• Mary Ann Quirapas-Franco

Sustainable Energy Transition of the Poor Rural Communities in the Philippines

Updated: Jun 18



Introduction


In the global context, a developing country like the Philippines tries to address the lack of energy access and security by implementing policies that encourage the adoption of renewable energy technologies (RETs). The national strategy is to triple the share of RE in the energy mix by investing in large-scale-capacity RE projects and utilizing market-led incentives through privatization of RE projects in on-grid areas. The Philippine government has the Total Electrification Programme (TEP) that provides electricity (from fossil fuel or RE) to unviable regions, including all off-grid areas.


The Philippines is an archipelagic country composed of more than 7,641 islands, with 106.9 million people. The Philippines was ranked as the 5th most competitive economy in Southeast Asia. When the national economy grows, energy demand also increases. The Philippines’ energy consumption is predicted to increase at an average rate of 4.3 percent annually from 33.1 MTOE (million tons of oil equivalent) in 2016 to 91 MTOE in 2040. Fossil fuels remain the dominant energy source in the country, but renewables make a significant contribution because of aggressive national RE policies. The Philippines’ installed capacity for RE is at 32.5 percent.


To address the technical and geographical difficulties of establishing on-grid energy sources in an archipelagic country and increasing energy demand from citizens, the government prioritizes rural electrification. According to the TEP, the “State is to ensure and accelerate the country’s total electrification and ensure the quality, reliability, security, and affordability of the supply of electric power.” TEP aims to have 100 percent electrification by 2022 based on the 2015 census, and one pathway is the utilization of RE sources, specifically in off-grid areas. One of the projects under this program is the Solar Home System (SHS), which provides solar photovoltaic (PV) systems to households for lighting and light-powered appliances. There are also cash-based incentives and market-based policies like the recently passed RE Portfolio Standards (RPS) that ensure the diversification of energy supply in poor rural communities.


However, even with the provision of national support for rural electrification through installed-capacity and market-led approaches, the adoption of RETs in RE source-rich rural islands has been relatively slow: 12 percent of the country’s total population which is mostly located in the poor rural and remote communities of the country are still without electricity and far from achieving sustainable energy. The solution to the energy access problem for many of these rural islands remains dependent on diesel generators provided by the National Power Corporation – Small Power Utilities Group (NPC-SPUG) instead of off-grid RE solutions. Around 2.5 million households, primarily located in small rural communities called “sitios,” are either still without electricity or with limited electricity for only 4 to 6 hours a day. While cities’ electricity access rate is around 98 percent, remote areas are lagging at only 41 percent. As a result, the rural poor’s living conditions and livelihood are directly affected and aggravated by the lack of energy access. The electricity subsidy given to them is only enough to cover their day-to-day activities. An additional consideration for any policy intervention to adopt RET is the vulnerability of target areas to natural disasters to address the energy access problems in poor rural areas. Some of these rural communities are in coastal areas that are prone to regular typhoons. The Philippines is also located within the Pacific Ring of Fire, making it vulnerable to earthquakes and volcanic hazards.


Gaps in the Current Policy Interventions


There is no doubt that the government and market-based interventions led to more RE generation in the country. However, the question remains whether the rural off-grid areas reap the long-term benefits of these RE systems. Do the communities achieve long-term energy access, energy resilience for disaster-prone areas, and, most importantly, sustainable energy that could benefit their socio-economic needs?


The Philippines’ RE policy framework treats “energy as an end rather than a means to achieve a desired outcome.” The fixation on achieving installed capacity through power extension in poor rural areas and faster RET deployment through subsidies and market-led mechanisms shows that the government prioritizes the amount of RE put in regardless of where, how, and for what purpose deployments happen. Having sustainable energy sources to address the rural poor’s energy access problem has just been recently recognized through the passage of TEP and RPS. As part of rural electrification, the RE generation has only been mandatory lately when the RPS and the TEP were implemented in 2018.


