ADB to Fund Philippines' Energy-Efficient Light Project; $100M Fuel Cost Savings Expected Annually
February 12, 2009 // Published as a news service by IHS
According to ADB, the project includes savings of about $100 million every year in fuel costs and a deferral of an investment of $450 million in power generation and associated network capacity.
To establish the project, the ADB will loan $31.1 million to the Philippine government. The Philippine Energy Efficiency Project will distribute compact fluorescent lamps (CFLs) to customers nationwide in exchange for their incandescent bulbs.
Each CFL is expected to save customers 400 pesos, around $8.50, each year for the next seven to 10 years, ADB experts said.
The project will also retrofit government office buildings and public lighting systems with other efficient lighting options and establish an energy service company (ESCO) that will provide financial and technical support to companies planning to reduce energy consumption.
The ESCO will act as a one-stop-shop for energy efficiency for the public (hospitals, schools and government buildings) and private enterprises (industries, hotels and malls).
Only 20% of the electricity used by an incandescent bulb produces light, with the remaining 80% wasted as heat. In contrast, a CFL uses all of its electricity input to produce light. While an average incandescent bulb's life is only about 800 hours, the CFLs used in the project will have a life of 10,000 hours with a two-year warranty, according to ADB.
"[A] CFL distribution program is like building virtual power stations," said Sohail Hasnie, senior energy specialist in the ADB Southeast Asia department.
"Put simply, if 1 million incandescent bulbs are replaced with CFLs at a cost of about $1.5 million, the electricity demand will be reduced by about 50 MW [megawatts]. The impact on the power system will be the same as building a new 50 MW power station, which costs at least $50 million, another $2 million to $3 million each year to operate ande three to four years for construction."
As a result of lower greenhouse gas (GHG) emissions, the project will create carbon credits for the Philippines under the Clean Development Mechanism.
Source: Asian Development Bank (ADB).