research about solar energy in the philippines

Solar Energy in the Philippines

Roland centeno december 17, 2018, submitted as coursework for ph240 , stanford university, fall 2018, introduction.

As nations worldwide look to alternate forms of energy production, renewable energy continues to grow as an increasingly present subset of energy sources. Among these alternatives to traditional fossil fuels is solar energy, which represents a relatively small, though still significant portion of the growing amount of renewable energy production. [1] Solar power uses solar panels (see Fig. 1) to convert the sunlight into usable energy. Due to its geographical location as well as several other key features, the Philippines, located in Southeast Asia, is an excellent site for increased integration of solar energy. In recent years the Philippines has begun to integrate solar energy production to positive results.

The Need for Increased Energy Production

There are several key factors that necessitate the Philippines's need for alternate energy sources, and make solar an excellent choice. According to a paper published in 2018, the Philippines has experienced an average annual gross domestic product increase of 5.4% in the past few years, and this growth is projected to reach 7% by 2040. It goes on to say that this GDP growth will drive a growth within energy demand. [1] In its current state, the Philippines has a strong reliance on fossil fuels to meet its energy demand, with about 77% of its power sector relying upon this source. The use of these fossil fuels has led to an increase in greenhouse gas emissions prompting a negative environmental impact. [1] A transition to a renewable energy source such as solar would reduce this negative effect on the environment. Finally, the Philippines has experienced frequent electricity outages in certain areas, particularly during summer months, since the 1990s. Furthermore, energy demand increased from 25.6 GWh in 1990 to 77.3 GWh in 2014. With energy demand to double from its 2013 amount by 2040, power outages are likely to increase as well. Renewable energy sources like solar could increase energy production and prevent these outages moving forward. [1]

Solar Energy Potential in the Philippines

From a geographic standpoint, the Philippines is a strong candidate for the solar power implementation. According to a study conducted by the Nation Renewable Energy Laboratory, the Philippines has an average solar energy potential of 4.5 kWh/m 2 per day throughout the country. Due to the amount of sunlight that the Philippines is exposed to throughout the country, developing solar plants is a good choice in terms of developing alternate energy solutions. [2]

Growth in Solar in Recent Years

The Filipino government has made a significant attempt in terms of encouraging the implementation of solar power within the country. In 2008, RA9513 was enacted, which contained several policies that promoted renewable energy development. It implemented a feed in tariff as well as offered commercial incentives toward companies to encourage them to implement renewable energy, most notably tax exemptions. These policy changes have provided strong encouragement for Filipino companies to look toward solar. [3]

As a rapidly growing nation with rapidly growing power needs to match, the Philippines needs to search for ways to meet this demand. Because of several key benefits that solar energy possesses, it provides a valid solution to the increasing energy needs of the country. The Philippines has enacted legislature in recent years to encourage solar energy as an option, and this action has already proven to be useful in meeting the country's energy needs. Moving forward, it makes sense for the country to continue along this path, as continued investments in solar will continue to benefit the country and help meet its energy needs.

© Roland Centeno. The author warrants that the work is the author's own and that Stanford University provided no input other than typesetting and referencing guidelines. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.

[1] M. A. H. Mondal et al. , "The Philippines Energy Future and Low-Carbon Development Strategies," Energy 147 , 142 (2018).

[2] C. D. Barley et al. , "Feasibility of Hybrid Retrofits to Off-Grid Diesel Power Plants in the Philippines ," U.S. National Renewable Energy Laboratory, NREL/CP-500-26927 , August 1999.

[3] F. S. Peñarroyo, " Renewable Energy Act of 2008: Legal and Fiscal Implications to Philippine Geothermal Exploration and Development ," Proceedings World Geothermal Congress, April 2010.

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Mini review article, a critical survey on renewable energy applications in the philippines and china: present challenges and perspectives.

• Law School, Kunming University of Science and Technology, Kunming, China

China’s Belt and Road (B&R) initiative provides new ideas and opportunities for international cooperation. Renewable energy plays a crucial role not only in the national sustainable development framework of China and the Philippines but also in bilateral cooperation between them. However, some obstacles still need to be addressed because renewable energy cooperation between China and the Philippines has not been thoroughly and comprehensively studied to date. Based on an in-depth analysis of current renewable energy cooperation between China and the Philippines, this paper employs PESTEL analysis to fully investigate the cooperative advantages and disadvantages by considering politics (P), economy (E), society (S), technology (T), environment (E), and legislation (L) and proposes several constructive suggestions. The ultimate purpose was to design feasible schemes to ensure the sufficient utilization of renewable energy and the construction of integrated power grid systems to meet shortages of electricity supply especially in the isolated small islands in the Philippines through cooperation with China. In particular, it offers valuable advice concerning the U.S.-China trade war and COVID- 19 pandemic, outlining how cooperation in the exploitation of potential renewable energy is vital.

Introduction

In response to the advantages of renewable energy ( Gullberg et al., 2014 ), many countries and regional organizations have entered into cooperative targeted renewable energy initiatives ( Anand et al., 2021 ; Mohan, 2021 ; Sasmita and Sidhartha, 2021 ). Existing research on renewable cooperation ( Feng et al., 2020 ) is mainly focused on a comprehensive analysis of the renewable energy cooperative mechanism between two countries ( Suryanarayana and Saumendra, 2020 ), a country and regional organizations ( Mehdi and Mehdi, 2020 ), and regional organizations ( Indeo, 2019 ), by forecasting the potentiality of cooperation and undertaking analysis via a mathematical model ( Satish and Vinod, 2020 ). However, three existing gaps need to be overcome.

• Most previous studies fail to comprehensively analyze the advantages and disadvantages of renewable energy cooperation between specific countries under B & R.

• Specific suggestions based on the effective factors of cooperation such as politics, economy, society, technology, environment, and legislation have not been proposed.

• The latest factors, including the COVID-19 pandemic and the United States-China trade war, have not been addressed.

This paper focuses on the exploitation of renewable energy cooperation between China and the Philippines, proposing a new perspective in response to this new context and undertakes a comprehensive investigation of a cooperative scheme between two countries. Based on a systematic overview of renewable energy systems in China and the Philippines, including the current situation, existing problems, policies, and plans, the basis and challenges for further cooperation between the two countries are explored ( Renewable Energy Development in the Philippines and Renewable Energy Development Status in China Sections).

The background informing this topic and existing renewable energy cooperation projects between China and the Philippines are addressed, and a Political, Economic, Social, Technological, Environmental, and Legal (PESTEL) analysis is adopted to illustrate the advantages and disadvantages of those factors in cooperation ( The Philippines—China Renewable Energy Cooperation Under Political, Economic, Social, Technological, Environmental, and Legal Analysis Section);

Finally, some feasible and promising suggestions are proposed to deal with emerging problems and opportunities in renewable cooperation between China and the Philippines under B&R ( Political, Economic, Social, Technological, Environmental, and Legal Recommendations Section).

Renewable Energy Development in the Philippines

Current status.

The Philippines stores rich renewable energy which also plays an important role in the energy supply of the country. As Table 1 shows, although the proportion of renewable energy in the total amount of installed capacity is only about 30% and there has been a slight downward trend in the last 3 years, the quantity produced is still steadily growing.

TABLE 1 . The Philippine installed capacity mix (MW) ( The Department of Energy, 2019 ).

Geothermal Energy

The Philippines is located in a tropical low-latitude area at the junction of Asia, Europe, and the Pacific plate, which means the country has rich geothermal energy resources. After many years of development, the installed capacity of geothermal power reached 1,944 MW in 2018, accounting for 13% of the world’s total, and ranking third after the United States and Indonesia ( Ratio et al., 2020 ).

Hydropower Energy

The Philippines has 421 rivers, numerous mountains, rugged terrain, and a rainy climate, which create abundant hydropower resources that contribute the largest portion of installed capacity generated by renewable energy. Although the Philippines already has some large-scale hydropower plants and has made achievements in the development of hydropower infrastructure, there is still 13,097 MW of undeveloped hydropower generation capacity remaining, according to an assessment by the Philippine Department of Energy ( The Department of Energy, 2019 ).

Solar Energy

With solar radiation of 4.0–6.0 kWh/m2/day, the Philippines has abundant solar energy resources which evenly distribute across the country and vary between 10 and 20% every month ( Sharma and Kolhe, 2020 ). Due to the continuous improvement of technology and efficiency of solar photovoltaic (PV) modules, the solar energy industry has achieved scale development and significantly reduced the costs of solar power generation ( Sharma and Kolhe, 2020 ). More and more residents and industrial sectors in the Philippines have started to use small-scale solar PV production.

Problem and Causes

The continuous economic expansion of the Philippines has brought serious problems in the form of insufficient energy supply ( Mondal et al., 2018 ). The Philippines’ GDP in 2018 grew by 6.2%, exceeding 6% for the seventh consecutive year ( GPD, 2019 ). However, more than 11% of the population has no electricity, and a higher proportion suffers from unreliable electricity supply ( Bertheau et al., 2020 ).

Huge reserves and the potential of renewable energy resources have not achieved a satisfying development in the Philippines.

The main reasons for the insufficient utilization of renewable energy, include the fact that the development of renewable energy requires high prepayment and technology costs ( Zafar et al., 2019 ). Moreover, hydropower and geothermal energy, which generate the most electricity, have a very long development cycle ( Barroco and Herrera, 2019 ). Moreover, the Philippines is unable to form an integrated power grid system, which impacts the sufficient transmission of electricity generated by renewable energy. The Philippine power supply system is also divided into “on-grid” and “off-grid” areas. The on-grid is supplied by two separate main power grids which lack a connection with each other. The off-grid covers these areas but suffers from insufficient power or even no power supply at all ( Bertheau et al., 2020 ).

Policies and Plans

The Philippine government has realized the importance of developing renewable energy and has formulated several policies and plans based on the focuses: 1) ensuring energy security, 2) achieving optimal energy pricing, 3) diversifying fuel sources, and 4) developing sustainable energy systems ( The Department of Energy, 2017 ). The National Renewable Energy Program (2011–2030) anticipates that the generation capacity of renewable energy will triple by 2030 ( Wang et al., 2020 ) This has lead to the development of policies including carbon taxes, the improvement of energy efficiency in both generation and consumption, diversification of the energy supply-mix ( Cabalu et al., 2015 ). Those policies and plans not only ensure energy security and reduced reliance on fossil energy they are also milestones in building a greener Philippines.

Renewable Energy Development Status in China

As the second-largest economy in the world, China has abundant renewable energy storage. By the end of 2019, the installed capacity of renewable energy in China was as high as 794.88 GW and has increased by 8.7% since 2018 ( Si et al., 2021 ). The current power generation capacity of each renewable energy source is shown in Figure 1 , and the current situation of China’s renewable energy is shown in Table 2 ( China Renewable Energy Engineering Institute, 2019 ). In 2013, China proposed the B&R initiative, which covers 65 countries in Asia, Africa, and Europe ( Wang et al., 2020 ). More importantly, promoting the green and low-carbon transformation of the energy structure of countries along the B&R is a core content of green construction in the area and a significant measure in improving the ecological environment and supporting global sustainable development ( Yang et al., 2021 ). As a key country along the Maritime Silk Road, the Philippines has also joined the Asian Infrastructure Investment Bank initiated by the Chinese government.

FIGURE 1 . Various types of power generation (A) installed capacity, and (B) proportion.

TABLE 2 . Status of types of renewable energy in China.

After decades of efforts, China has developed innovative approaches to energy and shared these experiences with other countries through the green cooperation of B&R to eliminate dependence on high-carbon growth models.

The advantages of the Chinese approach stem from it being a strong financial power. China has promoted the vigorous development of renewable energy, and in 2018 China became the world’s largest investor in renewable energy for the seventh consecutive year, an investment that accounts for almost one-third of the world’s total, reaching US $91.2 billion ( Si et al., 2021 ). Moreover, China’s renewable energy technology, manufacturing level, and high-quality production capacity have significantly improved in recent years, and a complete industrial chain with international advanced levels has been constructed in the renewable energy sector. This huge renewable energy product market has also contributed to the development of renewable energy worldwide.

In 2005, China enacted the Renewable Energy Law, quickly followed by more than 100 policies, regulating grid subsidies and special fund management measures, including guidance on promoting renewable energy consumption and other aspects as shown in Figure 2 ( China Renewable Energy Engineering Institute, 2019 ). The most important renewable energy plan of China is the 14th Five-year Plan (2021–2025). The key tasks of which include giving priority to the development of renewable energy based on market forces and low costs, systematically evaluating the development conditions and goals of various renewable energy resources, promoting renewable energy technologies and equipment to develop a relative industrial system, etc., ( Liu, 2019 ). In addition to the macro level, specific plans for different types of renewable energy exist that are international and jointly promote the construction of clean energy ( Liu, 2019 ).

