Electricity sector planning for the Philippine islands: Considering centralized and decentralized supply options

Abstract For archipelagic states such as the Philippines, it is important to evaluate centralized and decentralized approaches to electricity supply to ensure that the many and far-flung islands receive affordable, reliable and sustainable electricity. This study compares the feasibility of (I) submarine cable interconnection and (II) renewable energy based hybrid system development for 132 islands. For (I), we conduct a geospatial analysis and use an algorithm to compute the optimized grid outline, taking into account bathymetric models. For (II) we apply an optimization tool that computes for each island the least-cost power generation option, taking into account diesel generator, solar photovoltaic systems, battery storage, and electricity demand. The results indicate that a grid extension of 2239 km submarine cable and 1752 km land cable would be required to connect all of the islands considered. The overall investment under the given cost assumptions amounts to more than 3 billion USD for submarine cable interconnection and more than 700 million USD for a hybridized system development. Nevertheless, submarine cable interconnection is the most economically feasible option for 35 islands and can reduce power generation costs by up to 0.21 USD/kWh. A sensitivity analysis reveals that submarine cable interconnection remains the cost-effective option for most of the identified islands, even with costs increasing by 90%. This study gives an initial assessment of centralized and decentralized electricity supply strategies, and finds renewable energy based hybrid systems most feasible for the majority of islands, and submarine cable interconnection more promising for a few larger islands.