Besides, the main RE projects of the government are still focused on short-term benefits such as lighting. These policy interventions do not utilize RETs as “enablers” to improve the communities’ socio-economic conditions and alleviate them from poverty. For example, the priority of TEP’s power extension does not explicitly mention the provision of 24-hour electricity to these off-grid areas. Having access to a reliable source of electricity can help poor rural communities to engage in more commercial and productive activities that, in turn, support livelihood opportunities and increase incomes.


Another issue is energy inequity between urban and rural areas of the Philippines. According to the World Energy Council’s (WEC) Energy Trilemma Index, the Philippines ranks 102 among the 128 countries in its performance on energy equity -- “the country’s inability to provide universal access to affordable, fairly priced and abundant energy for domestic and commercial use.” The electricity access rate of the capital region is around 98 percent, while remote regions like Mindanao has only 41 per cent. The traditional installed-capacity approach of the Philippines, which relies heavily on “combinations of large-scale and centrally dispatched power plants and grids,” is not efficient in the archipelagic geography of the country and could only worsen the discrepancy of electricity generation and access between the rural and urban areas.


The privatization of the electricity sector does not guarantee that the rural poor are not marginalized. Private energy producers and distributors go for more significant on-grid projects to offset deployment costs. In some cases, private producers treat electrification as a “hardware issue,” which means that once a system is installed and works properly, they move on to the next community to achieve a certain number of deployments. The RETs are left unused once technical problems occur as the rural communities are not equipped with the technical knowledge and capacity to maintain and repair these systems.


Conclusion and Recommendations


The above issues relate to how “energy access” is defined in the different policy documents about RE adoption and rural electrification in the Philippines. From a study done by IRENA on mini-grid development in the Philippines, they suggested the following: 1) there is a need to define and distinguish how rural electrification and energy access are measured -- whether by merely installing a distribution system (electric poles and wires) to the household or having actual electricity and 2) if so, what does having access to energy means – is it having electricity 4 to 6 hours per day for their basic energy needs or having equal access to power to improve their everyday lives and to achieve sustainable development?. From a disaster preparedness and recovery perspective, there is also little consideration over how RETs could improve the vulnerable rural areas’ energy resilience. The government could tap the off-the-shelf and less costly RE systems suitable and adaptive to typhoon-stricken areas. Examples are modular solar generation cart and solar suitcases.


The participation of local community organizations, non-government organizations (NGOs), and local government units (LGUs) should also be more emphasized. Their roles have not been institutionalized in the current RE rural electrification framework. NGOs have been active in deploying small-scale RE systems in off-grid rural areas. These deployments are seen to compensate for the lack of energy access to these areas or post-disaster recovery when the diesel gen-sets are affected, while the national government’s main priority is to restore on-grid facilities. Some of these NGOs are also well-versed with the appropriate skills to implement community-based energy projects. They are used to working with community members and training them to implement community-based activities in a self-help manner.


On the other hand, LGUs have been focal points in external project delivery from the national government or international donor organizations in some community-scale RE projects. They provide access to the community infrastructure or local processes to implement projects quickly. In short, LGUs and NGOs are still operating informally outside the purview of the DOE and the NEA, although they have been filling in some of the roles that SPUG and the electric cooperative could not do.


In summary, the Philippines might have a significant share of RE in its national energy mix; however, it does not necessarily lead to long-term RET adoption, especially in poor rural areas. The rural poor could not take advantage of the more intangible benefits of RETs -- beyond lighting and more of means to have additional sources of income or livelihood. The current RE policies are more concerned with the number of RETs installed than to achieve sustainable and equitable energy. In some instances, the privatization of the electricity sector also continuously marginalizes the rural poor. They do not have the technical and economic capacity to pay for and maintain the RE systems. A more coherent promotion of RET development at a local and community level would help achieve energy sustainability, especially in the areas that need electricity the most.

The views and opinions expressed in the piece do not represent the author’s institute. The analysis is an excerpt from the author’s doctorate dissertation thesis available at: https://scholarbank.nus.edu.sg/handle/10635/188047

Dr. Mary Ann Quirapas-Franco is a Research Fellow of the Energy Studies Institute, National University of Singapore. Her work focuses on the impacts of adopting sustainable energy technologies in the Southeast Asia region.