FIGURE 2 . Renewable energy policy roadmap in China ( China Renewable Energy Engineering Institute, 2019 ). Abbreviations: National People’s Congress (NPC); State Council (SC); Renewable Energy (RE); Ministry of Finance (MOF); National Development and Reform Commission (NDRC); National Energy Administration (NEA); Exchange rate: 100 (CNY) = 15.4400 (USD) (Date: January 22, 2021).

The Philippines—China Renewable Energy Cooperation Under Political, Economic, Social, Technological, Environmental, and Legal Analysis

Existing cooperation.

China and the Philippines have a history of extensive cooperation in renewable energy, including hydropower, PV, biomass energy, and wind energy, as shown in Table 3 . This includes both the supply of existing equipment and Engineering Procurement Construction (EPC). This has greatly improved the utilization of hydroelectric and PV in the Philippines, and has made up for power shortages in some areas.

TABLE 3 . The Philippines—China renewable energy corporation projects.

Hydropower cooperation is the focus of the China-Philippines renewable energy cooperation agreement. Cooperative projects are mainly large-scale hydropower plants with an installed capacity of over 10 MW. Solar energy has now become the fastest-growing type of renewable energy in the Philippines, which has attracted many Chinese enterprises.

As one of the listed companies affiliated with the State Grid of China, the NARI Group owns several EPC projects of PV power stations in the Philippines. The Hengshun Group, a private company in China, signed an EPC contract of wind power and PV integration with Energy Logics Philippines, Inc. in 2016: the largest PV integration project to date in the Philippines.

Political, Economic, Social, Technological, Environmental, and Legal Analysis of Renewable Energy Cooperation

Under the intensifying forces of globalization and competition, PESTEL has recently evolved from PEST analysis, to consider the environmental and legal factors, with increased potential impact on businesses ( Thakur, 2021 ). The PESTEL analysis model is an effective tool for macro-environmental analysis that can not only analyze the external environment but also identify all forces that have an impact on the organization. This analysis mode mainly analyzes the investment environment of enterprises.

China and the Philippines have established diplomatic relations for 45 years. A mutual friendship formed after the election of Roberto Duterte to President of the Philippines in 2016. Building upon this preexisting relationship, China’s focus on green energy cooperation among countries means that it actively seeks energy cooperation partners in different regions. The Philippines is currently pursuing a green energy development model, implementing a large number of fiscal incentives to attract foreign investment in the renewable energy sector ( Cabalu et al., 2015 ).

Disadvantage

The relevant disputes between China and the Philippines in the South China Sea once froze the bilateral relationship. The current highly friendly relationship benefits from Duterte’s policy towards China, but this might change when Duterte’s term in office ends in 2022. Besides, the Philippines has serious political corruption problems and bureaucracy that may also lead to the unfair treatment of Chinese companies.

The Philippines is one of the most dynamic economies in the East Asia Pacific region. As a beneficiary of the power industry reform of the Philippines, the State Grid Corporation of China holds 40% of the National Grid Corporation of the Philippines. Meanwhile, Chinese energy enterprises have excellent brands and performance advantages. For example, as an active partner cooperating with the Philippines, China Energy Engineering Group Company has experience in power engineering projects and formed a complete industrial chain in international cooperation ( Shang et al., 2020 ).

In 2020, COVID- 19 pandemic caused a recession in the world economy and hindered international cooperation. In addition, the United States-China trade war has seriously affected the world market and greatly increased the trade barriers between economies. These international economic factors are detrimental to the cooperation between the two countries.

The overall economic level of the Philippines is not high, and the per capita GDP ranks 123rd in the world ( International Monetary Fund Philippine GDP per capita, 2019 ). Moreover, the industrial development level of the Philippines is relatively low, and public facilities such as transportation, electricity, and hydropower lag behind other countries. An out-of-date economy and lesser developed technical facilities make cooperation between the Philippines and other countries difficult.

China and the Philippines belong to the East Asian cultural circle and have a long history of cultural exchange. A Cultural Exchange Forum and a series of public welfare activities between the two countries were also held recently ( Sina News, 2018 ). After the COVID- 19 pandemic, China has repeatedly donated medical materials to the Philippines to jointly fight the epidemic.

The Philippines has an abundant labor force and a very young population structure in which the working-age population aged between 15 and 65 has reached 63.6%. In addition, English is the official language of the Philippines, and the literacy rate of Philippines residents is 96.4%, ranking among the highest in Asia ( Ministry of Commerce of the People’s Republic of China, 2019 ).

The domestic security situation of the Philippines is not favorable. There were 8,826 murders and 16,100 robberies in 2017, with 8.40 per 100,000 people ( Ministry of Commerce of the People’s Republic of China, 2019 ). There are also several armed rebel terrors groups.

The price levels and costs in the Philippines are also extremely high. The prices of vegetables and fruits, electricity, and hotel accommodation and meals are 3–4 times, 2–3 times, and 1–2 times higher than that of China, respectively ( Ministry of Commerce of the People’s Republic of China, 2019 ).

Technological

China and the Philippines are technically complementary in terms of energy development and power construction. China’s power technology is in the front ranks of the world and could help power development in the Philippines. For example, the advanced UHVDC power transmission technology could realize a sufficient power supply in the offshore islands, which is highly conducive to the formation of the power grid system in the Philippines. Meanwhile, China’s infrastructure construction, including 5G, the internet of things, and the industrial internet are also very advanced ( Yang et al., 2021 ). The Philippines also attaches great importance to the development of science and technology through active cooperation with technology-developed countries in engineering and scientific projects via higher education.

Due to the limitations of technology and financial resources, the level of large-scale projects independently constructed by the Philippines is very limited. Hence, many projects have been completed with capital and technologies from other countries. Chinese enterprises may lack the most advanced technology and experience in geothermal energy cooperation due to the lack of domestic geothermal resources.

The risks affecting electricity technical standards of design and construction cannot be ignored. The Philippines mainly adopts American standards which are different from those of China and lead to the extension of design and approval time.

Environment

China is a maritime neighbor of the Philippines, and the local time of the Philippines is consistent with Beijing time, which is convenient for cooperation and communication.

Due to its fragile climate and frequent geological disasters, the Philippines is frequently affected by natural disasters resulting in a great loss of human life and property ( Bollettino et al., 2020 ). Besides, the construction of hydropower stations could adversely affect wildlife and plants and lead to geological disasters. Local people and environmental protection organizations are very opposed to the construction of hydropower stations and the development of geothermal energy, which may greatly impact energy cooperation.

China and the Philippines issued the “Renewable Energy Law” in 2005 and 2008, respectively, to vigorously develop renewable energy and ensure energy security and the optimization of the ecological environment. Foreign investment in biomass and garbage power generation projects had a restriction of 40% lifted in November of 2019 after an announcement by the Philippine government. It is anticipated that other renewable energy projects will be further opened to foreign investment in the future ( The Department of Energy Administrative Order, 2020 ).

According to Philippine law, foreign investors are prohibited from buying land ( The Department of Energy Administrative Order, 2020 ). In addition, the Philippines has strict controls over work visas for Chinese, which is not conducive to management and technical personnel traveling there from China. Furthermore, as the main form of contracted projects between Chinese enterprises and the Philippines, government projects can only be established after being approved by the Philippine National Economic Development Agency.

Political, Economic, Social, Technological, Environmental, and Legal Recommendations

First, the Philippines and China should make the most of the existing mutual friendly diplomatic relationship to actively develop cooperation. The B&R and the China-ASEAN Free Trade Area have brought more opportunities and favorable conditions for renewable energy cooperation between the two countries. In terms of disputes in the South China Sea, it is the consensus and commitment of China and the Philippines to settle through negotiation and properly manage their relevant dispute.

Secondly, the renewable energy development strategy could be deepened in the two countries respectively. China should consider renewable energy as a new orientation of developing export trade and investment outward, and actively guide and support overseas cooperation. The Philippines could absorb advanced foreign renewable energy technologies in grid construction while mobilizing domestic resources to develop renewable energy.

With the guidance of the B&R initiative and the help from the Asian Infrastructure Investment Bank, the Philippines could actively carry out infrastructure construction to improve the business environment. In terms of offshore islands, the construction of renewable energy power plants and grids would solve electricity shortages.

Hydropower and geothermal power generation are the main areas of international cooperation in the Philippines. The EPC mode could be an ideal choice in cooperation, which is relatively fixed, and the implementation period is not long. Chinese companies could integrate the upstream and downstream of the industrial chain systematically to achieve sufficient cooperation and expand the scale and benefits of collaboration.

The two countries could continue to carry out cultural exchange under the background of B&R and promote non-government exchange. In addition, China and the Philippines always adhere to the coexistence of diversified culture, mutual learning, and cooperation for shared benefits. Therefore, Chinese companies participating in cooperation should pay attention to local cultural differences, and respect the local customs, religions, and living habits of the Philippines. Besides, the Philippine government needs to increase public security management through the reduction of crime rate, strictly control the possession of guns, and standardize its application administrative procedures.

Firstly, China is an advantageous partner in assisting the Philippines to form a complete power grid that especially aims to increase the power supply of offshore islands. To reduce the technical risk, research and exploitation in major technology should be strengthened. Making good use of a contract to constraint risk, promoting project supervision and construction quality should be the focus of project management.

Secondly, great attention should also be paid to the integration of power standards with international standards. Due to the different situations in each country, integration should not aim to achieve the unity of technical standards but to learn from the international advanced technical standards and increase public knowledge of China’s working practices to continuously optimize and update standards.

Due to the frequent occurrence of natural disasters and tropical epidemic diseases in the Philippines, contractors should pay close attention to local news and take preventive measures to prevent personnel and property losses.

Actively fulfilling social responsibility and strengthening environmental awareness is of great significance, because they develop the local economy and improve local people’s livelihoods. Through appropriate publicity in a local area, the public could be told more about the cooperative project, and gain an understanding of the fact that they will directly experience an improvement in quality of life quality from these projects. This would improve the enterprise’s local popularity and form a positive corporate image.

On the governmental level, an agreement focused on the strategic cooperation of renewable energy and based on the national strategy and security of both two countries could be reached, which may include investment, technology cooperation, grid construction, and trade. Furthermore, governments of China and the Philippines could establish a unified and effective platform to share renewable cooperative information, corresponding policies, and administrative procedures to solve the difficulty of information collection and nontransparent policies faced by potential cooperators or contractors.

In terms of enterprises, Chinese organizations need to fully understand Philippine laws and regulations to ensure they operate legally, including visas, environmental protection, land, and localized employment regulations. Moreover, the restriction of the foreign investment ratio of renewable energy projects should be studied seriously to maximize the profit of the enterprises in accordance with the laws of the Philippines.

This paper is the first to undertake a systematic study of renewable energy cooperation between China and the Philippines under B&R, and draws the following crucial conclusions:

Firstly, the cooperation between China and the Philippines in renewable energy is a mthod of building a greener Philippines and protecting the environment. The coexistence of abundant but undeveloped renewable energy resources and the shortage of electricity supply, especially in the offshore islands, requires deep cooperation with China, as it has superior technological and extensive experience in grid construction. Among various renewable energy, hydropower and geothermal powers are major cooperative areas, in terms of the status of the Philippines. How to explore and utilize renewable energy more economically and efficiently, and realize a sufficient electricity supply are important factors in alleviating dependence on imported fossil fuel energy, a will form a top priority of any cooperative agreement. In addition, the two countries can use the opportunity of renewable energy cooperation to promote cooperation in other industries and achieve mutual benefit and win-win results between the two countries.

Secondly, renewable energy cooperation is the focus of energy cooperation in any B&R initiative. Moreover, a Regional Comprehensive Economic Partnership was established in 2020 and has eliminated trade barriers between Asia-Pacific countries and ASEAN countries. The combination of these initiatives and agreements presents an unprecedented opportunity for China and the Philippines to develop renewable energy cooperation. However, the outbreak of the United States-China trade war and the ongoing COVID- 19 pandemic have brought unprecedented challenges to such potential cooperation initiatives. In response to opportunities and challenges and to achieve a win-win situation, China and the Philippines need to strengthen political and economic cooperation and promote corresponding policies.

Thirdly, a cooperative agreement focused on strategic cooperation concerning renewable energy that is based on national strategy and the security of both two countries may include investment, technology cooperation, grid construction, and trade for renewable energy infrastructure. Furthermore, the Chinese and the Philippine governments could establish a unified and effective platform to share renewable cooperative information, corresponding policies, and administrative procedures to solve the difficulties of collecting information and nontransparent policies faced by potential cooperators or contractors.

Finally, although the disputes between China and the Philippines in the South China Sea once impacted this bilateral relationship seriously, the current friendly relationship has lasted 5 years, creating a positive and timely opportunity for cooperation between the two countries.

