business Development Officer Jason Soberano also recognized the importance of transmission lines in delivering power to consumers and that the cost of RE, as well as battery energy storage system, will further go down.

“We do anticipate that the RE and battery energy storage cost will drop further in the coming years and from a commercial standpoint the lower cost per kilowatt hour over the long term justifies the transition to RE.”

You have capacities as part of that equation, but you also have transmission line constraints, the regulation, and you need to have the digital technology to sort of tie up all of these together. So, we’re going there, we see it’s going to be a combination of different technologies,” he said.