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ADB Gives “Green Light” a Go

April 3, 2009

greenlight

Manila, Philippines – If you can’t build it, why not save on it?  Power plants, that is. 

 

No new power plants are being constructed in the Philippines, what with the global financial downturn affecting many traditional US and European investors in the power sector.   Some are not investing in developing countries any time soon and some have even filed for bankruptcy.   But with demand for electricity increasing every year, there is a need to fill in the gap, especially in the Visayas where there is an impending power shortage. 

 

A winning alternative is reducing the load off the demand especially at peak times with the efficient use of energy.  Replacing inefficient incandescent bulbs with Compact Fluorescent Lights (CFLs) is one way.  Under a $31 million loan recently approved by the Asian Development Bank (ADB), $18 million will be set aside for the National Residential Lighting Program to procure 13 million CFLs to be given away throughout the country in exchange for incandescent bulbs.  The 450 megawatts that will be taken off the load is approximately 3 percent of the Philippines’ total generation capacity, and about two thirds of the 620 megawatts that would have been generated by the controversial Bataan Nuclear Power Plant. 

 

This energy efficiency project will defer investments of some $450 million in new power plants, save about $100 million annually in fuel cost, and avoid 300,000 tons of CO2 emission annually from reduced power generation.  With lower greenhouse gas emissions, it will also create carbon credits for the country under the Clean Development Mechanism. 

 

Distribution will start at the middle of this year, where 13 million CFLs will be given away all over the country through the major utility firms in Cebu City (Visayan Electric Company), Cagayan de Oro City (Cagayan Electric Power and Light Company) and Davao City (Davao Light and Power Company) as part of their corporate social responsibility programs.  In the rural areas, approximately 108 electric cooperatives all over the country will be tapped.  The Department Of Energy, the project’s executing agency, is still finalizing the distribution channel in Metro Manila and neighboring provinces.   

 

Each utility is responsible for distributing the CFLs to their suboffices.  On a first come first serve basis, residential customers will bring in 2 working incandescent bulbs in exchange for 2 CFLs of single wattage (i.e. 13, 14, or 15-watt capacity equivalent to 60-75 watt incandescent lamps).  The bulbs will be stored and inventoried to determine the carbon credits.  They will be crushed later on to ensure that they will no longer be sold, in line with the government’s plan to phase out incandescent bulbs by 2010.

 

An average incandescent bulb’s life is only about 800 hours, and the 2 CFLs that will replace them under the project have a life of 10,000 hours or 7 to 10 years for a single bulb at three hours a day of average use.  The 2 bulbs can save a household P800 in electricity cost per year.   

 

“What we are trying to do in the Philippines is a range of energy efficiency activities that are already well-proven in the world,” says Sohail Hasnie, ADB Senior Energy Specialist.  “One million CFLs at a cost of about $1.5 million have the same impact as a $50 million, 50 MW power station without operational cost and CO2 emissions. The Philippines can become the pioneer for energy efficiency initiatives to be copied in the region,” Mr. Hasnie added.

 

The Project will also have a component to retrofit government office buildings and public lighting systems with efficient lighting.  Older-style fluorescent lamps, incandescent bulbs, and inefficient magnetic ballasts will be replaced by energy-efficient alternatives.  About 40 selected government offices have been identified for the retrofit, and save about 7,000 megawatt-hours annually, equivalent to about $1.7 million savings and avoid 5,000 tons of greenhouse emissions per year.

 

An energy service company to be called ESCO will also be established to provide financial and technical support to companies planning to reduce energy consumption. ESCO will act as a one-stop-shop for energy efficiency for public enterprises like hospitals, schools and government buildings and the private sector like industries, hotels, and malls.

 

ADB is the lead financing agency in the Philippine power sector, getting nearly a third of its total cumulative lending to the country of over US$10 billion since 1966, ranging from generation, transmission, distribution, and sector development support.  ADB has also actively supported the government’s power sector restructuring and privatization program of power plants to encourage competition and eventually result in lower electricity costs, which is among the highest in Asia.  ADB is also encouraging increased use of indigenous renewable energy generation (such as geothermal, biomass, wind and hydropower) and will provide support to strengthen the distribution sector in the government’s rural electrification program.

 

 

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