Author Contributions

XL: Conceptualization, Writing- Reviewing and Editing. HW: Writing- Original draft preparation, Investigation. YL: Writing- Reviewing and Editing. WL: Supervision, Resources.

Conflict of Interest

The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.

Publisher’s Note

All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article, or claim that may be made by its manufacturer, is not guaranteed or endorsed by the publisher.

Acknowledgments

The authors acknowledge the support of the Talents Training Program of Kunming University of Science and Technology (KKZ3201524007).

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Suryanarayana, G., and Saumendra, S. (2020). A Novel Complex Current Ratio- Based Technique for Transmission Line protection. Prot. Control. Mod. Power Syst. 5 (3), 239–247.

Thakur, V. (2021). Framework for PESTEL Dimensions of Sustainable Healthcare Waste Management: Learnings From CO VID- 19 Outbreak. J. Clean. Prod. 287, 125562. doi:10.1016/j.jclepro.2020.125562

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Wang, C., Wood, J., Geng, X. R., Wang, Y. L., Q iao, C. Y., and Long, X. L. (2020). Transportation CO2 Emission Decoupling: Empirical Evidence from Countries along the belt and Road. J. Clean. Prod. 263, 121450. doi:10.1016/j.jclepro.2020.121450

Yang, B., Swe, T., Chen, Y., Zeng, C., Shu, H., Li, X., et al. (2021). Energy Cooperation between Myanmar and China under One Belt One Road: Current State, Challenges and Perspectives. Energy. 215, 119130. doi:10.1016/j.energy.2020.119130

Zafar, M. W., Shahbaz, M., Hou, F., Sinha, A., and Sinha, A. (2019). From Nonrenewable to Renewable Energy and its Impact on Economic Growth: The Role of Research & Development Expenditures in Asia-Pacific Economic Cooperation Countries. J. Clean. Prod. 212, 1166–1178. doi:10.1016/j.jclepro.2018.12.081

Keywords: the belt and road, the Philippines-China cooperation, renewable energy, PESTEL analysis, renewable energy cooperation

Citation: Li X, Wang H, Lu Y and Li W (2021) A Critical Survey on Renewable Energy Applications in the Philippines and China: Present Challenges and Perspectives. Front. Energy Res. 9:724892. doi: 10.3389/fenrg.2021.724892

Received: 15 June 2021; Accepted: 19 July 2021; Published: 30 July 2021.

Reviewed by:

Copyright © 2021 Li, Wang, Lu and Li. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) and the copyright owner(s) are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

*Correspondence: Wanlin Li, [email protected]

This article is part of the Research Topic

Advanced Optimization and Control for Smart Grids with High Penetration of Renewable Energy Systems

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Why the Time Is Right for Renewable Energy in the Philippines

• renewable energy
• Clean Energy
• climate change
• coronavirus

Prior to the COVID-19 pandemic, the Philippines’ economy was humming. The country boasted an exemplary 6.4% annual GDP growth rate and was part of an elite list of countries experiencing uninterrupted economic growth for more than two decades .

Things look very different today. Over the last year, the Philippine economy registered its worst growth in 29 years. About 4.2 million Filipinos are unemployed, nearly 8 million took pay cuts and 1.1 million children dropped out of primary and secondary education as classes moved online.

To exacerbate this economic and human catastrophe, the intermittent reliability of fossil fuel plants has led to forced power outages and unplanned maintenance. In the first half of 2021 alone, 17 power-generating companies went offline and breached their plant outage allowances as a result of the so-called manual load dropping to preserve power grid stability. Rolling blackouts, which historically only happen in the hottest months of March and April when hydropower plants underperform due to water supply scarcity, have continued well through July, disrupting school and work for millions. The power supply instability may also be affecting COVID-19 vaccination rates , since vaccines need stable energy to meet temperature-control requirements.

There’s a solution to the Philippines’ economic and energy woes: investing more in renewable energy development. Indeed, the country could finally be at a critical turning point in bringing its outdated energy system into the future.

How Will Renewable Energy Help the Philippines?

The Philippines’ current blackouts, and the associated energy supply and security challenges, have already prompted multi-sectoral, bipartisan calls for action to transform the country’s energy system. The island nation also remains highly vulnerable to the impacts of climate change. In the last few years, as potential impacts become clearer, climate action has become an important issue for energy supply, energy security, job creation and post-pandemic essentials like cleaner air and a healthy planet.

Investing in renewable energy now should be one of the country’s priorities in order to alleviate several problems it faces. For one, it could provide a much-needed economic boost and quell fears of a U-shaped recovery. According to the World Economic Forum , citing numbers from the International Renewable Energy Agency (IRENA), every dollar invested in the clean energy transition provides 3-8 times the return.

Furthermore, the widespread adoption of renewable energy creates employment opportunities up and down the supply chain. The renewable energy sector already employed 11 million people worldwide as of 2018. A May 2020 report by McKinsey showed that government spending on renewables and energy efficiency creates 3 times more jobs than spending on fossil fuels.

Renewable energy also reduces health risks since higher consumption of fossil fuels increases air pollution.

Additionally, renewable energy can provide electricity access for all while reducing electricity costs for consumers. While millions of new consumers gained access to electricity since 2000, some 2 million people in the Philippines are still without it. Decarbonized and decentralized power generation systems that do not require pricey, massive and logistically challenging transmission networks in rugged and remote terrains would further the goal of total electrification. Providing consumer choice for low-cost clean energy sources can also result in savings and better profit margins for businesses, particularly small- and medium-sized businesses, which are more sensitive to changes in their month-to-month operational expenses than larger corporations.

Finally, the low-carbon energy transition will help thwart climate change and reduce the carbon intensity of the Philippines’ power sector, as well as improve its energy system resilience. Since the Philippines is made up of more than 7,000 islands, distributed renewable energy (DRE) systems that are not dependent on the transportation of fuel are well-suited to the country's geographic profile. This reduces the need for extra-long transmission lines that can be exposed to intense storms or other natural disturbances. DREs, especially those backed by batteries, can provide fast backup power during calamities, making the energy system more resilient.

A Tipping Point for Renewable Energy?

While the national government has already taken some steps to transition away from fossil fuels, coal continues to dominate the Philippines’ power supply.

The Green Energy Option Program (GEOP) is a provision of a 2008 national renewable energy law envisioned to transform the energy system by allowing commercial and industrial energy users to opt for 100% renewable energy. If implemented well, the GEOP could usher in a new business-as-usual scenario — one that no longer leans on fossil fuels, but instead makes renewable, green power the default choice because it is the option that makes economic, environmental and practical sense. However, the GEOP has remained unenforced for more than a decade.

But this may be poised to change: On July 29, 2021, a group of leading companies headed by Toyota Motor Philippines released a joint statement of support pushing for a rapid, full implementation of the GEOP. Notably, Toyota Philippines was joined by AC Energy, the energy arm of the country's oldest conglomerate, which last year announced to great fanfare its plans to fully divest from coal by 2030 on the way to becoming Southeast Asia’s largest listed renewable energy developer.

High-level executives of the incumbent Duterte administration — including Department of Finance Assistant Secretary Paolo Alvarez and Department of Energy Undersecretary Felix William Fuentebella — provided reactions of support for a clean energy transition. They were joined by a line-up of leading political candidates expected to figure prominently in the crucial May 2022 elections, the first national election since the COVID-19 pandemic.

This unprecedented, truly bipartisan show of support for the energy transition and for climate action in the Philippines marks a historic turning point — political leaders across party lines have somehow unified toward a common cause.

At the same time, the May 2022 elections will see 4 million first-time Filipino voters, most of whom are increasingly climate-aware youth. This number — about 10% of total votes cast — is significant, meaning climate policy and ambitious renewable energy plans could be decisive in the election’s outcome.

Seizing the Renewable Energy Opportunity in the Philippines

Like many developing countries, especially those in Asia, the Philippines needs to respond and recover fast to the economic impacts and human devastation of the COVID-19 pandemic. Investing in climate-proof, economically smart renewable energy will put the country on the right path. Rather than continuing to rely on unstable, polluting fossil fuels, the Philippines has an opportunity to embrace the support of the private sector and the public, lead among its peers in the region, and chart a bold path toward a renewable energy future.

The question now is: Will its national government seize the opportunity?

Relevant Work

Clean energy can help southeast asia recover after covid-19, after a decade of fossil fuel investing, can china fulfill its promise of a "green" belt and road initiative, renewable energy shouldn’t be blamed for spiking energy prices — it's the solution, indonesia and the philippines take action to accelerate clean energy transition, how you can help.

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Solar Energy in the Philippines Will Play a Growing Role

Windmills and solar farm in Ilocos Norte, Philippines. Photo by Alex Traveler

05 October 2022 – by Eric Koons   Comments (0)

Southeast Asia is at an energy crossroad, one best exemplified by the situation regarding solar energy in the Philippines . As a result of energy demand steadily increasing and the global mandate of reducing fossil fuel-related energy programs, the region is looking for opportunities to meet its energy needs sustainably.

The Philippines is seeking to transition to renewable energy as quickly as possible. Currently, the country’s energy mix consists of around 77% fossil fuels, the remaining24% split across hydro, geothermal, wind and solar. However, the Filipino government would like to achieve self-sufficiency from an energy perspective by using a mix of fossil and renewable energy development.

The Current State, Demand and Percentage of Solar Energy in the Philippines

Solar energy is an increasingly popular power source in the Philippines, with several new projects unveiled and billions in investments poured into the nation’s energy grid. Solar made up 0.7% of total power consumption in 2021, but it is expected to increase its overall share continually.

The growing popularity and optimistic predictions relate to the high accessibility of solar for households and businesses and the ambitious renewable energy targets adopted by Filipino lawmakers. Additionally, the government has very lucrative incentives for rural electrification, which will require distributed energy systems – something solar excels at.

Is Solar Energy Suitable for the Philippines?

A report by the Philippines’ Department of Energy (PDOE) highlights the country’s high levels of direct sunlight all year round. In other words, the Philippines has a large solar energy potential. This has led the PDOE to push for the inclusion of more solar projects in the Philippines’ already ambitious renewable energy projects plans. Major hubs within the country tend to rely on natural gas and coal for power generation. However, geothermal and hydro are becoming more popular. The real opportunity for solar to gain ground rests in the Philippines’ rural areas.

The Philippines has a population of 115 million people across over 7,500 islands ; geographical location can make total electrification difficult – especially on a single central grid. Therefore, microgrids that serve local communities have been gaining traction. These systems easily incorporate solar power to ensure access to clean energy.

“That’s where the big opportunity is: electrifying 4.6 million households with solar, and that’s not counting small commercial and industrial (C&I) businesses – in tourism, agriculture, fisheries, etc. – that could use that clean energy to improve and grow their businesses.” WEnergy Global founder and CEO Atem Ramsundersingh

Where Can We Find Solar Power in the Philippines?

Solar power plants are coming online across the entirety of the Philippines. Some models show that some major hubs may be able to source half of their energy needs from renewable energies. The low operating prices and potential for high energy creation will drive significant increases in solar capacity over the coming years. For example, the world’s largest solar farm will be built in the Philippines in tandem with large-scale energy storage. It will have a capacity of 4,500 MWh. It will increase the renewable energy capacity in the Philippines.

The Future of the Philippines Solar Energy

Experts predict that the solar energy market in the Philippines will record a CAGR of 15% during the 2022-2027 period. This is buoyed by significant investments in the sector and high confidence in the nation’s long-term goals.

Especially on rural islands, solar will become more dominant and open opportunities for more electrification across the nation. The shift away from the usual diesel generators powering these island communities could save the country over USD 200 million annually in fuel costs. This, in tandem with low operating costs, makes it an easy choice for many rural islands’ energy needs. With international support, solar panels and solar home systems can help meet the electricity demand.

Philippines Renewable Energy Progress is an Example for the Region

The transition to renewable energy sources in Southeast Asia will have long-lasting benefits within the region and the world. While natural gas and coal will continue to play a role in the energy mix of several major nations, the Philippines is highlighting how the share of solar and other renewables can increase rapidly within a national grid.

Although capacity is still low, the projects being built and funded showcase a hunger for low-carbon energy like solar. As renewable energy advocates point out, this transition will make the Philippines a much stronger country economically, environmentally and socially. Renewable energy is the future, and solar energy will play a critical role in the Philippines.

by Eric Koons

Eric is a passionate environmental advocate that believes renewable energy is a key piece in meeting the world’s growing energy demands. He received an environmental science degree from the University of California and has worked to promote environmentally and socially sustainable practices since. Eric’s expertise extends across the environmental field, yet he maintains a strong focus on renewable energy. His work has been featured by leading environmental organizations, such as World Resources Institute and Hitachi ABB Power Grids.

