A Look at the Philippines’ Clean Energy Ecosystem
Courtesy of RMI.
By New Energy Nexus Philippines
The Philippines is one of the most vulnerable countries in the world to climate change. Sea level rise is three to four times faster in this island nation than the global average, and it gets hit with an average of 20 typhoons a year. Energy equity is also a major concern as 10 percent of the Philippine population still lives in rural areas without access to electricity, and those that have electricity deal with frequent outages.
Fortunately, a small but mighty group of startups is helping the Philippines forge a clean energy future. According to research by New Energy Nexus (NEN), a founding partner of Third Derivative, and RMI, 15 young companies are helping transform the climate crisis — and close the region’s energy access gap — with renewable energy and clean-tech solutions.
The good news is that these startups are not acting alone. Public and private leaders across the Philippines are working to create a cleaner, more accessible and reliable energy system. Already policymakers have announced a moratorium on new coal projects and are aiming for 35 percent clean energy by 2030.
But it’s going to take far more innovation and investment to meet that target. Coal-fired power capacity has increased since 2008, and now contributes to 57 percent of the country’s energy mix. And the nation’s renewables currently account for less than a quarter of supply, with variable renewables like wind and solar significantly less prevalent (2 percent) than hydropower and geothermal.
All this signifies major ecosystem opportunities — along with major barriers — for energy innovation.
Ilocos, Philippines. Photo by Brett Andrei Martin, via Unsplash
5 Regional Needs & Opportunities
Following, we explore five takeaways from NEN’s Philippines Energy Ecosystem Map report, including key traits of today’s startup scene; funding, policy and institutional drivers; and the general landscape of support.
- Startups and other early indicators reveal a clean tech ecosystem with room to grow
The Philippines is home to an array of clean energy game-changers, including startups, research labs, universities, media, and professional service providers.
Our research identified 15 promising new energy startups, including:
- Exora, a platform that connects retail electricity suppliers with contestable customers to make energy affordable and accessible for all Filipinos
- Smartermeter, an energy management system for households and rental business units to create a community of more informed consumers
- Circular Solutions, a waste management system to help residential communities with clean cooking fuel from biodegradable waste
- Light of Hope, an impact startup that provides solar generator systems for low-income families
These and other efforts are backed by a supportive ecosystem including 200 energy professional service providers and 16 media outlets that promote energy-related news. And they’re surrounded by other innovators, with 240 active patents related to energy, clean energy, renewable energy, and batteries, along with 141 new energy research projects spanning 11 research laboratories and eight universities.
Bottom line: The Philippine clean energy ecosystem is still building to a critical mass. We see room for even more startup players, considering the larger setting of innovation.
- Funding is on the rise, though not yet up to market need
Overall, we’re seeing outsized market demand for cost-effective clean energy solutions. Off-grid solutions like standalone solar and minigrids will be key to closing the energy gap for the 24,556 un-electrified communities in the Philippines.
But this can only happen with additional funding.
Currently, the country’s funding landscape encompasses 27 bank loans for energy startups and projects, six grant providers, 11 venture capital firms, five crowdfunding platforms, two insurance programs, six angel and investor networks, five green bonds, and 6,943 micro-cooperatives.
While these are promising numbers, current funding levels won’t cut it. Our analysis shows that with an investment of $354 million, 1.25 million households could tap into minigrid-generated electricity by 2030. And an investment of $897 million would give an additional 2.5 million households standalone solar by then.
Bottom line: There is opportunity to grow in terms of market interest and need, but it’s going to take more substantial investment.
- Philippine policy is trending in favor of clean energy
Supportive policy and programs are always important for energy startups. Fortunately, Filipino policymakers have been incorporating clean energy provisions into the nation’s plans for more than a decade.
