Philippines: Mitigation of Climate Change through Increased Energy Efficiency and the Use of Clean Energy

Sovereign Project | 43207-012

Summary

This will cover activities under the broad umbrella of energy efficiency and clean energy, where large investment are needed to support government's plan.

The project's concept paper was approved last year and ADB recruit a range of individual consultants to prepare the proposed components.

The proposed components for study are:

(i) energy efficiency: distribution (as hire purchase) of energy efficienct appliances (TV, air-conditioners, fridges and fans). These component may also finance scaling up the public-lighting and efficienct buildings components of the Philippine Energy Efficient project. However, in September 2012, after extensive consultations with the civil society, the Efficient Appliances Project was dropped and a solar rooftop project, with a revised scope, was agreed and included in the updated Country Investment Plan for the Philippines.

Latest Project Documents


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Project Name Mitigation of Climate Change through Increased Energy Efficiency and the Use of Clean Energy
Project Number 43207-012
Country Philippines
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 7754-PHI: Mitigation of Climate Change through Increased Energy Efficiency and the Use of Clean Energy
Japan Special Fund US$ 700,000.00
Technical Assistance Special Fund US$ 225,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector Energy - Energy efficiency and conservation
Gender Equity and Mainstreaming Some gender elements
Description

This will cover activities under the broad umbrella of energy efficiency and clean energy, where large investment are needed to support government's plan.

The project's concept paper was approved last year and ADB recruit a range of individual consultants to prepare the proposed components.

The proposed components for study are:

(i) energy efficiency: distribution (as hire purchase) of energy efficienct appliances (TV, air-conditioners, fridges and fans). These component may also finance scaling up the public-lighting and efficienct buildings components of the Philippine Energy Efficient project. However, in September 2012, after extensive consultations with the civil society, the Efficient Appliances Project was dropped and a solar rooftop project, with a revised scope, was agreed and included in the updated Country Investment Plan for the Philippines.

(ii) market for electric vehicle: distributing (lease or hire purchase) about 20,000 electric tricycles replacing 2 stroke and 4 stroke tricycles that are common in metro-Manila (200,000 units) and across the country (3,500,000 units). Tricycles produce about 10 million tons of CO2 in the Philippines.

The ensuing loan, Market Transformation through Introduction of Energy-Efficient Electric Vehicles Project (the e-trike project) was approved on 11 December 2012. The balance of the TA fund is being used to assist the EA in: (i) promoting and marketing the e-Trikes to the local government units; (ii) launching industry meeting/s on the technical aspects of the project; (iii) strengthening capacity of DOE staff on procurement and implementation; (iv) preparing a report and outline of an Operations Manual highlighting procedural flows, timelines, documentary and other requirements, procurement, financial, and logistical plans; (v) providing technical support in the establishment and pilot operation of the charging infrastructure including the installation of solar charging stations; and (vi) providing technical and administrative support to secure UNFCCC registration.

Project Rationale and Linkage to Country/Regional Strategy

The Philippines is a net importer of energy, mostly in the form of fossil fuels; the demand for energy is also growing with increased population, rapid urbanization, improved lifestyle and overall economic growth. Use of fossil fuels is causing climate change and will severely impact this archipelago country of more than 7000 islands. Hence the Governments main policy challenges are: tackling climate change, reduce reliance on imported fossil fuels, and improve energy security ensure reliable, stable and sustainable supply of energy at affordable prices and at an acceptable social cost. Investments in indigenous renewable energy and energy efficiency (clean energy) will address all these challenges, but the market in its current form is unable to attract necessary investments in clean energy.

As most fossil fuels are imported, increased CO2 emission is a proxy for greater reliance on imported energy. Under a business as usual scenario, between 2007 and 2030: the total greenhouse gas emissions for the power sector will increase by 400% (from 26 MtCO2e to 140 MtCO2e); and for the transport sector by more than 200% (from 29 MtCO2e to 95 MtCO2e) driven by substantial increase of import of crude oil (for transport) and coal (for power generation). Despite large potentials for renewable energy, new coal power plants are being planned, as a least cost solution, and by 2030, coal power plants will contribute more than 90% of the total CO2 emissions. Emissions from the transport sector represents 30% of all pollution, and a large part is contributed by the inefficient old form of public transport tricycles (3.5 million) and Jeepneys (250,000) with poor quality engines. CO2 Emission from the motorcycles and tricycles alone accounts for more than 10 million tons per year.

