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Gatchalian sees trillion-peso savings from energy efficiency policy

MANILA, Philippines – Night starts to fall on Manila with the iconic clock tower at the City Hall illuminated like a lantern, 30 June 2017. Senate Committee on Energy chairman Senator Win Gatchalian in a statement said Philippine consumers stand to save as much as P5.5 trillion in combined electricity cost savings for the next 12 years with efficient use of energy. Photo by Mark Cayabyab/OS WIN GATCHALIAN

Senator Win Gatchalian says the Philippines will save trillions of pesos over the next twelve years if government sets in place an energy efficiency and conservation policy as a long-term strategy to address high electricity demand and costs.

Gatchalian, who is the chairman of the Senate Committee on Energy, said Philippine consumers could enjoy between P1.6 trillion to P5.5 trillion in combined electricity cost savings from 2018 to 2030 because of reduced energy demand and consumption prompted by the efficient use of energy.

“Energy efficiency and conservation strategies will not only achieve much needed savings for the government, but it can also significantly bring down the prices of electricity and give consumers extra money in their pockets to spend for other basic necessities,” Gatchalian told members of the American Chamber of Commerce of the Philippines in a recent gathering in Makati City.

“Experts have been busy finding additional and alternative sources of energy to ensure a stable power supply in the three major islands of our country. What we need to do now is to re-focus and seriously look into energy efficiency and conservation as a more effective strategy,” he added, as he pressed anew for the establishment of a comprehensive Energy Efficiency and Conservation policy framework to secure viable and affordable power nationwide.

Gatchalian said energy efficiency can lead to a total of P1.6 trillion from 2018 to 2030, or an average of P126.4 billion annually if the Philippines becomes half as energy efficient as Germany, which is among the world’s top energy efficient countries. On the other hand, savings can go as high as P5.5 trillion, or P420 billion yearly, if the Philippines fully meets the German efficiency standard.

These savings would stem from lower electricity demand under the proposed national energy efficiency and consumption policy, down to 22,589 MW or 10,836 MW at 50% and 100% Germany-like efficiency, respectively. This would result in actual electricity consumption as low as 454 kilowatt hours per capita by 2030, less than half of the projected per capita consumption mark under existing efficiency standards. Lower power demand would then result in avoided additional generation capacity, estimated at 5,771 megawatts from 2018 to 2030 in the 50% German energy efficiency scenario, and 17,524 MW at 100 percent.

Aside from electricity cost savings, Gatchalian said energy efficiency would also result in reduced dependency on foreign coal, avoiding as many as 290.2 million metric tons in imports over the 12-year period. This would result in average annual savings of $392 million to $1.3 billion between 2018 to 2030 at the 50% and 100% efficiency standard, respectively.

But Gatchalian acknowledged that government needs to shell out funding for the development and utilization of energy efficient technologies and structures.

Assuming that the average cost of energy efficiency in the Philippines is similar to the United States, Gatchalian said the total cost from 2018 to 2030 will reach P419.9 billion at a 50% efficient scenario; or P1.39 trillion if we want to be as efficient as Germany. However, the senator noted that there would be net savings in either scenario: P1.2 trillion in the more modest scenario, and a potential of P4.1 trillion in savings at the German efficiency mark.

“The cost of power in our country has been very expensive. Government needs to re-think and overhaul its energy source priorities and look into energy efficiency and conservation as the ultimate solution to providing stable and more affordable electricity to the Filipino people,” Gatchalian said.