A few notable examples include:
- The Electric Power Industry Reform Act (EPIRA), which privatized the power sector to support competitive pricing, more reliable electricity, and better-quality power
- The Renewable Energy Act of 2008, which includes a renewable portfolio standard, feed-in-tariff system, green energy option program, and duty-free importation of renewable energy materials
- The Energy Efficiency and Conservation Act (EECA) of 2019, which calls for an interagency energy efficiency and conservation committee as well as energy efficiency certifications, standards, and labeling
- The Energy Virtual One-Stop Shop, which aims to reduce red tape by streamlining permitting process of power generation, transmission, and distribution
Bottom line: Policymakers have shown clear support for opening pathways to clean, affordable energy, an encouraging sign for energy startups.
- Institutional inefficiencies pose a challenge
According to the International Trade Administration, the Philippines needs about 43 GW of additional capacity by 2040, and is “clearly behind schedule in developing solutions.”
Utilities and electricity companies are central to the effort, including 198 electric generation companies, 22 private distribution utilities, 6 LGU-owned utilities, 120 electric cooperatives, 67 retail electricity suppliers, 2,089 contestable consumers or end-users, and 396 transport cooperatives.
But major inefficiencies are slowing progress in the energy supply sub-sector. Utility and electricity company leaders grapple with a complex and slow approvals process, non-optimal market mechanisms, and institutional capacity issues.
Bottom line: Don’t expect smooth sailing in terms of institutional buy-in and adoption of even the most proven and cost-effective clean energy solutions.
- Clean energy networking opportunities abound
A spirit of innovation is evident not just in the startups and research organizations themselves, but also in groups and events seeking to elevate communication and collaboration in the Philippine clean energy world.
By our count, there are 18 inspirational events, 15 capacity building initiatives, two startup validation programs, 22 fab labs, 15 networking events, 49 incubators and accelerators, two pitch and demo events, and 25 evangelists.
For example, RebootPH and Our Energy 2030 are youth-led coalitions advocating for awareness and capacity building on renewable energy.
Bottom line: Third-party organizations are helping startups and other clean energy innovators get the word out about breakthrough work.
Plotting Future Energy Innovation in the Philippines
Looking ahead, new market entrants and startups in the Philippines face the typical hurdles you’d expect anywhere: It takes a lot of time, and a lot of capital, to bring a promising idea from seed to market.
In the Philippines in particular, startups face major institutional barriers and regulatory challenges. Still, opportunities exist and are growing thanks to market need, increasing research and development efforts, and a supportive policy environment.
New Energy Nexus calls on accelerator programs, policymakers, and funding entities alike to step up efforts to support energy startups in the Philippines, and together help achieve a 100 percent clean energy economy for 100 percent of the population.
Are you a climate technology startup? Learn how Third Derivative, a global accelerator, can help you drive success and speed to market for your climate innovation, and apply to join our next climate tech accelerator cohort.
Featured photo by Hitoshi Namura on Unsplash
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Environment
Solid-state batteries may yet catch up — but silicon anodes are winning the race to power EVs
A Wallbox EV charger for electric car is displayed during the “Mondial de l’Auto” at Parc des Expositions on October 15, 2024 in Paris, France.
Chesnot | Getty Images News | Getty Images
Silicon anodes appear to be leading the way in the race to commercialize next-generation battery technologies for electric vehicles.
The buzz around silicon-based anodes, which promise improved power and faster charging capabilities for EVs, has been growing in recent months — just as the hype around solid-state batteries seems to have fizzled.
It comes as increasing EV sales continue to drive up global battery demand, prompting auto giants to team up with major cell manufacturers on the road to full electrification.
While some OEMs (original equipment manufacturers) have inked deals with solid-state battery developers, carmakers such as Mercedes, Porsche and GM have all bet big on silicon anodes to deliver transformative change in the science behind EVs.
A recent report from consultancy IDTechEx described the promise of advanced silicon anode materials as “immense” for improving critical areas of battery performance, noting that this potential hadn’t gone unnoticed by carmakers and key players in the battery industry.
It warned, however, that challenges such as cycle life, shelf life and — perhaps most importantly — cost, need to be addressed for widespread adoption.
