Decentralised Energy Solutions for the Philippines?
The IMPHORAA project is placing electricity production and energy control into the hands of local populations, meeting the needs of rural communities and empowering people towards greater social mobility and entrepreneurialism.
But what is the current situation with the energy market in the Philippines?
The Philippines includes a population of 10 million people spread across over 7,000 islands, with the region being broken down into three main regions; Luzon, Visayas and Mindanao.
All of these regions are heavily dependent on coal for electricity production, with the fossil fuel accounting for 53.2% of energy production in Luzon, 49.6% in Visayas and 68.2% in Mindanao.
Of these regions, Luzon is the largest producer of energy, delivering 72% of the total electricity in 2019 – equal to 76,176GWh, compared to 16,060 GWh in Visayas and just 13,805 GWh in Mindanao.
With a GDP of 394.1 billion in 2022, the energy costs in the region are also high at around £0.18 per KWh (before the market fluctuations began in 2022).
With regards to the energy market itself, the transmission network is state owned by the National Transmission Corporation (TransCo), which is itself operated, maintained and developed by the National Grid Corporation of the Philippines (NGCP) under a 25-year license that began in 2007.
However, as a private corporation, NGCP is 40% owned by the State Grid Corporation of China, which has been a cause of controversy due to a perceived risk of Chinese ownership of the Philippines’ electricity network.
Energy distribution is currently managed by 21 private distribution utilities or electric cooperatives. The largest of these is the Manila Electric Company (Meralco), which serves the capital and the surrounding provinces.
Rural areas are mostly served by electric cooperatives, while a Wholesale Electricity Spot Market allows buyers and sellers to trade electricity as a commodity. However, most participants (84% as of 2017) rely on bilateral contracts that are outside of this spot market.
The local solutions offered by IMPHORAA place the control of local energy production back into the hands of local people, reducing costs, creating opportunity and decentralising energy production in the region.
This project is supported by Energy Catalyst and UK aid and was awarded as a “subsidy” under the UK International Obligations for Subsidy Control and delivered under Grant 90935 from Innovate UK.