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• Original article
• Open access
• Published: 09 January 2018

A real options approach to renewable electricity generation in the Philippines

• Casper Boongaling Agaton   ORCID: orcid.org/0000-0003-1153-262X 1 &
• Helmut Karl 2  

Energy, Sustainability and Society volume  8 , Article number:  1 ( 2018 ) Cite this article

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The Philippines is making a significant stride to become energy independent by developing more sustainable sources of energy. However, investment in renewable energy is challenged by competitive oil prices, very high investment cost for renewable energy, and high local electricity prices. This paper evaluates the attractiveness of investing in renewable energy sources over continue using oil for electricity generation.

This paper uses the real options approach to analyze how the timing of investment in renewable energy depends on volatility of diesel price, electricity price, and externality for using oil.

The result presents a positive net present value for renewable energy investment. Under uncertainty in oil prices, dynamic optimization describes how waiting or delaying investment in renewables incurs loses. Decreasing the local electricity price and incorporating negative externality favor investment in renewable energy over continuing the use of oil for electricity generation.

Conclusions

Real options approach highlights the flexibility in the timing of making investment decisions. At the current energy regime in the Philippines, substituting renewable energy is a better option than continue importing oil for electricity generation. Policies should aim at supporting investment in more sustainable sources of energy by imposing externality for using oil or decreasing the price of electricity.

Environmental problems associated with emissions from fossil fuel, along with limited supply, volatile prices, and energy security, prompted developed and developing countries to find more reliable and sustainable sources of energy. Renewable energy (RE) sources, being abundant, inexhaustible, cleaner, and readily available, emerge as a promising alternative energy source. According to International Energy Agency (IEA), RE accounted to 13.7% of the world energy generation mix in 2015 [ 1 ]. With a rapid decline in RE costs, this percentage mix is expected to double by 2040 [ 2 ]. In the Philippines, the development and optimal use of RE resources is an essential part of the country’s low emission strategy and is vital to addressing climate change, energy security, and access to energy [ 3 ]. In 2015, renewable energy accounts to 25% of the country’s total electricity generation mix, only 1% from wind and solar energy [ 4 ]. Since the country is highly dependent on imported fossil fuels, sudden changes in the price of fuels in the world market may eventually affect the country’s energy security. Renewable energy serves as a long-term solution by introducing localized RE sources. However, despite the country’s huge potential for RE generation, investments in RE projects are challenged by competitive prices of fossil fuels, more mature technology for fossil fuels, and very high investment cost for renewable energy. These give us the motivation to make a study that analyzes the attractiveness of RE investments to address the country’s concern on energy sufficiency and sustainability.

One of the most common techniques in analyzing investment projects is the net present value (NPV). This technique is widely used by developers, financial institutions, and government agencies under the condition of definite cash flow. Since RE investment in emerging economies involves high risk from volatile energy prices and changing RE technologies, NPV undervalues investment opportunities and thus considered inappropriate for assessing RE projects in developing countries including the Philippines [ 5 ]. Real options approach (ROA) overcomes this limitation as it combines risks and uncertainties with flexibility in the timing of investment as a potential factor that gives additional value to the project [ 6 ]. Recent studies use ROA renewable energy investment particularly for wind, solar photovoltaic (PV), hydropower, concentrated solar power (CSP), and combination (hybrid) of RE with uncertainties in non-RE cost, certified emission reduction (CER), feed-in tariff (FIT), energy production, operations and maintenance (O&M) cost, research and development (R&D) grants, production tax credit (PTC), RE credit (REC), among others (see Table  1 ).

This paper contributes to the existing literature by proposing a ROA framework for analyzing RE projects for developing countries, particularly, island countries that are highly dependent on imported oil for electricity generation. While previous studies proposed a full system switch to RE [ 7 ] or applied the ROA model to large-scale RE projects [ 8 , 9 , 10 , 11 ], this study takes the case of Palawan island in the Philippines and focuses on a smaller scale project which is particularly more realistic to developing countries. Whereas previous works’ approaches used coal and gas for fuel price uncertainty [ 7 , 9 , 10 , 12 ], this work uses uncertainty in oil prices as the world energy mix is dominated by liquid fuel, more developing countries are dependent on imported oil, and that investments in renewable energy is affected more by volatility in oil prices than coal prices. Finally, this paper proposes an externality tax for using fossil fuels as it more applicable in developing countries than introducing CER price, PTC, REC, CO 2 price, and emission/externality cost as proposed in previous works [ 7 , 9 , 10 , 13 , 14 ].

Applying ROA, this study aims to evaluate whether investing in RE is a better option than continue using diesel for electricity generation by considering various uncertainties in diesel fuel price, local electricity prices, and imposing externality tax for using diesel. This finally aims to recommend various government actions to address environmental problem, supply chain, and national security regarding energy.

Real options approach

Myers [ 15 ] first referred ROA or real options valuation as the application of option pricing theory to valuate non-financial or “real” assets. Real option itself is “as the right, but not the obligation, to take an action (e.g., deferring, expanding, contracting or abandoning) at a predetermined cost, called exercise price, for a predetermined period of time – the life of the option” [ 16 ]. Investment decisions, in the real world, have main characteristics: irreversible, high risk and uncertain, and flexible [ 17 ]. These characteristics are not captured by traditional methods of valuation, such as NPV, discounted cash flow (DCF), internal rate of return (IRR), and return on investment (ROI) leading to poor policy and investment decisions. ROA, on the other hand, combines uncertainty and option flexibility which characterize many investment decisions in the energy sector.

This research applies ROA to analyze investment decisions whether to continue using diesel for electricity generation or invest in RE. We use the uncertainty in diesel prices as a main factor that affects investment decisions. Using dynamic optimization, we evaluate the maximized value of investment at each price of diesel, identify the trigger price for shifting technology from diesel-based electricity to RE, and analyze the value of waiting or delaying to invest in RE. Finally, we incorporate sensitivity analyses with respect to electricity prices and externality tax for using diesel.

• Dynamic optimization

We follow the method described by Dixit and Pindyck [ 18 ] and adopt the work of Detert and Kotani [ 7 ] on optimizing investment decision under uncertainty using dynamic programming. In this research, we describe a model of an investor that identifies the optimal value of either investing in RE or continue using diesel for electricity generation as shown in Eq.  1 (see Table  2 for the list of variables and parameters).

Using this model, we determine the option value, V D , t , by maximizing the investment at each price of diesel, D , from 0 to US$1000/barrel, for each investment period, t . We set the dynamic optimization process to 40 years which represent a situation where an investor is given a period to make an investment decision. After that period, he has no other option but to continue using diesel for electricity generation. The choice is valued for another 25 years to represent the lifetime of power plant using diesel. We set the value of T R to 25 years to represent the number of years of electricity generation using RE. Finally, we solve the problem backwards using dynamic programming from terminal period [ 7 , 19 ]. The uncertainty in diesel prices in Eqs.  2 and 3 as well as the Monte Carlo simulation in the dynamic optimization process is discussed in the next subsection.

Stochastic prices and Monte Carlo simulation

In line with the previous studies, we assume that the price of diesel is stochastic and follow geometric Brownian motion (GBM) [ 20 , 21 , 22 ]. Dixit and Pindyck [ 18 ] present the stochastic price process as

where α and σ represent the mean and volatility of diesel price, dt is the time increment, and dz is the increment of Wiener process equal to \( {\varepsilon}_t\sqrt{dt} \) such that ε t ~ N (0, 1). Using Ito’s lemma, we arrive at

We approximate Eq.  6 in discrete time as

To determine the drift and variance of P , we use the Augmented Dickey-Fuller (ADF) unit root test using the following regression equation

where \( c(1)=\left(\alpha -\frac{1}{2}{\sigma}^2\right)\Delta t \) and \( {e}_t=\sigma {\varepsilon}_t\sqrt{\Delta t} \) . We then estimate the maximum likelihood of the drift \( \alpha =\mu +\frac{1}{2}{s}^2 \) and variance σ  =  s , where α is the mean and s is the standard deviation of the series p t  −  p t  + 1 [ 23 ].

In this research, we use the annual prices of diesel from 1980 to 2016. The result of ADF test as shown in Table  2 implies that the null hypothesis that p t has a unit root at all significant levels cannot be rejected. Therefore, P conforms GBM. We estimate the parameters α  = 0.007614 and σ  = 0.358889 and use in identifying stochastic prices of diesel under GBM (Table  3 ).

We use the Monte Carlo simulation to compute the expected net present value of electricity generation using diesel in Eqs.  2 and 3 . First, we approximate a vector of potential prices of diesel using the stochastic prices of GBM as follows:

This equation illustrates that the previous price affects the current price of diesel. Second, from the initial price of diesel, P D , 0 , we estimate the succeeding prices of diesel in each period using Eq.  9 . We incorporate these prices in Eq. 2 and calculate the present values of using diesel for electricity generation. Finally, we estimate the expected net present value at each initial price node i and repeat the whole process in a sufficiently large number of J  = 10000 times and take the average as given by the equation

Trigger price of diesel

Dynamic optimization process in the previous sections generates the maximized option values of investment. From these simulation results, we identify the trigger price of diesel for switching to RE as follows

where \( {\widehat{P}}_D \) is the trigger price of diesel or the minimum price where the option value in the initial period V 0 ( P D , t ) is equal to the option value in the terminal period of investment \( {V}_{{\mathrm{T}}_R}\left({P}_{D,\mathrm{t}}\right) \) [ 7 , 18 , 24 ]. From the given equation, we define trigger price as the minimum price of diesel that maximizes the profit of shifting the source of electricity from diesel power plant to RE.

Data and scenarios

To determine a suitable set of parameter values for the baseline scenario, we use data from various sources that nearly reflects the investment environment for renewable energy project in Palawan. This is the largest island province in the Philippines composed of 1780 islands and islets that are currently not connected to the national grid and only depend on imported diesel and bunker fuel. The recent Calatagan Solar Farm project in Batangas is set as a benchmark of the data for investment in RE, as this project is the latest RE project in the Philippines and has similar geographic features with Palawan; hence, investment cost estimations are up-to-date and relatively comparable [ 25 ]. This 63.3 MW solar farm, covering a total area of 160 ha, projects to generate 88,620 MWh of electricity per year. It costs US$120 million and will operate for at least 25 years. We use the data from Palawan Electric Cooperative (PALECO) [ 26 ] to approximate the local electricity price and the quantity and costs of generating electricity from diesel.

Electricity prices in the Philippines varies from island to island depending on the source of energy, as well as various charges including the generation, transmission, distribution, metering, and loss. In Palawan, effective power rates also vary across different municipalities [ 26 ]. We employ these variations in the electricity price scenario by changing the electricity price in the baseline model. In this scenario, we aim to describe how policy in imposing electricity price ceiling or price floor affects the investment decisions particularly in introducing RE as a source for electricity generation.

Lastly, we consider the externality tax of electricity generation from diesel. This value represents the negative externality including, but not limiting to, health and environmental problems associated with combustion of diesel. We use the data of the estimated average external costs for electricity generation technologies from European Environmental Agency (EEA) [ 27 ]. For this scenario, we include externality costs, tax for estimating the net present value of using diesel in Eqs.  2 and 3 . We arbitrarily assign values, between 0 (for baseline) to US$ 80/MWh, which are lower than those reported in literature to describe a more realistic condition. We assume that RE source, particularly solar PV, produces minimal or nearly no externality.

Results and discussion

Baseline scenario.

Figure  1 and Table  4 show the result of dynamic optimization at the baseline scenario. The first point of interest is the positive net present value of RE. This implies that, using the traditional valuation method, renewable project is a good investment in the island of Palawan. This result is evident as the installation of solar energy projects grows rapidly in the recent years. In 2016, there are already 538.45 MW installed capacity of solar projects from the 4399.71 potential capacity in the whole country [ 25 ]. Caution must be applied as net present value is not the sole determinant of investment in ROA. The optimal timing that maximizes the value of investment opportunity under uncertainty must also be accounted for [ 18 ].

Option values at the baseline scenario. Legend: base_0: option values of energy investment at the initial period; base_T: option values of energy investment at the terminal period

Figure  1 shows the dynamics of the option values at different initial prices of diesel. Result shows that the option values decrease over diesel price as the cost of generating electricity increases with fuel price. The trigger price as indicated by the intersection of option value curves indicates the minimum price of diesel that maximizes the decision of shifting from diesel based to RE generation. The result in the baseline scenario at US$168/barrel is higher than the current price at US$101.6/barrel. Intuitively, this implies that waiting to invest in RE is a better option than investing at the current price of diesel. However, the value of waiting to invest as describe by the distance between option value curves from initial to terminal period is negative. As seen in Table  4 , the option value at the current price of diesel at the initial period of investment is US$141.38 million and decreases to 104.97 million at the terminal period. This results to a US$36.41 million loss from delaying or waiting to invest. This implies that waiting to invest in RE incurs losses.

