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2040: The Future of Energy in the Philippines

The world is undergoing a significant energy transitioning with many factors on different levels of economy and society set to shape the future of energy supply-and the Philippines is no exception. We take a look at what to expect int he period up to 2040-the time window of the current Philippine Energy Plan.

The Philippines, because of its geographically exposed position being particularly vulnerable to extreme weather conditions, has been suffering from more violent storms in recent years. With a projected population growth to an estimated 140 million people by 2040 from roughly 100 million people as of now, the demand
for energy is forecasted by the Department of Energy to increase to more than four-fold from 12.2 MW in 2015 to 49.3 MW by 2040. Mindanao is projected to have the highest growth in demand at an annual rate of 8%.

While coal and oil will still play a fundamental role in energy supply for the country over the next two decades and beyond, there has been a focus set in the Philippine Energy Plan 2017- 2040 on cleaner energy sources, including liquefied petroleum gas (LPG) and natural gas for the transport sector, as well as on increasing the share of renewable energy sources—namely biomass, geothermal, solar, wind, and hydro—in the power mix in order to sustainably reduce carbon emissions. This should come together with the promotion to implement clean, efficient, and smart energy technologies, since meeting the dual challenge of mitigating the risks of climate change while boosting alternative energy supply requires additional technological advances.

With regard to renewable energy, the Philippines seems to be on the right track. The installed capacity of renewable energy in the country grew significantly over the past years, pushed by continuous promotion and encouragement of the Department of Energy towards renewable energy developers through a variety of incentives such as feed-in-tariffs and priority dispatch regulations.

Fuel transition in the transportation sector

Another important step in the energy transition of the Philippines will be the adoption of alternative fuels such as natural gas and other power sources for vehicles—a change that will take significant effort since it is disrupting an entire, well-established ecosystem built upon by established energy companies, conventional vehicle manufacturers, and infrastructure plans.

Globally, this system is being challenged in recent years with the advent and growing popularity of more environmentally friendly cars and electric vehicles, as well as scandals involving fraudulent auto manufacturers downplaying the polluting effects of their engines. This has resulted in several countries—including the most populous, China and India, as well as the U.K., Germany, France, and Norway—into moving towards banning the production and sale of all diesel and gasoline-powered vehicles. Industry estimations expected that by 2040, almost half of new cars sold globally will be electric vehicles and a significant part of the rest will be natural gas- powered or at least, hybrid.

While there are no plans for an outright ban on gasoline and diesel in the Philippines yet, there is a clear strategy towards the deployment of natural gas vehicles (NGVs) and electric vehicles—even if most jeepney operators contested the idea for cost reasons. The Electric Vehicle Association of the Philippines is pushing the government to install a national development program for electric vehicles over the next 10 years which would not only support electric vehicles, but also build an entire industry of developing, manufacturing, selling domestically and exporting them, and replacing tricycles and jeepneys with electricity-powered versions.

Overall, the increase in numbers of NGVs and electric vehicles is expected to drastically change the energy landscape in the Philippines up to 2040. Likewise, change is also expected to happen on the way the transport sector is organized and how the everyday experience of commuters and travelers will be shaped by more sustainable, greener, and healthier transport facilities. As the market transitions to these alternative energy sources, LPG or autogas presents itself as a viable and credible alternative to bridge the transition from conventional fuels to the electric vehicles of the future. LPG is today’s green fuel alternative, being affordable, readily available, and portable. It is used as an alternative for different applications, including power plants. Autogas, or LPG used to power vehicles, is now commonly used in a growing number of countries for private cars and public transportation vehicles. 

 

The challenge for energy players is to lead the way to the future when the landscape will change from sources to usage.

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