RENEWABLE ENERGY AND CLIMATE CHANGE SYMPOSIUM

Transcription

1 EU Philippines Access to Sustainable Energy Programme Assessing the proper roles of diesel power, renewable energy micro grids and solar home systems for offgrid electrification in the Philippines Ernesto N. Terrado, PhD Key Expert on Rural Electrification RENEWABLE ENERGY AND CLIMATE CHANGE SYMPOSIUM 22 June 2018 Makati

2 ASEP: 60 Million EU grant to PH ( ) 3 Components Type of Intervention 1. ASEP-TA Technical Assistance Activities only Funding/ Management EUR 7 million: 2 KEs +4,000 man days NKEs Implemented by GIZ /ICF Team at DOE. Managed by EUD. 2. Investment Support/TA 3. Call for Proposals Investments + TA to ECs EU 21 million EUR + GPOBA 3 million USD Implemented and managed directly by WB Investments EU 29 million EUR Implemented by awardees. Managed directly by EUD

3 ASEP Technical Assistance Component - 7 million Thematic Areas: Rural Electrification and Energy Efficiency Policy and Strategy Studies Planning Tools and Methodologies Capacity Development Awareness Raising and Visibility

4 Archipelagic Nature Archipelagic Nature of the Country of the Country pelagic Nature of the Country 7,107 islands Only 2,000 are inhabited Only about 500 islands are larger than 1 sq. km. Total area: about 300,000 sq km. Three electricity grids Luzon Visayas Mindanao 4

5 CURRENT PROGRAMS HOUSEHOLD ELECTRIFICATION DEVELOPMENT PLAN Towards 100% Household Electrification by 2021 Grid Electrification Off-Grid Electrification Regular Connections NEA SEP & BLEP NPC-SPUG* QTPs/NPPs DOE-EPIMB ER 1-94 NIHE Project PV MAINSTREAMING [ASEP] DOE-REMB HEP *NPC-SPUG is mandated to provide power in Missionary Areas if no private sector 5

6 Different Electrification Solutions Philippines (2017): 90% hh electrification 2.4 m households remain unelectrified

7 Considered offgrid in Philippines: Energized, but not connected to the national transmission grid Remote and unviable areas New Mabuhay, Davao Occidental Population: 650 Rural, no electricity 5 km from town (grid) Puerto Princesa, Palawan Population: 255,000 Highly urbanized, energized

8 Technology options for offgrid electrification

9 Diesel power predominates in offgrid electrification in the Philippines 135 existing NPC-SPUG operated diesel power plants located within 125 small island grids, with a total aggregate capacity (installed) amounting to more than 200MW. (Source-RLI). photo

10 Advantages of diesel power - Long term use and experience with diesel technology - Lower upfront capital costs - Responsive to varying loads Disadvantages - Fuel supply: availability, price uncertainty - High O&M cost - Relatively short working life - Noise, pollution from exhaust gases - GHG emissions The existing 200 MW of NPC-SPUG diesels are estimated to emit 17,500 metric tons CO2 per year

11 Unfortunately, we can t get rid of diesel and other fossil- fuel based systems soon in the Philippines and worldwide Fuel Projections 2035

12 Reducing fuel consumption of existing diesel power plants 1.Improvements in operating efficiency 2.Hybridization with renewables 3.Retrofits (adjust size of installed diesels, add automatic controls, etc)

13 Decision Tree for Offgrid Electrification Grid Extension or Decentralized Solution? Grid Extension Distance Terrain Total Load Decentralized Microgrid Concentrated or dispersed? Type of end use? Individual Systems Diesel RET Hybrid Resource availability Cost SHS Battery, etc Basic guide to decisions: Least Cost Economic Comparison/Cost Benefit Analysis/Lifecycle Costing, etc

14 Unfortunately, least cost does not always mean affordable Socialized Tariffs for offgrid consumers mandated by ERC Subsidies provided by Missionary Electrification Development Program (MEDP)- to NPC SPUG, QTPs Subsidy source: Universal Charge (UC-ME) funds paid by all electricity consumers Some issues with present subsidization system on targeting, equitable access, efficiency

15 After grid extension is ruled out, the specific type of microgrid solution depends on local resource availability, capital costs, levelized costs (sustainable tariffs), how long to develop < Slides on microgrids, SHS PVM Example: Solar PV Microgrid

16 Benefits of basic services provided by Solar Home Systems- not the kwh delivered - economically justify the costs

17 Old SHS and New PICO-SOLAR Technology is no longer the issue for SHS programs. Focus is on finding the right business model that increases the chances for sustainability

18 Market penetration of SHS with different financing schemes The income and affordability pyramid

19 ASEP RE Productive Uses TA : Objective : Increase household incomes with RE microbusiness to improve capacity to pay for required monthly service payments to ECs

20 ASEP TA on RE-Based Productive Uses: The 3 Offgrid Pilot Sites Selected Barangay Banacon, Getafe, Bohol Fishing community No. of HHs: 320 Proposed project: Ice plant (with Hh microgridning) Sitio New Mabuhay, Malita, Davao Occidental Agricultural community No. of HHs: 136 Proposed project: Abaca Stripping Machine Sitio Mahayag, Don Marcelino, Davao Occidental Agricultural Community No. of HHs: 104 Proposed project: Corn sheller and corn drier

21 Many challenges for promoting RE productive uses in offgrid areas Low Income ( Base of the Pyramid ) Micro scale of business Far from markets Lack of local entrepreneurial capacity Sustainability problems (technical, financial)

22 EXAMPLE: SOLAR MILL

23 Results of ASEP Feasibility Studies for RE Productive Uses (March 2018) Pilot Site New Mabuhay, Davao Occidental Solar powered technology 2 kw Abaca Spindle Machine Equipment Cost/Payback Php 0.9 m Payback interest: 5.4 yrs Equipment life: 10 yrs Status Commitment for Funding by CSR Obtained Mahayag, Davao Occidental 2 kw Corn Sheller + Flat Bed Dryer Php 0.75 m Payback interest: 4.5yrs Equipment life: 10 yrs Commitment for Funding by CSR Obtained Banacon, Bohol 800 kg/day Icemaker + Micro grid 340 hh Php 14.4 m Payback interest: 2.5 yrs Equipment life: 10 yrs Still Unfunded

24 New electrification strategy? Combining Productive Use with Microgridding Source: S. Craine (2017)

25 CONCLUSIONS The choice of technology in offgrid electrification must be determined primarily by least cost economic considerations. Full displacement of diesel power is not possible in the short to medium terms. Efficiency improvements, RE hybridization and other fuel reduction measures must all be applied.

26 CONCLUSIONS (2) After grid extension is ruled out, the specific type of microgrid solution depends on local resource availability, capital costs, levelized costs (sustainable tariffs) and project development time. Modern solar home systems have emerged as least cost for individual systems. Finding the right business model is key to sustainability. Stand alone RE productive uses can be combined with electrification microgrids to improve households ability to pay for service.

27 Thank you!