Electricity price scenario

This scenario describes how adjusting the local electricity price affects the option values and the trigger price. Figures  2 and 3 show the dynamics of option values with increasing and decreasing electricity prices decreasing electricity prices (see Additional file 1 Table S2 for dynamic optimization result). Result shows that the option values shift upwards with increasing electricity prices. This shows that at higher electricity prices, the value of either renewable energy or diesel-based electricity both increases. However, the trigger prices of diesel also increase to US$172/barrel at US$220/MWh and US$185/barrel at US$250/MWh from the baseline electricity price of US$202/MWh. This suggests that increasing the electricity price encourages waiting or delaying to invest in RE.

Option values at increasing electricity price scenario. Legend: base_0: option values of energy investment at the initial period; base_T: option values of energy investment at the terminal period; elec+1_0: option values at 10% higher electricity price than the base at the initial period; elec+1_T: option values at 10% higher electricity price than the base at the terminal period; elec+2_0: option values at 25% higher electricity price than the base at the initial period; elec+2_T: option values at 25% higher electricity price than the base at the terminal period

Option values at decreasing electricity price scenario. Legend: base_0: option values of energy investment at the initial period; base_T: option values of energy investment at the terminal period; elec−1_0: option values at 10% lower electricity price than the base at the initial period; elec−1_T: option values at 10% lower electricity price than the base at the terminal period; elec−2_0: option values at 25% lower electricity price than the base at the initial period; elec−2_T: option values at 25% lower electricity price than the base at the terminal period; elec−3_0: option values at 40% lower electricity price than the base at the initial period; elec−3_T: option values at 40% lower electricity price than the base at the terminal period

On the other hand, decreasing electricity prices shifts the option value curves downwards and decreasing the trigger price of diesel. This result is apparent as decreasing electricity price results to a lower revenue and thus lower profit for both options. The trigger prices of diesel decrease to US$160/barrel at US$180/MWh, US$150/barrel at US$150/MWh, and US$139/barrel at US$120/MWh price of electricity (Figs.  3 and 4 ). This suggests that lowering the electricity price decreases the timing to invest in renewable energy. Further, the option values become negative at electricity price below US$120/MWh. This implies that policy makers or power producers must not set an electricity price below US$120/MWh, as this will result to a loss for producing electricity from diesel as well as a negative investment for RE.

Trigger prices of diesel over electricity price

Externality scenario

This scenario describes how inclusion of externality tax from combustion of diesel affects the option values and triggers prices in investment in RE projects. The result in Fig.  5 (see Additional file 1 Table S3 for dynamic optimization result) shows that option values shift to the left. First, this implies that imposing externality tax decreases the revenue from electricity generation using diesel and thus decreasing the option values. Second, the unchanged lower boundary of the curves implies externality does not affect the value of investment in renewable energy. This is due to our assumption that electricity generation from RE produces no externality.

Option values at negative externality scenario. Legend: base_0: option values of energy investment with no externality at the initial period; base_T: option values of energy investment with no externality at the terminal period; ex1_0: option values at 20$/MWh externality cost at the initial period; ex1_T: option values at 20$/MWh externality cost at the terminal period; ex2_0: option values at 40$/MWh externality cost at the initial period; ex2_T: option values at 40$/MWh externality cost at the terminal period; ex3_0: option values at 60$/MWh externality cost at the initial period; ex3_T: option values at 60$/MWh externality cost at the terminal period; ex3_0: option values at 80$/MWh externality cost at the initial period; ex4_T: option values at 80$/MWh externality cost at the terminal period

With externality, the trigger prices of diesel decrease to US$140/barrel at US$20/MWh, US$111/barrel at US$40/MWh, US$82/barrel at US$60/MWh, and US$54/barrel at US$80/MWh externality cost (Figs.  5 and 6 ). This implies that imposing externality tax for diesel makes investment in RE more optimal than continue using diesel. Finally, the threshold of externality cost is US$46.55/MWh at the current diesel price of US$101.64/barrel. This is the minimum externality cost that favors immediate investment in RE than continue using diesel.

Trigger prices of diesel over negative externality

We evaluate investment environments and decision-making process for substituting diesel power plant with RE for electricity generation in the Philippines. Using real options approach under uncertainty in diesel prices, we identify the option values, trigger prices of diesel, and value of waiting to invest in RE. We analyze the sensitivity of investment decisions with respect to various electricity prices and addition of externality tax for using diesel.

ROA highlights the flexibility in the timing of making investment decisions. Our analyses conclude that for a developing country that is highly dependent on imported fuel, shifting to RE is a better option than continue using imported diesel. Policies should aim at supporting investment in more sustainable sources of energy by imposing externality for using fossil-based fuel or decreasing the price of electricity. This may negatively affect the power producers but encourage them to shift from diesel to renewable energy.

We summarized a unique approach to energy investment by replacing diesel with RE for electricity generation. We believe that the ROA framework introduced in this research is a good benchmark for further application. First, ROA may take account of environmental and social costs. This may include the cost of deforestation for solar farm, wildlife and habitat loss, air and water pollution, damage to public health, and loss of jobs. Finally, analyzing investment decisions with several RE resources includes dynamic optimization with different scenarios of generation mix from various RE sources. We are optimistic that this research becomes one-step forward for further analysis of investment in more sustainable sources of energy.

Abbreviations

Augmented Dickey-Fuller

Certified emission reduction

Concentrated solar power

Discounted cash flow

European Environmental Agency

Feed-in tariff

Geometric Brownian motion

International Energy Agency

Internal rate of return

Net present value

Operations and maintenance

Palawan Electric Cooperative

Production tax credit

Solar photovoltaic

Research and development

• Renewable energy

Renewable energy credit

Return on investment

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Additional file

Additional file 1:.

Table S1. ADF unit root test result of oil prices from 1981-2016. Table S2. Note: elec+2_0: option values at 25% higher electricity price than the base at the initial period; elec+2_T: option values at 25% higher electricity price than the base at the terminal period elec+1_0: option values at 10% higher electricity price than the base at the initial period; elec+1_T: option values at 10% higher electricity price than the base at the terminal period; base_0: option values of energy investment at the initial period; base_T: option values of energy investment at the terminal period; elec-1_0: option values at 10% lower electricity price than the base at the initial period; elec-1_T: option values at 10% lower electricity price than the base at the terminal period; elec-2_0: option values at 25% lower electricity price than the base at the initial period; elec-2_T: option values at 25% lower electricity price than the base at the terminal period; elec-3_0: option values at 40% lower electricity price than the base at the initial period; elec-3_T: option values at 40% lower electricity price than the base at the terminal period. Table S3. base_0: option values of energy investment with no externality at the initial period; base_T: option values of energy investment with no externality at the terminal period; ex1_0: option values at 20/ MWhexternalitycosttheinitialperiod; ex 1 T : optionvaluesat20/MWh externality cost at the terminal period; ex2_0: option values at 40/ MWhexternalitycosttheinitialperiod; ex 2 T : optionvaluesat40/MWh externality cost at the terminal period; ex3_0: option values at 60/ MWhexternalitycosttheinitialperiod;ex 3 T : optionvaluesat60/MWh externality cost at the terminal period; ex3_0: option values at 80/ MWhexternalitycosttheinitialperiod; ex 4 T : optionvaluesat80/MWh externality cost at the terminal period. (DOCX 95 kb)

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Agaton, C.B., Karl, H. A real options approach to renewable electricity generation in the Philippines. Energ Sustain Soc 8 , 1 (2018). https://doi.org/10.1186/s13705-017-0143-y

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Today’s front page, Saturday, April 20, 2024

Solar power and the future of energy in the Philippines

• Clarissa Ruth S. Racho-Sabugo
• April 14, 2023
• 3 minute read

The use of solar power plants in the country took a significant step forward in 2014 with the operation of the 22-megawatt photovoltaic power plant in San Carlos City, Negros Occidental. SaCaSol  (San Carlos Solar Energy) in San Carlos Ecozone was the first and largest grid-connected solar power plant in the country then. Before, solar-powered energy systems were off-grid; a few installations were targeted towards remote communities. Since then, there has been continuous growth in the total solar energy capacity in the country.

Key to enabling the industry players in the solar energy market is the policy environment promoting solar energy in the Philippines. The main legislation towards this end was the Renewable Energy Act of 2008 (RA 9513). This provided the necessary legal and institutional framework for the development and use of renewable energy in the country. Furthermore, it provided investors with fiscal incentives (tax exemptions) and non-fiscal incentives (e.g., Feed-in-Tariff and Net Metering program).

The Feed-in-Tariff (FiT) policy was designed to guarantee a fixed price to renewable energy investors for their generated power purchased by distribution utilities. The mandated duration was typically 20 years. With this policy, RE projects are somehow de-risked and assured of their financial viability for the period covered. The FiT price approved by the Energy Regulatory Commission (ERC) during the first phase of the policy in 2012 was P9.68/kWh for the installation target of 50 megawatts.

While the FiT policy was designed for larger-scale PV installations, the non-fiscal incentive targeted towards smaller-scale installations of less than 100kWh was the Net Metering scheme. This policy took effect in July 2013 upon the release of the net metering rules by the ERC. In this scheme, excess electricity after their own consumption can be exported back to the grid and deducted from the household’s succeeding monthly electricity bill.

Additional policy support for renewable energy has been initiated, including the Renewable Portfolio Standards (RPS) that forces distribution utilities to source part of their electricity supply from renewable energy sources. The minimum RPS has been increased from 1 percent to 2.52 percent from 2023 onwards as indicated in the National Renewable Energy Plan (NREP) 2020-2040. The Green Energy Options Program (GEOP), which was promulgated in 2021, gives electricity end-users the option to get their electricity supply from retail RE suppliers. Other policies and programs in support of solar energy and renewable energy, in general, include the Renewable Energy Market, the Green Energy Auction Program, and the Preferential Dispatch of RE Generating Units.

However, the country continues to rely heavily on fossil fuels for power generation. Data from the Department of Energy (DOE) show that coal and oil account for more than 60 percent of aggregate power generation output in 2021. With the nation’s commitment to the goals of the Paris Agreement and its 1.5°C target, continuously growing energy demand, and the impending depletion of our Malampaya gas field, more investments in renewable energy development, including solar energy, must be done.

According to the DOE Power Statistics, as of 2021, the share of renewable energy to total gross power generation stands at 22 percent. The government, in its NREP 2020-2040, has set a target of a minimum 35 percent share of Renewable Energy in the total power generation mix by 2030 and increasing it to at least 50 percent by 2040. To meet this, the DOE projects a necessary increase in total installed capacity for renewable energy to 102,231 megawatts in 2040, of which 27,162 megawatts would come from solar.There is huge potential for solar power in the country. This is a clean energy source that is relatively cost-effective vis-à-vis fossil fuels, especially given the significant drop in the average global cost of electricity from solar projects in the past decade. Investments in this market carry with them employment opportunities from installation and operation to maintenance. Recent projects geared towards solar power generation alongside local food security include agro-solar farms and floating solar projects by industry players such as Citicore Power, AC Energy, and Aboitiz Power, among others. And although its potential remains to be maximized, the Net Metering program allows a more distributed power generation with solar photovoltaic systems adopted by households.

Meanwhile, for remote communities that are off-grid, solar power systems are especially beneficial as they can provide these areas with energy independence at a relatively lower cost.

Indeed, the Philippines has tremendous solar energy potential. And as we seek to transition to renewable energy according to the targets set in our NREP, solar energy has a critical role to play in this path. The future of energy rests on renewable sources and solar power is key to this transition.

Ms. Clarissa Ruth S. Racho-Sabugo is a graduate student at the Department of Economics of Ateneo de Manila University.

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Solar Energy in the Philippines Industry Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

The report covers Top Solar Companies in the Philippines, and the market is Segmented by Technology (Solar Photovoltaic (PV) and Concentrated Solar Power (CSP)). The market sizing and forecasts for each segment have been done based on installed capacity (GW).

• Philippines Solar Energy Market Size

Need a report that reflects how COVID-19 has impacted this market and its growth?

Philippines Solar Energy Market Analysis

The Philippines solar energy market is estimated to install 1700 Megawatt by the end of this year and is projected to reach 5229.62 Megawatt in the next five years, registering a CAGR of over 25.2% during the forecast period.

