Significant increase in renewable energy investments seen

By Meg J. Adonis – 11:07 AM February 17, 2024
from inquirer.net / Philippine Daily Inquirer

MANILA, Philippines  —Renewable energy is soon expected to outpace natural gas in terms of generation as investments in solar and wind capacities are projected to become more aggressive in the coming years, according to an international think tank.

BMI, a unit of the Fitch Group, on Friday said nonhydropower renewables will contribute 23.7 percent of the total electricity production globally by 2028, surpassing natural gas, which is expected to represent 21.9 percent.

“This trend is anticipated in the Asian region as well,” BMI said in a report. “Despite an increase in the share of natural gas-fired power in total electricity generation throughout the decade, nonhydropower renewables are projected to exceed natural gas in output due to aggressive investment in solar and wind capacities.”

In the Philippines, for example, the government is looking at natural gas, a fossil fuel that emits nearly as much carbon dioxide as coal, as a transition fuel in the shift toward renewable energy.

However, local developers are also leaning toward renewable energy technology, such as solar, wind and hydropower.

Natural gas now 18.8% of PH energy capacity

August 2023 data from the Department of Energy show that natural gas accounted for 18.8 percent of the country’s installed capacity versus the renewable energy share of 22 percent. Coal still accounts for nearly 50 percent.

This year, the International Energy Agency (IEA) projected global gas demand to grow by 2.5 percent due to colder temperatures and easing prices.

But IEA also warned that gas supply would again be tight in 2024 on the back of a “limited increase” in global output.

According to BMI, coal generation per capita is also projected to decline globally by 20 percent by 2032.

This reflects a “significant shift in power output patterns driven by environmental concerns and the adoption of alternative energy sources,” it added.

Coal in Asia’s energy mix

However, Asia is still expected to be the top consumer of coal in the next eight years.

“While there is a concerted effort to increase gas-fired power generation, the existing infrastructure and the current economic benefits derived from coal mean that it (coal) will remain a significant player in Asia’s power mix,” BMI said.

In an earlier report, BMI noted that Asian emerging markets, including the Philippines, will continue to drive gas-to-power demand until 2033 as power sectors are seen to remain “carbon intensive.”