IFPRI: PHL could supplement 57%-60% of its energy needs with renewables by 2040

In Photo: Wind turbines at the wind farm in Bangui, Ilocos Norte, in northern Philippines

The Philippines could supplement 57 percent to 60 percent of its energy needs with renewables by 2040, by adopting a strategy to increase renewable-power generation through carbon taxes or subsidies for renewable energy, a new study from researchers at the International Food Policy Research Institute (IFPRI) said.

“The Philippines’s current energy-supply mix must be diversified to minimize import dependency on fossil fuels and meet the country’s energy needs,” said Alam Hossain Mondal, a researcher at IFPRI and lead author of the study.

“Without diversification, fossil fuel dependency will grow sharply, by an average rate of 7 percent per year, and CO2 [carbon-dioxide] emissions could amount from 43 million tons in 2014 to 144 million tons by 2040,”Mondal said in a news release sent to the BusinessMirror.

Coauthored by IFPRI’s Mondal, Mark Rosegrant, Claudia Ringler, Angga Pradesha and Rowena Valmonte-Santos, the research assesses the feasibility of four alternative-energy development strategies for diversifying the Philippines’s energy-supply mix and meeting its future electricity demands, between 2014 to 2040. The study was recently published in the journal, Energy. The study shows that by taxing carbon and subsidizing investments in renewable energy, the country could successfully divert from fossil-fuel dependence, meet its energy demands and reduce CO2 emissions by up to 50 percent, IFPRI said.

It also found that the long-term cost of pursuing these alternatives is not higher than maintaining current high levels of dependency on fossil fuels.

These findings have significant implications for the government, and its agenda to reform the country’s carbon-dependent model with renewable alternatives and commitment to the Paris Climate Change accord.

In a scenario relying on incentives from carbon taxes, a tax of $10 per ton of carbon emitted would be imposed in 2020, and increased by $10 increments each decade.

As a result, coal-based energy would shrink from 2,243  terawatt hours (TWh) (under the current trajectory) to 1,553 TWh by 2040. The country’s overall capacity to generate power would also increase, which could support development goals.

In another alternative, the renewables-subsidy scenario, the government would incentivize investments in renewable energy and provide subsidies ranging from 3 cents to 6x cents per kilowatt hour.

This model adds over a 1,000 TWh to the renewable-power sector during 2014 to 2040 and forces a 35-percent drop in coal-based power usage. Electricity generation would grow tenfold, to 131 TWh in 2040 from newer technologies incorporated in this model, IFPRI added.

Energy scarcity has developmental impacts on economic growth. Current challenges in the electricity sector in the Philippines include high prices, underinvestment in generation, reduced self-sufficiency and expected high levels of greenhouse-gas emissions.

According to Mondal, “diversifying the Philippines’s energy supplies could, therefore, help to increase capacity and alleviate many of the developmental challenges posed by energy instability.”

Diversifying the energy model poses other benefits, such as economic stimulation and job creation.

Reductions in coal-based power generation, which occurs in all four alternative scenarios, also means reductions in greenhouse-gas emissions. The energy generated by coal-based power plants would decrease from about 32 percent in 2014 to 20 percent, and 17 percent by 2040 in the carbon-tax and renewables-subsidy scenarios, respectively.

Developing energy generation based on new, renewable sources would bear some costs, but researchers emphasized those costs are outweighed by the benefits of diversification and reduced greenhouse gases.

The carbon-tax model would lead to marginal increases in electricity prices and subsidizing renewables would require an investment of $15.6 billion.

“Each of the alternative policy options we examined has implications for energy costs, energy requirements and the environment,” Mondal suggested. “All these considerations must be weighed carefully to create a plan for investing in the Philippine power sector for long-term sustainability.”

The IFPRI, which seeks sustainable solutions for ending hunger and poverty, was established in 1975 to identify and analyze alternative national and international strategies and policies for meeting the food needs of the developing world, with particular emphasis on low-income countries and on the poorer groups in those countries.

Image Credits: Nonoy Lacza

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