• Over the medium period, factors such as rapid economic development and a growing population are expected to drive the market during the forecast period. The growing demand for solar energy-based power generation and declining photovoltaic system prices are expected to drive the market during the forecast period.
• On the other hand, the country's inefficient electricity grid infrastructure is expected to hinder the market's growth in the coming years.
• Nevertheless, it is estimated that replacing/integrating diesel generators with renewable energy, like solar, can save the country over USD 200 million per year. Small islands in the Philippines are powered by generator-based mini-grids fueled by imported diesel and bunker (freighter) oil. These islands suffer from blackouts and unplanned power outages due to grid instability, inadequate generation capacity, and lack of subsidized fuel. Therefore, off-grid electrification through renewable energy sources, such as solar, is expected to create a significant opportunity in the future.
• Philippines Solar Energy Market Trends

Solar Photovoltaic (PV) to Register Significant Growth

• Solar energy provides an immediate solution to the country's growing energy needs. With steadily falling solar power equipment costs and the short time needed to install and commission solar power projects, solar photovoltaic systems are increasingly becoming popular among consumers and industries across the Philippines.
• With the increased solar PV installations across the country, the solar PV segment is expected to grow significantly due to increasing small-scale solar PV deployment during the forecast period. The Department of Energy (DOE) released the Philippine Energy Plan 2020-2040, establishing the country's goal for renewable energy to reach 35% of its power generation mix by 2030 and 50% by 2040. This development, in turn, will culminate in the increasing deployment of solar PV across the country.
• According to International Renewable Energy Agency, as of 2022, the country witnessed 1,625 MW of solar PV installations with an annual growth rate of 18% compared to the previous year. It is observing growing demand for solar PV from industrial and commercial segments, which may positively impact the growth of the solar energy market in the Philippines.
• Small-scale solar photovoltaic (PV) has been widely adopted by the residential sector in the Philippines, mainly due to the declining cost of PV technology and the introduction of net metering.
• However, despite the net metering policy, the residential and commercial sector has witnessed limited growth for PV installation of up to 100 kW in size since 2013. The slow growth has been mainly due to administrative, financial, and regulatory hurdles, preventing small owners and medium-sized enterprises from installing rooftop solar.
• Hence, due to the increasing solar photovoltaic installations across the country, the solar PV segment will likely dominate the Philippine solar energy market during the forecast period.

Declining Costs of Solar PV to Drive the Market

• The solar industry has cut costs dramatically through economies of scale in the past six years. As the market was flooded with equipment, prices plummeted. In 2011, the price of solar panels declined by 48.4%, while the PV system costs dropped by more than 30% since 2008. As of 2022, solar photovoltaic (PV) modules were more than 80% cheaper than in 2011, culminating in an increase in solar installations across the country and favoring the market's growth.
• The cost of electricity from solar PV declined by almost three-fourths during 2010-2022 and continues to decline. Continuous technological improvements, including higher solar PV module efficiencies, drive cost reductions. The industrialization of these highly modular technologies yielded impressive benefits from economies of scale and greater competition to improved manufacturing processes and competitive supply chains.
• As of 2021, global module prices dipped as low as USD 0.24/W. As the prices of solar panels are declining, consumers are showing interest in installing solar panels to incur tax benefits and low electricity bills, which impacts the growth of the solar energy market in the Philippines.
• Thus, the declining photovoltaic system prices are expected to increase the adoption of solar power in the Philippines and drive the market during the forecast period.

Philippines Solar Energy Industry Overview

The Philippines Solar Energy Market is moderately fragmented. Some of the major companies include (in no particular order) Solar Philippines Power Project Holdings, Solenergy Systems Inc., Vena Energy, Solaric Corp., and Trina Solar Ltd.

Philippines Solar Energy Market Leaders

Solar Philippines Power Project Holdings

Solenergy Systems Inc.

Vena Energy

Solaric Corp.

Trina Solar Ltd

*Disclaimer: Major Players sorted in no particular order

Philippines Solar Energy Market News

• June 2023: Solar Philippines Neva Ecija Corporation (SPNEC) intends to build a 3.5GW solar farm in the Philippines. The project extension will take place in the same region as its existing 500MW solar facility in the northern province of Luzon. The total project, including the 500MW section already under development, encompasses roughly 3,500 hectares of land that have been bought or are being acquired.
• May 2023: The Philippines' Department of Energy chose SunAsia Energy, a Philippines-based solar developer, and Blueleaf Energy to build and operate six large-scale floating solar projects totaling 610.5MW. Laguna Lake will be home to the plants. The department has given solar energy operating contracts for 1.3 GW floating projects.

Philippines Solar Energy Market Report - Table of Contents

1. INTRODUCTION

1.1 Scope of the Study

1.2 Market Definition

1.3 Study Assumptions

2. EXECUTIVE SUMMARY

3. RESEARCH METHODOLOGY

4. MARKET OVERVIEW

4.1 Introduction

4.2 Evolution of Solar Power Market in the Philippines

4.3 Renewable Energy Mix, 2022

4.4 Solar Energy Installed Capacity and Forecast, in GW, till 2028

4.5 Recent Trends and Developments

4.6 Government Policies and Regulations

4.7 Market Dynamics

4.7.1 Drivers

4.7.1.1 The Growing Demand for Solar Energy-Based Power Generation

4.7.1.2 Declining Photovoltaic System Prices

4.7.2 Restraints

4.7.2.1 The Country's Inefficient Electricity Grid Infrastructure

4.8 PESTLE Analysis

5. MARKET SEGMENTATION - BY TECHNOLOGY

5.1 Solar Photovoltaic (PV)

5.2 Concentrated Solar Photovoltaic (CSP)

6. COMPETITIVE LANDSCAPE

6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements

6.2 Strategies Adopted by Leading Players

6.3 Market Share Analysis

6.4 Key Company Profiles

6.4.1 Solar Philippines Power Project Holdings

6.4.2 Solenergy Systems Inc.

6.4.3 Vena Energy

6.4.4 Solaric Corp.

6.4.5 Trina Solar Ltd.

6.4.6 AC Energy

6.4.7 Cleantech Global

6.4.8 Citicore Power Inc.

6.4.9 Aboitiz Power Corporation

6.4.10 Helios Solar Energy Corporation (HSEC)

7. MARKET OPPORTUNITIES AND FUTURE TRENDS

7.1 Off-Grid Electrification Through Renewable Energy Sources

Philippines Solar Energy Industry Segmentation

Solar energy is heat and radiant light from the Sun that can be harnessed with technologies such as solar power (used to generate electricity) and solar thermal energy (used for applications such as water heating). The Philippines Solar Energy Market is segmented by technology. The market is segmented by technology into solar photovoltaic (PV) and concentrated solar power (CSP). The market sizing and forecasts for each segment have been done based on installed capacity (GW).

Philippines Solar Energy Market Research FAQs

What is the current philippines solar energy market size.

The Philippines Solar Energy Market is projected to register a CAGR of greater than 25.20% during the forecast period (2024-2029)

Who are the key players in Philippines Solar Energy Market?

Solar Philippines Power Project Holdings, Solenergy Systems Inc., Vena Energy, Solaric Corp. and Trina Solar Ltd are the major companies operating in the Philippines Solar Energy Market.

What years does this Philippines Solar Energy Market cover?

The report covers the Philippines Solar Energy Market historical market size for years: 2020, 2021, 2022 and 2023. The report also forecasts the Philippines Solar Energy Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.

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The Future of Solar Energy in the Philippines

by SolarNRG Marketing Team | Dec 6, 2022 | Blog

A typical Filipino household consumes 211-kilowatt hours (kWh) of electricity per month. Meanwhile, the country’s services sector used an estimated 20.73 thousand gigawatt hours (GWh) in 2022.

As the country’s population grows, the demand for energy to sustain daily household and commercial operations also increases. This rise in demand comes with the need to explore other options, such as solar energy.

Considering alternative energy sources ensures a continuous supply of power in the present while also projecting its sustainable implications for the future.

Solar energy in the Philippines is becoming more popular. Besides its sustainable nature, solar energy is also recognized for its suitability to the country, government support, and expected positive future.

The Present State of Solar Energy in the Philippines

The Philippine government promotes solar energy for its reduced environmental impact. In 2021, solar energy shared 0.7% of the country’s total power consumption .

The increase in solar energy use makes sense as the Philippines is constantly vulnerable to an average of 16 typhoons yearly on top of occasional rain. When these calamities strike, power interruption becomes one of the people’s top concerns. Solar panels are built to withstand heavy weather conditions, thus, making them a suitable energy source for the Philippines.

Given that other renewable energy sources, such as hydro and geothermal, take years to build, the convenience of solar energy installation becomes the best option for both short- and long-term use.

There’s much buzz on the potential of solar energy in the Philippines—and for good reasons.

PH Aims to Go Green

Among other Southeast Asian countries, the Philippines is becoming a global leader in renewable energy, generating 47% of its energy from green or renewable sources.

This feat can be attributed to the country’s initiatives and programs to promote solar energy and renewable energy in general. For instance, tax incentives, import benefits, financial support, and the Green Energy Option Program all support the use of solar energy in the Philippines. 

In addition, there’s a sense of urgency to achieve the vision of a green Philippines due to the continuous impacts of climate change, global warming, and on the local levels, devastating typhoons.

By developing a combination of fossil and renewable energy sources, the Philippine government hopes to become energy self-sufficient. It’s part of the National Renewable Energy Program (NREP) 2020-2040 , which aims that by 2030, 35% of the power generation mix shall be from green sources, and by 2040, this shall reach the 50% mark.

Solar energy is a primary driver in this goal. Currently, 896 megawatts (MW) of the 7.1 gigawatts (GW) identified renewable energy capacity in the Philippines came from solar energy, coming second to hydropower at 4.3 GW.

Suitability of Solar Energy in the Philippines

According to a study , the Philippines can earn a 100% national power supply from renewable energy. The NREP plans to achieve a target of 1,528 MW of solar energy by 2030. 

This scenario is becoming more evident as the Department of Energy (DOE)’s 2009-2030 Power Development Plan (PDP) anticipates that the country’s energy consumption will reach 149,067 GWh by 2030. These numbers are significantly higher relative to the approximate demand of 86,809 GWh in 2018 and the actual demand of 55,417 GWh in 2008.

Since Filipinos are suffering from the continuous increase in the volatile prices of fossil fuels, choosing solar power can free the country from its dependence on fossils. 

Solar energy is a cheaper alternative, as the country saw a 48.4% drop in solar panel prices in 2011. Aside from being cost-efficient, solar energy in the Philippines also has these other practical benefits :

• Quick installation. A 1-MW solar power plant can start operating after at least six months of construction and development. So in perspective, you can install a residential solar power panel in a week or two.
• Flexible placements. Some solar facilities can be shaped or bent to fit in whichever area you may want to place them.
• Low maintenance. Solar panels require less maintenance than other energy sources.
• Abundant in source. The country receives  4.5 to 5.5 daily average sun hours.

What is the Future of Solar Energy in the Philippines?

Experts say that the solar energy market in the Philippines will continue to prosper due to the continuous investments in this sector on top of its existing governmental support. For instance, a crowdfunding initiative raised more than USD 250,000 to finance renewable energy project developments in the Philippines and India.

The DOE also continues implementing its ongoing initiatives promoting smart-grid technologies across the country. 

Other investments and programs to boost the use of solar energy in the Philippines include:

• The 23-million Access to Sustainable Energy Project of the country, together with the World Bank
• The recently completed Market Transformation through Introduction of Energy-Efficient Electric Vehicles Project , valued at $405 million, in partnership with the Asian Development Bank.

Despite the concerns about inefficient electricity grid infrastructures in the country, solar power in the Philippines is expected to be more prevalent in rural areas due to increasing deployments of solar power installations in far-flung places and the financial benefits from these projects.

The Philippines became one of Southeast Asia’s biggest off-grid solar energy markets, along with Myanmar, securing at least 30,000 to 40,000 units as of the second half of 2019.

Furthermore, a shift from diesel-powered generators to solar panels can help the country save up to $200 million annually, a significant number given the frequent power interruptions brought about by typhoons.

Solar Energy in the Philippines is On!

Is solar power the future of energy in the Philippines?

It may be hard to answer such a big question. Still, considering that solar energy addresses multiple concerns and benefits, it is, beyond doubt, an excellent candidate for being the future of power in the Philippines.

Solar energy is cost-efficient, government-supported, effective in targeting the country’s increasing demand for power, abundant in source, and practical in providing job opportunities.

It’s a good thing that the solar energy market in the Philippines, as predicted by experts, will prosper in the direction of the national target of 35% power generation mix share by 2030 and 50% by 2040. If the country attains these goals, the Philippines will establish itself as one of the leading nations in renewable energy use.

Be part of the movement, play your role in the green agenda, and reap the benefits of switching to solar energy. Send us a message to learn more.

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Home » Articles » Solar Microgrids Can Ease the Philippines’ Energy Crisis

Solar Microgrids Can Ease the Philippines’ Energy Crisis

The Philippines is facing an energy crisis, and solar micro-grids are a part of the mix of solutions needed to supply our nation’s power.