Venkat Srinivasan, director of the Collaborative Center for Energy Storage Science at the U.S. government’s Argonne National Laboratory in Chicago, said silicon anodes appear to have the edge over solid-state batteries.
“If there’s a horse race, silicon does seem to be ahead at least at this moment, but we haven’t commercialized either one of them,” Srinivasan told CNBC via videoconference.
Srinivasan said five years ago silicon-anode batteries had a calendar life of roughly one year, but recent data appears to show a dramatic improvement in the durability of these materials, with some tests now projecting a three to four-year calendar life.
Unlike the cycle life of a battery, which counts the number of times it can be charged and discharged, the calendar life measures degradation over time. Typically, the calendar life of a battery refers to the period in which it can function at over 80% of its initial capacity, regardless of its usage.
Srinivasan said solid-state batteries, long billed as the “holy grail” of sustainable driving, still have a long way to go before they can match the recent progress made by silicon anodes.
“That transition still has to be made in solid-state with their metal batteries and that’s why I think you’re hearing from people that, hey, it looks like that promise hasn’t panned out,” Srinivasan said.
“That doesn’t mean we won’t get there. It may happen in a few years. It just means that it feels like today silicon is in a different part of the technology readiness level.”
Silicon anodes vs. solid-state batteries
Analysts say silicon anodes theoretically offer 10 times the energy density as graphite, which are commonly used in battery anodes today. Yet, these same materials typically suffer from rapid degradation when lots of silicon is used.
“Silicon anodes and solid-state batteries are two emerging technology trends in the EV battery market aimed at pushing the boundaries of high-performance battery cells,” Rory McNulty, senior research analyst at Benchmark Mineral Intelligence, told CNBC via email.
A researcher checks the electromagnet de-ironing machine at the Daejoo Electronic Materials Co. R&D center in Siheung, South Korea, on Thursday, June 22, 2023.
Bloomberg | Bloomberg | Getty Images
It has typically been the case that better battery performance comes at the cost of longevity or safety, McNulty said. Silicon anodes, for example, are known to swell significantly during charging, which reduces the battery’s longevity.
By comparison, McNulty said solid-state batteries were claimed to greatly improve the stability of the electrolyte to high performance electrode materials, combating the challenges of using high energy density materials such as silicon and lithium.
As the name suggests, solid-state batteries contain a solid electrolyte, made from materials such as ceramics. That makes them different from conventional lithium-ion batteries, which contain liquid electrolyte.
Especially in the West, advances in the area of silicon anodes [are] seen as strategic opportunity to catch up with China.
Georgi Georgiev
Battery raw materials analyst at Fastmarkets
Japan’s Toyota and Nissan have both said they are aiming to bring solid-state batteries into mass production over the coming years, while China’s SAIC Motor Corp reportedly said in early September that its MG brand would equip cars with solid-state batteries within the next 12 months.
Nonetheless, analysts remain skeptical about when solid-state batteries will actually make it to market.
A strategic opportunity?
“Silicon based anodes promise to be the next-generation technology in the anode field, providing a solution for faster charging,” Georgi Georgiev, battery raw materials analyst at consultancy Fastmarkets, told CNBC via email.
Georgiev said several industry players have been looking into the potential of silicon anodes, from well-established anode suppliers in China and South Korea to new players like Taiwan’s ProLogium and U.S. manufacturers Group14 and Sila Nanotechnologies.
“Especially in the West, advances in the area of silicon anodes [are] seen as strategic opportunity to catch up with China, which dominates the graphite-based anode supply chains with Chinese anode producers holding 98% of the global anode market for batteries,” Georgiev said.
“However, there are significant technical challenges going to 100% silicon anode such as silicon expansion affecting the longevity of the batteries and currently there are several routes to produce silicon anodes,” he added.
A FEV x ProLogium Technology Co. 100% silicon composite anode next-generation battery at the Paris Motor Show in Paris, France, on Tuesday, Oct. 15, 2024.