An alternative scenario with net increase of emission by only about 15% to 30% by 2030 is possible with about 10% to 15% increase in energy efficiency across all sectors and increased use of renewable energy. Energy efficiency, the key component of this alternative scenario, is also an essential tool for lessening the impact of possible increase in electricity prices, caused by the universal charge that may be imposed on all customers to finance the proposed incentives for renewable energy . The Government is committed to energy efficiency, and has developed the energy efficiency roadmap during the 2008 Philippine Energy Summit through extensive consultation with all stakeholders. Although relatively speaking, because of the high electricity price, clean energy projects are financially more attractive in the Philippines, unfortunately, without broad market transformation new technology, policy, institutions, investors, incentives, consumer awareness and wider consumer acceptance the alternative scenario cannot be achieved.

This will study a range of options for energy efficiency and energy efficienct electric vehicles.

Impact The loan project will reduce power sector's CO2 emissions through (i) efficient use of energy, and (ii) identification of the best technology for solar power (either stand alone or hybrid) and by development of a working model for net metering and feed in tariff allowed by the new Renewable Energy Law.
Project Outcome
Description of Outcome The investment project will contribute the Government's ongoing initiatives to: (a) improve energy security, (b) increase access to power (c) reduce consumers energy cost through energy efficiency, (d) lower peak demand, and (e) increase society's awareness of energy efficiency and solar generation.
Progress Toward Outcome
Implementation Progress
Description of Project Outputs The expected outputs are sector studies, design of pilot projects with complete technical, financial and economic analysis and implementation arrangements for scale up.
Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Nationwide
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design ADB has organized various workshops and consultation meetings involving local industry pleayers and interested overseas investors.
During Project Implementation Project team have undertaken various stakeholders consultations and organized industry meetings and workshops.
Business Opportunities
Consulting Services Several consultants have been engaged to support the preparation of the e-Trike Project and to assist the executing agency, Department of Energy, during the early start-up of project activities while waiting for the project implementation consultants to be engaged. These consultants were also assisted the EA in (i) promoting and marketing the e-Trikes to the local government units; (ii) launching industry meeting/s on the technical aspects of the project; and (iii) strengthening capacity of DOE staff on procurement and implementation.
Responsible ADB Officer Sohail Hasnie
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Energy Division, SERD
Executing Agencies
Department of EnergyPNPC Complex
Merritt Road, Fort Bonifacio
Makati, Metro Manila
Timetable
Concept Clearance -
Fact Finding -
MRM -
Approval 16 Dec 2010
Last Review Mission -
PDS Creation Date 21 Dec 2009
Last PDS Update 26 Sep 2014

TA 7754-PHI

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
16 Dec 2010 24 Feb 2011 24 Feb 2011 31 Aug 2011 31 Aug 2014 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
925,000.00 0.00 175,000.00 0.00 0.00 0.00 1,100,000.00 16 Dec 2010 842,260.12

Safeguard Documents

See also: Safeguards

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Evaluation Documents

See also: Independent Evaluation

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The Public Communications Policy (PCP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

E-Trikes - Driving Change

Interested bidders/groups may view the mock up model at ADB HQ. For more information, contact Mariane Sual, 6324444 loc 70781.

There are approximately 3.5 million conventional combustion engine tricycles and motorcycles operating in the Philippines, contributing millions of tons of carbon dioxide emissions to the environment every year. These vehicles have a dramatic impact on air quality, affecting many aspects of life in the Philippines, from national health to increased exposure to climate change risks.

ADB, in partnership with the Philippine government and the Department of Energy, hopes to transform the public transportation sector by widely adopting electric vehicles, specifically tricycles (e-trikes) throughout the Philippines. Using innovative technology and competitive financing, this project will achieve widespread adoption of electric tricycles and the development of a sustainable local e-trike manufacturing industry.

Note: As of January 2012, the only electric tricycles operating under the e-trike pilot project sponsored by ADB and the Philippine Department of Energy (DOE) are the 20 units running in Mandaluyong City. Other than those 20 units, no other electric tricycles have been deployed under the ADB-DOE Project anywhere in the Philippines.

Note: As of January 2012, the only electric tricycles operating under the e-trike pilot project sponsored by ADB and the Philippine Department of Energy (DOE) are the 20 units running in Mandaluyong City. Other than those 20 units, no other electric tricycles have been deployed under the ADB-DOE Project anywhere in the Philippines.

Background

Energy use in non-OECD Asia is expected to increase 118% by 2035, and harmful greenhouse gas emissions from the transport sector are projected to increase more than 200% worldwide by 2030. Emissions from the transport sector represent 30% of all air pollution, and a significant contributor is inefficient, out-dated public transportation.

As the Philippine economy continues to grow, and energy demand increases accordingly, two scenarios are likely:

  1. a growing economy will lead to higher quality of life, more cars on the road, and a higher volume of greenhouse gas emissions; and
  2. a rising world demand for oil will result in higher gas prices for consumers.

Given these scenarios, electric vehicles pose a valuable solution for the nation's energy security and for millions of consumers who depend on imported energy.

