Philippines urged to raise power investments to $62 billion
By Louella Desiderio – October 23, 2023 | 12:00am
from The Philippine Star
In its background paper on the energy sector for its Country Climate and Development Report, the World Bank said accelerated decarbonization in the Philippines would require a substantial increase in capital spending to scale up renewable energy.
MANILA, Philippines — The Philippines will need to double investments in power systems to $62 billion by 2040 to accelerate the reduction of carbon dioxide emissions in the energy sector, according to the World Bank.
In its background paper on the energy sector for its Country Climate and Development Report, the World Bank said accelerated decarbonization in the Philippines would require a substantial increase in capital spending to scale up renewable energy.
“Rapidly decarbonizing the power sector entails doubling the cumulative capital investments in power systems by 2040 from $31 (billion) to $62 billion in present value terms, compared with the current ambition of the government,” the World Bank said.
The multilateral lender said decarbonizing the power sector is the key for the country to successfully shift to clean energy.
Power generation is the largest source of greenhouse gas emissions in the country.
A clean energy transition is expected to provide many benefits for the Philippines.
The World Bank said a shift to low- and zero-carbon alternatives would enhance energy security as it would increase the use of indigenous and renewable energy resources like hydropower, solar and wind, while reducing reliance on imported fossil fuels.
“A cleaner energy future is expected to be more affordable given the global trends of declining cost of deploying and integrating solar and wind power, enhancing the competitiveness of the economy,” the World Bank said.
In addition, it said reducing fossil fuel consumption, particularly by electrifying urban transport and reducing the use of coal in power generation, would also benefit public health through reduced ambient air pollution in urban areas.
Moreover, a clean energy transition will help the country meet its commitments under the Paris Agreement.
“It is critical to build a solid foundation for accelerated decarbonization in the power sector in the next five years,” the World Bank said.
While the government has put in place policies to support the accelerated deployment of renewable energy, the World Bank said there are still gaps in policy implementation.
The World Bank said the country’s priorities in the next five years should be on rapidly scaling up investments in solar and onshore wind power and developing corresponding grid integration capacity, as well as intensifying energy efficiency efforts in buildings and industries.
“Improvement and amendment of existing policies are also needed to remove constraints to competition, financing and ease of doing business,” the World Bank said.