Bloomberg | Bloomberg | Getty Images
Taiwanese battery maker ProLogium debuted the world’s first fully silicon anode battery at the Paris Motor Show last month, saying it’s new fast-charging battery system not only surpassed traditional lithium-ion batteries in performance and charging efficiency but also “critical industry challenges.”
ProLogium, citing test data, said it’s 100% silicon anode battery could charge from 5% to 60% in just 5 minutes, and reach 80% in 8.5 minutes. It described the advancement as an “unmatched achievement in the competitive EV market,” which will help to reduce charging times and extend the range of EVs.
Fastmarkets’ Georgiev said a big question mark over the commercialization of silicon anodes is the cost of production and whether any of the major silicon-anode producers “could produce material at scale with a consistent quality and at a competitive price — [a] major requirements of OEMs.”
“At this stage silicon anodes are used more as an additive to graphite-based anodes and in the years to come we expect to see increase of silicon share in anode, but in combination with graphite, while 100% silicon anodes will take longer time to enter the mass market,” he added.
Saudi Aramco’s Ras Tanura oil refinery and oil terminal
Ahmed Jadallah | Reuters
Saudi state oil giant Aramco reported a 15.4% drop in net profit in the third-quarter on the back of “lower crude oil prices and weakening refining margins,” but maintained a 31.05 billion dividend.
The company reported net income of $27.56 billion in the July-September period, topping a company-provided estimate of $26.9 billion. The print is also a 5% drop from the previous quarter, which came in at $29.1 billion, as lower global oil prices, weaker demand and prolonged OPEC+ production cuts led by Saudi Arabia continue to impact crude prices.
The average selling price of oil for the second quarter of 2024 stood at $85 per barrel, but dropped to $78.7 per barrel during the third quarter, according to Saudi-based bank Al Rajhi capital, as non-OPEC supply volumes grew.
The oil firm said its year-on-year decline was partly offset by a “reduction in selling, administrative and general expenses primarily driven by a gain from derivative instruments, and a decrease in production royalties largely reflecting lower crude oil prices and a lower average effective royalty rate compared to the same quarter last year.”
Aramco’s dividend includes a base payout of $20.3 billion and an atypical performance-linked one of $10.8 billion. The Saudi government and the kingdom’s sovereign wealth vehicle, the Public Investment Fund, are the main beneficiaries of the dividend, holding stakes of roughly 81.5% and 16% in the company.
The remaining shareholding trades freely on Saudi Arabia’s Tadāwul stock exchange, with the company having finalized its second public share offering back in June.
Aramco’s earnings before Interest and Taxes (EBIT) came in at $51.45 billion in the third quarter, down 17% year-on-year. Aramco’s capital expenditure guidance was brought up 20% to $13.23 billion.
The company was trading at 27.45 riyals following the announcement, down 0.18% on the previous day.
The earnings align with a broader trend across oil majors, whose third-quarter profits have also suffered from declines in crude prices and refining margins. Aramco said it achieved average realized crude price of $79.3 per barrel in the third quarter, compared with $89.3 per barrel in the same period of last year.
Saudi Arabia, the world’s largest crude exporter who produces roughly 9 million barrels per day of crude at present, serves as the de facto leader of the OPEC+ oil producers’ alliance, a subset of whom agreed over the weekend to delay a planned December output hike by one month.
“Aramco delivered robust net income and generated strong free cash flow during the third quarter, despite a lower oil price environment,” CEO Amin Nasser said in a statement. “We also progressed our upstream developments, strengthened our downstream value chain, and advanced our new energies program as we continue to invest through cycles.”
The revenues will be a boon to the Saudi economy, which is currently undergoing a diversification process under Crown Prince Mohammed bin Salman’s legacy Vision 2030 scheme spanning a slew of high-cost infrastructure “gigaprojects.”
Earlier this year, Saudi Arabia’s Ministry of Finance cut the kingdom’s growth forecast to 0.8% in 2024, in a steep decline from a previous projection of 4.4%, and raised the outlook for the national budgetary shortfall to roughly 2.9% of GDP, from a prior indication of 1.9%.
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