“In the Philippines, almost 1.3 million households could face power outages in 2023 due to a lack of funding from the National Power Corporation,” Energy Tracker Asia reports .

The crisis has a few causes, and one is the Malampaya natural gas fields. Malampaya supplies almost a third of the energy consumed in Luzon, the largest and most populous island in the Philippines archipelago. The natural gas fields are expected to run dry by 2024. Another issue has been the impact of the global pandemic and other global events. The international cost of natural gas has skyrocketed, leaving the Philippines without cheap import options. The energy sector has had to adjustment to ensure continued consumer energy provision.

The Philippines’ energy mix is composed of coal (47%), natural gas (22%), renewable energy (hydro, geothermal, wind, solar) (24%), and oil (6.2%), according to the International Energy Administration . Our energy capacity is 23GW. About 43 GW of additional energy capacity will be required by 2040, the IEA says, and our country is behind schedule in developing solutions.

Renewable energy is part of the mix, but more is needed to significantly reduce the country’s carbon footprint, since non-renewable sources remain dominant. Using fossil-fueled electricity may continue, but the goal of shifting to environmentally friendly alternatives has remained the same.

Solar energy trends in the Philippines

Companies in the Philippines have taken the initiative to develop solar projects to combat the effects of carbon emissions. Many are set to begin operation within the coming years. There are also efforts to create expansive solar farms in the Luzon region to help the country transition to reusable energy.

By 2030, the Philippines is projected to add 17,809 MW of solar capacity. The solar energy market in the Philippines could record a compound annual growth rate (CAGR) of 15 percent during the 2022-2027 period. For context, the global CAGR for solar is estimated at 6.5 percent for the 2022-2028 period, according to Vantage Market Research .

Solar energy has already become widely used in several parts of the Philippines. With the sinking cost of solar photovoltaic panels, a new generation of renewable energy is now possible for distribution to private residences. Solar energy’s production cost is set to decrease significantly by 2025, which could make solar the cheapest energy source in the Philippines. Added to the savings, appliances such as air conditioners designed to run on DC power are reducing utility costs.

Solar Microgrids and Their Uses

Photo courtesy of the author

Solar-powered microgrids  differ from solar home systems in that one system can serve multiple buildings. A solar microgrid is a small, freestanding network of electrical loads, energy storage batteries, and photovoltaic systems. Usually, it is connected to a macro grid (centralized grid), but it can also function independently.

Solar microgrids provide a handful of benefits besides the provision of clean energy.

• They can improve local energy distribution and bring energy to places the centralized grid cannot reach.
• They can be fast and easier to install than traditional grids and powerplants.
• They can reduce congestion and peak loads in the macro grid, offloading the centralized grid and reducing energy demand.

Microgrids are particularly suited to the Philippines. They can be installed in multiple configurations depending on the need, including as the power source for an island. The Philippines is composed of 7,640 islands, and traditional power grids are not practical in many of the communities living on our islands.

Switching to solar microgrids

Solar microgrids are the key to creating a sustainable future. Not only do they generate clean and renewable energy, but they also make it accessible to areas without reliable power sources. Through solar microgrids, more people can reduce their environmental impact and help preserve the planet for a little longer.

About the Author

Mayann Uy works with SolarNRG Philippines. Its parent company, SolarNRG Netherlands, is one of Europe’s largest suppliers and installers of solar power systems. 

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Despite High Potential, 75 Vulnerable Economies Face ‘Historic Reversal’

In Half of IDA Countries, Income Gap with Wealthiest Economies is Widening

WASHINGTON, April 15, 2024 — Despite their high potential to advance global prosperity, one-half of the world’s 75 most vulnerable countries are facing a widening income gap with the wealthiest economies for the first time in this century, a new World Bank report has found . Taking full advantage of their younger populations, their rich natural resources, and their abundant solar-energy potential can help them overcome the setback.

The report, The Great Reversal: Prospects, Risks, and Policies in International Development Association Countries , offers the first comprehensive look at the opportunities and risks confronting the 75 countries eligible for grants and zero to low-interest loans from the World Bank’s International Development Association (IDA). These countries are home to a quarter of humanity—1.9 billion people. At a time when populations are aging nearly everywhere else, IDA countries will enjoy a growing share of young workers through 2070—a huge potential “demographic dividend.” These countries are also rich in natural resources, enjoy high potential for solar-energy generation, and boast a large reservoir of mineral deposits that could be crucial for the world’s transition to clean energy.

Yet a historic reversal is underway for them. Over 2020-24, average per capita incomes in half of IDA countries—the largest share since the start of this century—have been growing more slowly than those of wealthy economies. This is widening the income gap between these two groups of countries. One out of three IDA countries is poorer, on average, than it was on the eve of the COVID-19 pandemic . The extreme-poverty rate is more than eight times the average in the rest of the world: one in four people in IDA countries struggles on less than $2.15 a day. These countries now account for 90% of all people facing hunger or malnutrition. Half of these countries are either in debt distress or at high risk of it. Still, except for the World Bank Group and other multilateral development donors, foreign lenders—private as well as government creditors—have been backing away from them.

“The world cannot afford to turn its back on IDA countries,” said Indermit Gill, the World Bank Group’s Chief Economist and Senior Vice President . “The welfare of these countries has always been crucial to the long-term outlook for global prosperity. Three of the world’s economic powerhouses today—China, India, and South Korea—were all once IDA borrowers. All three prospered in ways that whittled down extreme poverty and raised living standards. With help from abroad, today’s batch of IDA countries has the potential to do the same.”

More than half of all IDA countries—39 in all—are in Sub-Saharan Africa. Fourteen of them—mainly small island states—are in East Asia, and eight are in Latin America and the Caribbean. In South Asia, all countries except for India are IDA countries. Thirty-one IDA countries have per capita incomes of less than $1,315 a year. Thirty-three are fragile and conflict-affected states.

IDA countries share similar opportunities. The “demographic dividend”—a deep and growing reserve of young workers—is one of them. Abundant natural resources is another. These countries account for about 20% of global production of tin, copper, and gold. In addition, some IDA countries possess critical mineral deposits essential for the global energy transition. Because of their abundant sunshine, most IDA countries are well situated to take advantage of solar energy. On average, their long-term daily solar-electricity generation potential is among the highest in the world.

This potential, however, comes with risks that must be managed. To reap the demographic dividend, IDA governments will need to undertake policies to improve education and health outcomes and make sure that jobs are available for the rising number of young people who will enter the workforce in the coming decades. To seize the full potential of their natural-resource wealth, IDA countries will need to improve policy frameworks and build stronger institutions capable of better economic management. All of this will require ambitious domestic policy reforms—and significant financial support from the international community.

“IDA countries have incredible potential to deliver strong, sustainable, and inclusive growth. Realizing this potential will require them to implement an ambitious set of policies centered on boosting investment,” said Ayhan Kose, the World Bank’s Deputy Chief Economist and Director of the Prospects Group . “ This means improving fiscal, monetary, and financial policy frameworks and advancing an array of structural reforms to strengthen institutions and enhance human capital."

IDA countries today have large investment needs. In the poorest of them, closing existing development and infrastructure gaps and building resilience to climate change will require investment that amounts to nearly 10% of GDP. The costs of climate disasters have doubled in IDA countries over the past decade: Economic losses from natural disasters average 1.3% of GDP a year—four times the average of other emerging market and developing economies. Such needs will require IDA countries to generate sustained investment booms—the type that boosts productivity and incomes and reduces poverty. Historically, such investment booms have often been sparked by a comprehensive package of policy measures—to bolster fiscal and monetary frameworks, ramp up cross-border trade and financial flows, and improve the quality of institutions. Such reforms are never easy, the report notes. They need careful sequencing and implementation. But previous IDA countries have shown they are possible.

IDA countries will need significant international financial support to make progress and lower the risk of “protracted stagnation,” the report notes . Stronger cooperation on global policy issues—including fighting climate change, facilitating more timely and effective debt restructurings, and supporting cross-border trade and investment—will also be crucial to help IDA countries avert a lost decade in development .

Website: https://www.worldbank.org/en/research/publication/prospects-risks-and-policies-in-IDA-countries

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Shell philippines embraces solar power: longi partnership with netsolar speeds up the renewable energy transition.

MANILA, Philippines , April 16, 2024 /PRNewswire/ -- Expanding its renewable energy footprint, LONGi, a globally renowned solar panel manufacturer, has partnered with Netsolar to install modules on Shell gas stations throughout the Philippines , transforming them into green-energy-powered facilities.

In the Philippines , coal-fired power plants contribute a substantial 60% of the nation's electricity. This significant collaboration brings LONGi's Hi-MO X6 high-efficiency solar panels directly to Shell's 27 gas stations. With an average system size of 30 kWp and a combined total of 755 kWp generated nationally, this allows each station to slash their electricity bills by a remarkable 40%.

For gas stations, safety is the top priority. LONGi has adopted Hi-MO X6 to meet the requirements of safety and reliability.

The innovative Hi-MO X6 solar panels, featuring cutting-edge HPBC cell technology with a grid-free front surface, maximize incident light utilization and reduce optical loss, bringing the standard HPBC cell efficiency up to 25.5%. Engineered for excellence, Hi-MO X6 stands out in power generation, even in the most challenging high-temperature and humid climates, delivering unmatched value to our customers.

The selection of Hi-MO X6 panels for the project was driven by their superior efficiency, ensuring maximum energy output despite the limited available space. This choice underscores a commitment to sustainability and creating an eco-friendly future in the Philippines . Netsolar, our strategic partner, praised Hi-MO X6's outstanding performance and remarkable cost-effectiveness across its 25-year lifespan, making LONGi the logical choice in helping Shell turn this vision into reality.

Shell Philippines , widely acknowledged as one of Asia and the Pacific's most innovative and sustainable companies, is at the helm of the energy transition. The message delivered from Shell centers around reducing its carbon footprint and saving energy while emphasizing the importance of solar and sustainability to their business. This is congruent with LONGi's mission "to make the best of solar energy to build a green world".

Shell's mobility stations, increasingly well-known as customer-centric hubs, cater to various customer needs, both fuel and non-fuel related. Integral to this endeavor is LONGi's unwavering commitment to a customer-first approach, bringing additional value to Shell's client through innovative, efficient, and sustainable energy solutions.

LONGi's installation of solar panels for Shell encapsulates the seamless merge of environmentally-friendly technology and customer satisfaction. Equally important, it underscores the joint commitment of both companies to reducing the carbon footprint and facilitating the transition to renewable sources of energy.

About LONGi

Founded in 2000, LONGi is committed to being the world's leading solar technology company, focusing on customer-driven value creation for full scenario energy transformation.

Under its mission of 'making the best of solar energy to build a green world', LONGi has dedicated itself to technology innovation and established five business sectors, covering mono silicon wafers cells and modules, commercial & industrial distributed solar solutions, green energy solutions and hydrogen equipment. The company has honed its capabilities to provide green energy and has more recently, also embraced green hydrogen products and solutions to support global zero carbon development. www.longi.com

View original content to download multimedia: https://www.prnewswire.com/apac/news-releases/shell-philippines-embraces-solar-power-longi-partnership-with-netsolar-speeds-up-the-renewable-energy-transition-302117678.html

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Why solar and wind energy isn’t winning

Thursday, 18 Apr 2024

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Modern societies need power 24/7, so unreliable and intermittent solar and wind bring large, often hidden costs. — Reuters

DESPITE us constantly being told that solar and wind are now the cheapest forms of electricity, governments around the world needed to spend US$1.8 trillion on the green transition last year.

“Wind and solar are already significantly cheaper than coal and oil” is how US President Joe Biden conveniently justifies spending hundreds of billions of dollars on green subsidies.

Indeed, arguing that wind and solar are the cheapest is a meme employed by green lobbyists, activists and politicians around the world. Unfortunately, as the US$1.8 trillion price tag shows, the claim is wildly deceptive.

Wind and solar energy only produce power when the sun is shining or the wind is blowing. All the rest of the time, their electricity is infinitely expensive and a backup system is needed.

This is why global electricity remains almost two-thirds reliant on fossil fuels – and why we, on current trends, are an entire century away from eliminating fossil fuels from electricity generation.

The first reason the cheapest electricity claim is wrong is the intermittency of green energy. Imagine if a solar-driven car was launched tomorrow, running cheaper than a gas vehicle. It seems alluring, until you realise the car won’t run at night, or when it’s overcast.

If you bought the car, you would still need a gas vehicle as backup. You would have to pay for two cars.

Hidden costs

That’s what happens with renewable energy. Modern societies need power 24/7, so unreliable and intermittent solar and wind bring large, often hidden costs.

