PH to develop financing model to fuel hybridisation of SPUG-served areas

This move is seen to bring more sustainable energy supply.

The Philippine government is working with financial sector partners to design new low-interest financing models for renewable energy developers to accelerate the hybridisation of off-grid areas served by the small power utilities group (SPUG).

According to the Department of Energy, it aims to implement a hybridisation project for SPUG diesel power plants using renewable energy through private sector participation.

The department held discussions with the National Power Corporation (NPC), Philippine Solar and Storage Energy Alliance, Philippine Hydro, Inc., Wind Energy Development Association of the Philippines, multilateral banks and renewable energy developers for this project.

DOE Undersecretary Rowena Cristina Guevara noted that the true cost of generation (TCGR) in SPUG areas averages about $0.306 per kilowatt-hour (PHP 18/kWh) and can go as high as $1.054/kW (PHP 62/kWh) in some locations.

However, consumers in these off-grid areas pay only around $0.119/kWh to $0.136/kWh (PHP 7/kWh to PHP 8/kWh), in line with the subsidised rates approved by the Energy Regulatory Commission. The difference is covered by subsidies collected from all electricity consumers nationwide.

“Hybridization of SPUG areas through the integration of RE can bring cleaner, reliable, and more affordable electricity in the long run for the Filipinos who need it most. But to make this happen, we need to address and deal with one major challenge --- financing,” Guevara said.  

The energy official noted that battery-plus-solar solutions now cost much less than the average $0.306/kWh (PHP 18/kWh) TCGR and deliver additional environmental benefits.

NPC President and Chief Executive Officer Jericho Jonas Nograles assured that his agency “stands ready to work with the DOE, our development partners, and the private sector to accelerate hybridisation and ensure that no community is left behind.”

$1 = PHP 0.017