As a net importer of energy, the growing transportation needs of the Philippines will become more and more costly over time. This makes using electricity for transportation a more sustainable long-term solution. By adopting electric tricycles, the Philippines can become a leader in green public transportation and pave the way for a growing electric vehicles market around the world.

Project description

ADB is working with the Government of the Philippines to promote the adoption of e-trikes first in Metro Manila and, soon, throughout the country. Ultimately, ADB and the government hope to see 100,000 electric tricycles on the road by 2016.

Electric vehicles are highly efficient, using up to 75% of their energy to power the vehicle versus only 20% used in most internal combustion engines. The e-trike produces no noise and zero tailpipe emissions and can be charged at night during off-peak electricity hours.

ADB will work with local government units (LGUs) and the private sector to establish financing mechanisms whereby tricycle drivers will have the opportunity to lease or lease-to-own the e-trikes by paying less than 200 pesos a day. This will allow the driver a higher take-home income. For example, a conventional tricycle needs between 5 and 7 liters of gasoline to travel approximately 100 kilometers (km), costing 250 to 350 pesos. To travel the same 100 km, an e-trike will use between 3 kilowatt hours (kWh) and 5 kWh of electricity, costing only 30 to 50 pesos. The 200 peso difference in fuel savings will help the driver pay for the cost of the e-trike.

Technology

This project will take advantage of cutting-edge technology that is readily available, but that faces institutional market challenges. The success of electric vehicles has been heavily dependent on the evolution of battery technology. In recent years, heavy lead acid batteries have given way to lithium ion battery technology, which allows for 2000 to 3000 cycle charges as well as a lighter load with stronger acceleration capability.

Lithium ion batteries are expected to become the most popular technology in plug-in-hybrid and all-electric-hybrid vehicles and are projected to dominate the electric vehicle battery market by 2017. Today's lithium ion batteries are produced almost exclusively in Asia, representing a significant opportunity for the Philippines.

LGUs will also have considerable influence over the design of e-trikes in their areas. E-trike bodies can range in size and design, and tests are being conducted on submersible motors for areas that are more prone to flooding.

Some municipalities may also choose to erect solar charging stations for the e-trikes, compounding their benefits. By charging the units with solar power, the e-trike becomes a zero emissions mode of transportation, thereby promoting renewable energy, mitigating the harmful effects of climate change, and driving change in the country and throughout the region.

See list of   Lithium Ion Battery Suppliers.*

Related links

See Also


* Disclaimer: The Asian Development Bank (ADB) is providing this list of battery suppliers not as an endorsement but to facilitate industry development. These suppliers have formally expressed interest to work on the project in response to ADB's earlier request for information.

06 June 2012
Consultation Meeting on Renewable Energy Sector Developments and Possible Initiatives

The Center for Clean and Renewable Energy Development (C-CRED) convened a meeting with its partners to discuss developments in the renewable energy (RE) sector and to identify constructive efforts by which it can, together with government and the Asian Development Bank, collaborate to develop and harness RE to benefit the marginalized sectors of society.

Read the   highlights of this event.

Day 1 of the ADB-DOE Clean Technology Fund Investment Plan Consultations held at ADB Headquarters in Manila.

21 - 23 May 2012
ADB-DOE Clean Technology Fund Investment Plan Consultations

The Department of Energy (DOE) and the ADB hosted a series of consultations with civil society organizations and other stakeholders to review the Philippines CTF Investment Plan update and the proposed electric tricycles (e-trike) project.

The consultations covered the following topics:

  • Why not Renewable Energy for the CTF?
  • Electrification of Public Transport: Why E-Trikes?
  • Alternative Fuel Vehicles and Finance
  • Project Level Discussions

Day 2 of the Consultation Meeting on the DOE‐ADB Initiative for E‐trikes in the Philippines on the Electrification of Public Transport: Why E-trikes?

Objectives were, among others, to understand the current state of renewable energy in the Philippines and justify why electric tricycles were selected by the DOE to receive CTF funding.

May 21
Switch from RE to Sustainable Transport

This was the first in a series of civil society consultations evaluating the reallocation of CTF funds from the renewable energy sector to the sustainable transport sector, namely the e-Trike project.

May 22
Why E-trikes?

Day 3 of the Consultation Meeting on the DOE‐ADB Initiative for E-trikes in the Philippines on Alternative Fuel Vehicle & Finance and Project Design.

This topic was addressed on the second day of consultations. The objective was to clarify and discuss the need for electrification of tricycles as part of the DOE-ADB initiative using resources from the Clean Technology Fund.

May 23
Project Design and AFV Financing

On the final day of the 3-day consultations, the objectives were twofold: to understand and contribute to specific aspects of the e-trike project design, and to understand the proposed e-trike financing scheme.