By Johnson Luu
Indonesia, with a population of over 279 million people, is the world’s fourth most populous country today. Despite the country’s significant reserves of coal, oil, and gas, and being a major energy exporter, Indonesia has one of the lowest electrification rates in Southeast Asia today. 10% of its population, which translates to 27,900,000 people in the country, is without access to safe and reliable electricity.
This issue presents a ripple effect of other challenges, such as access to clean cooking fuels. According to the International Energy Agency, around 40% of Indonesia’s population still relies on traditional biomass for cooking, which negatively impacts the health of their people and the environment.
While the world works hard towards a net-zero emission goal, with rapid urbanisation and digitalisation plans being implemented, we must not lose sight of the needs of those living in the underserved areas of the world. In 2022, it was reported that the Philippines was experiencing a data centre construction boom.
At the same time, the Philippines, with a population of over 100,000,000 people, also suffers from significant energy poverty. 15% of the population, or around 16,000,000 Filipinos, still do not have access to safe and reliable electricity, with many of them living in rural areas. According to the World Health Organisation, about 70% of households in the country still rely on traditional biomass for cooking, likewise in Indonesia.
Before we think big about how the lack of electricity access can have significant implications for economic development, with businesses and households unable to access modern technologies and equipment, let’s take a step back and first focus on meeting the critical and fundamental needs of the underserved – rural electrification initiatives to combat energy poverty.
Addressing Energy Poverty in Indonesia, The Philippines
Government intervention is the first step towards electrification, but this is merely on the policy level. Policymakers first need to put in place a long-term plan that aims to rectify the issue of energy poverty through rural electrification plans. The next step to realising and implementing these plans is through government collaborations with private sector companies in the smart energy industry.
In the last few years, the governments of Indonesia and the Philippines have been collaborating with smart energy companies and investing in renewable energy projects to provide a sustainable and affordable source of energy to their people, with a particular focus on increasing access to electricity and clean cooking fuels.
The Indonesian government has launched a range of programs including the National Electrification Program (PLN). While the PLN aims to increase electricity access to 100% of the population by 2020, according to the Ministry of Energy and Mineral Resources, Indonesia achieved a 99.4% electrification ratio in 2021. 466 thousand households in 316 villages remain without access to clean and affordable electricity.
In the Philippines, one of the key programs implemented by the country’s National Electrification Administration (NEA) is the Rural Electrification Program (REP), which aims to provide electricity to remote and underserved areas in the country.
Since its inception, the REP has electrified barangays (villages) and households across the Philippines, bringing electricity to millions who previously had no access to it. According to data from the NEA, as of December 2020, the electrification rate in the country stood at 96.39%, up from just 53% in 1991.
Like Indonesia, challenges remain in achieving universal access to electricity in the Philippines, with some remote and underserved areas in the country still lacking access to electricity, and the quality of electricity supply in some areas remaining poor. The reliance on fossil fuels for electricity generation in the Philippines also remains high, with coal accounting for over half of the country’s energy mix.
The cases in point of PLN and NEA are not an indication of a failure in the government’s policy goals, but a real-world issue of last-mile electrification, which is often a difficult undertaking irrespective of its geographical context.
Factors such as a limited supply of parts and equipment, and terrain issues impacting the transportation of equipment for the implementation of renewable projects can impact project timelines and the rate of success. As such, an inevitable outcome highlights the importance of quality government and private partnerships.
Governments should collaborate with private companies that have a proven record of resilient supply chains, successful rural electrification implementations around the world, and past government partnerships. Importantly, the company must also have a local presence in the country so that they can meet the maintenance and warranty obligations as well as continuously explore ways to improve the implemented projects in the long run.
These differentiating capabilities should also not come at the expense of high government expenditures.
Renewables for Energy Poverty
By now, the world is no stranger to the benefits of deploying renewables for rural electrification. In fact, governments around the world, including Indonesia and the Philippines, have been actively constructing solar farms in their countries, expanding the electricity grid, and providing subsidies for off-grid renewable energy projects such as solar home systems.
Traditional methods of electrification in rural areas often rely on diesel generators or grid extensions, both of which can be expensive and environmentally damaging. While grid extensions can be costly and require significant infrastructure investment, they contribute to the health of people and the environment.
In the long run, the cost of energy is also economical in comparison to the traditional means of energy generation. With the advent of renewable energy technologies such as solar, wind, and hydropower, it is now possible to build sustainable and efficient systems for rural electrification.
These technologies can be harnessed to produce clean and reliable energy in remote areas and be combined with energy storage systems such as batteries to provide a reliable and secure electricity supply.
Sustainable electrification solutions go beyond just solar panels or farms. We must also remember other intricacies of power generation when it comes to rural electrification.
For example, the Philippines Electric Cooperative has enlisted companies that can supply high-quality smart energy components such as transformers and HV electrical equipment for two substation projects, the Sta. Barbara Substation and Mabiga Substation, under the Pampanga II Electric Cooperative (PELCO II), electrifying the countryside, remote areas, and off-grid islands.
These projects, designed with sustainability in mind, leverage the latest cutting-edge hardware to enable efficient and reliable power transmission and distribution, reducing losses and improving the quality of the electricity supply, thus minimizing the impact on the environment.
A Positive Outlook
There are many facets to rural electrification that government and private company collaborations should keep an eye on in addition to moving away from entrenched energy systems and building cleaner, more efficient, and more sustainable systems.
A nationwide off-grid electrification program will require full support from various stakeholders, including central and local governments, and private sectors from across industries.
As we face the climate and energy poverty crises, if we change our perspective and view the current situation through a positive lens, rural electrification presents a unique opportunity for the best minds to come together to build cleaner and more efficient systems from scratch.
Johnson Luu is the marketing director for CHINT Global