This is a smaller problem for wealthy countries that have already built fossil power plants, and can simply use more of them as backup.

It will, however, make electricity more expensive, as intermittent renewables make everything else intermittent, too.

But in the poorest, electricity-starved countries, there is little fossil fuel energy infrastructure to begin with. It is often reported that large, emerging industrial powers like China, India, Indonesia and Bangladesh are getting more power from solar and wind. But these countries get much more additional power from coal.

Last year, China got more additional power from coal than it did from solar and wind. India got three times as much, whereas Bangladesh got 13 times more coal electricity than it did from green energy sources, and Indonesia an astonishing 90 times more.

If solar and wind really were cheaper, why would these countries miss out? Because reliability matters.

The typical way to measure the cost of solar simply ignores its unreliability and tells us the price of solar energy when the sun is shining. The same is true for wind energy. That does indeed make their cost slightly lower than any other electricity source.

The US Energy Information Administration puts solar at 3.6 US cents per kilowatt-hour, just ahead of natural gas at 3.8 US cents.

But if you reasonably include the cost of reliability, the real costs explode – one peer-reviewed study shows an increase of 11 to 42 times, making solar by far the most expensive source of electricity, followed by wind.

Storage issue

The enormous, additional cost comes from the need for storage. Electricity is required even when the sun is not shining and the wind is not blowing, yet our battery capacity is woefully inadequate.

Just to pay for the batteries would cost the United States five times its current gross domestic product (GDP). And it would have to repurchase the batteries when they expire after just 15 years.

Globally, the cost just to have sufficient batteries would run to 10 times the global GDP, with a new bill every 15 years.

The second reason the claim is false is that it leaves out the cost of recycling spent wind turbine blades and exhausted solar panels. Already now, one small town in Texas is overflowing with thousands of enormous blades that cannot be recycled.

In poor countries across Africa, solar panels and their batteries are already being dumped, leaking toxic chemicals into the soil and water supplies.

Because of lifetimes lasting just a few decades, and pressure from the climate lobby for an enormous ramp-up in use, this will only get much worse. One study shows that this trash cost alone doubles the true cost of solar.

If solar and wind really were cheaper, they would replace fossil fuels without the need for a grand push from politicians and the industry. This claim is incessantly repeated because it is convenient.

If we want to fix climate change, we instead must invest a lot more in low carbon dioxide (CO2) energy research and development.

Only a significant boost in research and development can bring about the technological breakthroughs that are needed – in reducing trash, in improving battery storage and efficiency, but also in other technologies like modular nuclear – that will make low CO2 energy sources truly cheaper than fossil fuels.

Until then, claims that fossil fuels are already outcompeted are just wishful thinking. — Philippine Daily Inquirer/ANN

Bjorn Lomborg is president of the Copenhagen Consensus and visiting fellow at Stanford University’s Hoover Institution. The views expressed here are the writer’s own.

Tags / Keywords: GreenEnergy , Wind , Solar , FossilFuels , RenewableEnergy , Cost , BatteryStorag , NuclearPower , ResearchAndDevelopment

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Ensemble techniques for solar energy forecasts

A Chinese research group has sought to understand the relative performance of two weather prediction techniques based on ensemble modeling for solar energy forecasts. The scientists applied the two methods in combination with three classical post-processing methods.

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Image: Harbin Institute of Technology, Solar Energy Advances, Creative Commons License CC BY 4.0

A group of researchers in China investigated the reliability of analog ensemble (AnEn) forecasting and dynamical ensemble (DyEn) forecasting for PV power generation and found both technologies offer advantages and disadvantages.

Ensemble techniques are commonly used in weather forecasting and are known for generating a set of forecasts instead of the most likely weather scenario. “AnEn operates under the principle that weather patterns often repeat, while DyEn generates equally likely trajectories of future weather by perturbing the initial and boundary conditions. They constitute the two most common approaches to making ensembles,” the scientists explained.

For their investigation, the research group used four years of forecasts generated by the European Centre for Medium-Range Weather Forecasts (ECMWF) from the beginning of 2017 to the end of 2022. Data were taken from seven points in the United States and compared to radiometry measurements collected in the seven stations of the Surface Radiation Budget Monitoring (SURFRAD).

The locations were Bondville, Illinois; Desert Rock, Nevada; Fort Peck, Montana; Goodwin Creek, Mississippi; Pennsylvania State University, Pennsylvania; Sioux Falls, South Dakota; and Table Mountain, Colorado. The scientists processed the date using both the AnEn and DyEn forecasting in raw form and then applied three post-processing methods: Bayesian model averaging (BMA), nonhomogeneous Gaussian regression (NGR), and quantile regression (QR).

“It should be noted that comparing just the raw AnEn and DyEn forecasts has little practical relevance, because probabilistic-to-probabilistic (P2P) post-processing has long been recognized as an integral part of the solar forecasting process,” the academics specified. “One of the goals of P2P post-processing is to improve calibration, which constitutes one of the two types of goodness of probabilistic forecasts, with the other one being sharpness.”

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The analysis showed that the raw AnEn technique can achieve better calibration than the raw DyEn, with average reliability values of 0.6 W/m2 and 8.2 W/m2, respectively. However, DyEn was better after post-processing, showing an average continuous ranked probability score of 49.0 W/m2, compared to 51.7 W/m2 obtained by AnEn.

“The raw AnEn forecasts outperform the raw DyEn due to their better calibration; however, after calibration, the potentially poor-quality analogs introduce noises into the post-processing models and thus limit their performance, whereas the DyEn forecasts are generated using the same numerical weather prediction (NWP) model, and therefore have better model-consistency that is conducive to bias-correction and spread adjustment,” the researchers added.

They also found that calibration via BMA and NGR is less suitable for both AnEn and DyEn. QR, on the other hand, “emerges as the most appealing option,” said the scientists.

The findings were presented in “ Comparing calibrated analog and dynamical ensemble solar forecasts ,” published in Solar Energy Advances . The research team comprises researchers from Harbin Institute of Technology and the State Grid Corporation of China .

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com .

Lior Kahana

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A hydrocarbon molecule as supplier and energy storage solution for solar energy

U ntil now, the generation and storage of electricity from solar energy has been dependent on various devices, leading to conversion losses. That may change soon, as chemists at Friedrich-Alexander-Universität Erlangen-Nürnberg (FAU) and other research institutes in Germany, Australia, the United Kingdom, Italy, Sweden and the U.S. are conducting research into a hydrocarbon molecule that can either convert sunlight into electricity or save the energy for a long time in a chemical form.

This could pave the way for entirely new organic solar modules. The fundamentals for conversion and storage using the molecule have now been published in the journal Nature Chemistry .

Hopes remain high that solar energy will be a major driver of the energy transformation. However, as sunlight is a highly volatile source of energy, a solution must be found for storing energy efficiently.

"Until now, we have transferred electricity from solar modules that is not consumed immediately into a battery, where it can be used as and when required," explains Prof. Dr. Julien Bachmann, Chair of Chemistry of Thin Film Materials (CTFM) at FAU. "By repeatedly changing between chemical and electrical energy, at least 30% of the original converted energy is lost during this battery storage process."

Together with Michael Bosch, a doctoral candidate at the Chair CTFM, Bachmann hopes to coax a new property from a known material, making it either converting sunlight to electrical energy or storing the energy, depending on requirements. The material in question is norbornadiene, a hydrocarbon isomer consisting of two molecule rings. If norbornadiene is exposed to ultraviolet light, a partial reorganization of the atomic bonds leads to it converting to the similarly structured but more highly strained quadricyclane.

"The conversion process is already known, however, research has focused until now on recovering the stored energy in the form of heat," explains Bachmann. "Our new approach involves controlling the process to allow the stored energy to be made available as electricity as well, even after months have passed."

Scientists still do not fully understand the physical-chemical mechanisms behind the transitions between the isomers. Researchers from Australia, the United Kingdom, Italy, Sweden and the U.S. are working together with colleagues from FAU to gain a better understanding of the process by using photoelectron spectroscopy.

Bachmann states, "The more we know about the dynamics of photo- and electrochemical transformation, the better we can modify the design of the molecule to suit the desired functions."

The aim of future research is, for example, not only to use ultraviolet excitation, but also a wide spectrum of sunlight for electron excitation. "There is a lot of potential," explains Bachmann. "The pure energy density of the norbornadiene-quadricyclane system is comparable to a lithium-ion battery."

If researchers succeed in reliably controlling the reversible norbornadiene-quadricyclane conversion, this would not only lead to an efficient solar module that is also suitable for storing electricity. The organic hydrocarbon-based material would also be cost-effective to produce, would not require rare metals and would be easy to dispose of or recycle in an environmentally friendly way at the end of its lifecycle.

More information: Kurtis D. Borne et al, Ultrafast electronic relaxation pathways of the molecular photoswitch quadricyclane, Nature Chemistry (2024). DOI: 10.1038/s41557-023-01420-w

Provided by Friedrich–Alexander University Erlangen–Nurnberg

Energy scientists unravel the mystery of gold's glow

Luminescence, or the emission of photons by a substance exposed to light, has been known to occur in semiconductor materials like silicon for hundreds of years. The nanoscale behavior of electrons as they absorb and then re-emit light can tell researchers a great deal about the properties of semiconductors, which is why they are often used as probes to characterize electronic processes, like those occurring inside solar cells.

In 1969, scientists discovered that all metals luminesce to some degree, but the intervening years failed to yield a clear understanding of how this occurs. Renewed interest in this light emission, driven by nanoscale temperature mapping and photochemistry applications, has reignited the debate surrounding its origins. But the answer was still unclear -- until now.

"We developed very high-quality metal gold films, which put us in a unique position to elucidate this process without the confounding factors of previous experiments," says Giulia Tagliabue, head of the Laboratory of Nanoscience for Energy Technologies (LNET) in the School of Engineering.

In a recent study published in Light: Science and Applications, Tagliabue and the LNET team focused laser beams at the extremely thin -- between 13 and 113 nanometers -- gold films, and then analyzed the resulting faint glow. The data generated from their precise experiments was so detailed -- and so unexpected -- that they collaborated with theoreticians at the Barcelona Institute of Science and Technology, the University of Southern Denmark, and the Rensselaer Polytechnic Institute (USA) to rework and apply quantum mechanical modelling methods.

The researchers' comprehensive approach allowed them to settle the debate surrounding the type of luminescence emanating from the films -- photoluminescence -- which is defined by the specific way electrons and their oppositely charged counterparts (holes) behave in response to light. It also allowed them to produce the first complete, fully quantitative model of this phenomenon in gold, which can be applied to any metal.

Unexpected quantum effects

Tagliabue explains that, using a thin film of monocrystalline gold produced with a novel synthesis technique, the team studied the photoluminescence process as they made the metal thinner and thinner. "We observed certain quantum mechanical effects emerging in films of up to about 40 nanometers, which was unexpected, because normally for a metal, you don't see such effects until you go well below 10 nm," she says.

These observations provided key spatial information about exactly where the photoluminescence process occurred in the gold, which is a prerequisite for the metal's use as a probe. Another unexpected outcome of the study was the discovery that the gold's photoluminescent (Stokes) signal could be used to probe the material's own surface temperature -- a boon for scientists working at the nanoscale.

"For many chemical reactions on the surface of metals, there is a big debate about why and under what conditions these reactions occur. Temperature is a key parameter, but measuring temperature at the nanoscale is extremely difficult, because a thermometer can influence your measurement. So, it's a huge advantage to be able to probe a material using the material itself as the probe," Tagliabue says.

A gold standard for solar fuel development

The researchers believe their findings will allow metals to be used to obtain unprecedentedly detailed insights into chemical reactions, especially those involved in energy research. Metals like gold and copper -- the LNET's next research target -- can trigger certain key reactions, like the reduction of carbon dioxide (CO 2 ) back into carbon-based products like solar fuels, which store solar energy in chemical bonds.

"To combat climate change, we are going to need technologies to convert CO 2 into other useful chemicals one way or another," says LNET postdoc Alan Bowman, the study's first author.

"Using metals is one way to do that, but if we don't have a good understanding of how these reactions happen on their surfaces, then we can't optimize them. Luminescence offers a new way to understand what is happening in these metals."

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Story Source:

Materials provided by Ecole Polytechnique Fédérale de Lausanne . Original written by Celia Luterbacher. Note: Content may be edited for style and length.

Journal Reference :

• Alan R. Bowman, Alvaro Rodríguez Echarri, Fatemeh Kiani, Fadil Iyikanat, Ted V. Tsoulos, Joel D. Cox, Ravishankar Sundararaman, F. Javier García de Abajo, Giulia Tagliabue. Quantum-mechanical effects in photoluminescence from thin crystalline gold films . Light: Science & Applications , 2024; 13 (1) DOI: 10.1038/s41377-024-01408-2

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