Photovoltaic Rural Electrification Possibilities in Indonesia and the Philippines

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Photovoltaic Rural Electrification Possibilities in Indonesia and the Philippines

With energy demands outpacing the growth in energy supply in rural areas of the developing world such as Indonesia and the Philippines, traditional electricity sources and structures will not be able to address many problems with current systems of rural electrification. Both Indonesia and the Philippines have large rural populations which are scattered over huge geographic distances that contribute in large part to the growing problem with conventional rural electrification. Indonesia is an archipelago whose 17,000 islands spread over 1.83 million km2, and 65% of the 194 million inhabitants live in rural areas (IEA2 165). Likewise the Philippines' archipelago includes more than 7100 islands scattered over 1,295,000 km2 of ocean, and 59% of the population live in rural areas (IEA2 203). At the growing rates of population, income, and energy demands in both countries, the current system and sources for rural electrification are likely to be extremely costly-economically, socially, and environmentally. Implementing photovoltaic electricity systems as pre-electrification in rural areas where satisfactory grid supplies are not likely to be available within the next 10-15 years and where it is technically suitable, affordable and the least-cost solution for the applications needed, can help alleviate burdens on the electricity sectors and allow for improvements in supplies while accomplishing energy objectives more effectively than the current system.

In addition to the apparent gap between energy supplies and demands, the structure of the electricity sector, rural and urban consumption and supply disparities, below cost pricing, and environmental issues underscore the problems with burdensome conventional rural electrification programs. All of these factors indicate the need for alternative electricity sources in Indonesia and the Philippines. In these areas where income is also rising, photovoltaic systems may be ideal ways to address that need.

I. The energy problem: demand and supply

Energy consumption has been growing far more rapidly in developing countries in the past decade than in developed countries. The International Energy Agency estimates that by 2010 the current level of demand for energy in developing countries will more than double and will account for almost 40% of world energy demand, due to both population growth and economic growth (IEA1 3). The East Asian region of the world is particularly important in the evolution of world energy demand because of its rapid economic growth and since there has been a clear positive correlation between economic growth and energy demand growth.

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