Philippines poised to lead Southeast Asia in sustainability: report
This comes as its renewables are expected to be worth $30b by 2030.
The Philippines has the potential to be a leader in sustainability in Southeast Asia, a report found, as its renewables are seen to become $30b by 2030.
“With its renewables industry and natural capital attracting international attention, the Philippines has the potential to develop directly into a green economy,” Bain & Co. said in a report.
“There is also an opportunity to better manage its waste sector and electrify its transport sector.”
In its Perspectives on the Green Economy report, Bain & Co., along with Microsoft and Temasek, identified key opportunities that could drive the Philippines toward becoming a regional leader.
Of the projected $30b market, over 35% is for solar power, which could pave the way for investors to build infrastructures, such as electric grids and photovoltaic (PV) recycling plants.
The Philippines also has a 160-gigawatt (GW) wind energy potential in offshore areas within 200 km of its shores – one of only eight global emerging markets.
On top of this, global wind technologies can easily be adapted in the Philippines, considering it has no technological transfer limitations.
The Philippine government currently has no net-zero target but plans to raise the total installed renewable capacity to 38% by 2035.
In November 2020, the government declared a moratorium on new coal-fired power plant projects.
This is followed by reports that the Philippines spent some P318b in green projects, whilst its central bank invested some $550m in sustainable bonds.
Meanwhile, coal generation is expected to grow at a slower rate than previously expected, after the Philippine government issued a moratorium on coal power projects, according to a report by Fitch Solutions in December last year.
The moratorium will result in the suspension of about eight gigawatts of pre-permitted coal projects, Fitch said, citing government sources.
“The majority of these projects are expected to come online over the coming years, by 2026. We now forecast coal-red power generation to increase by an annual average of 5.2% between 2020 and 2029, amounting to approximately 93.6TWh (Terawatt-hour) by 2029,” it said.
Fitch said that its forecasts are subjected to “significant downside risks” as coal projects are being opposed by the public. It also noted that key utilities in the country such as AC Energy and Meralco have intended to shift from coal.
“We still expect a significant amount of coal capacity to be commissioned over the coming decade, with the impact felt only on a much longer-term,” it said, adding that coal projects that complied with environmental requirements will still be allowed to proceed.
It said that as of end-2020, there is nearly 20-GW coal-fired capacity in pre-completion stages, which is around 39% of the total capacity in the pipeline.
Despite this, however, Fitch said coal will dominate the energy mix in the Philippines, reaching 59% by 2029, “with considerable downside risks.”
It emphasised that coal is still the “cheaper and more reliable option” to meet the Philippines' demand surge.
“Coal-red power capacity growth is particularly important as resources in the Malampaya gas field continue to be depleted with limited scope for exploration success and infrastructural headwinds to LNG import capacity,” it said.