Manila: Small islands detached from large electricity grids could be better off setting up their own renewable energy systems than relying on diesel or other fossil fuels for power generation, scientists in the Philippines say.

The Philippines is made up of more than 7,000 islands. Many island provinces and towns detached from the national grid generate their own power using diesel.

But a new research conducted by the Institute for Energy Economics and Financial Analysis (IEEFA) and the Institute for Climate and Sustainable Cities (ICSCs) suggests Filipinos adapt a new approach on power generation to keep it in sync with realities such as climate change, and save the country billions each year.

While not all the country’s small land masses are habitable, providing electrical power to many areas presents a challenge.

“Philippine taxpayers are footing a huge bill by subsidising expensive imported diesel to provide dirty and unreliable power for the small islands,” said Sara Jane Ahmad, IEEFA analyst and lead author of the report entitled: “Electricity Sector Opportunities in the Philippines, the case for wind and solar powered small island grids.”

“Today there is a need to modernise this outdated system and supply affordable, reliable, more efficient, more secure, and cleaner power,” she said.

Power for the islands is subsidised by the government costing it as much as P60 billion (Dh4.41 billion).

“Many islands do not even have 24/7 electricity service, even with expensive subsidies. Only 22 of 233 areas in question have 24/7 electricity, with over 70 per cent having less than eight hours per day of electricity. As of 2014, over four million households remain without electricity,” the study says.

Fortunately for the Philippines, Ahmad said, simple reforms can be undertaken to remedy the electrification — fuel issue concern.

Renewable energy such as solar and wind power are possible solutions for electrification of the islands, she said.

At present, small islands are plagued by power supply instability as diesel- and bunker-fuelled systems cannot provide adequate output.

As a result, many islands suffer from regular blackouts.

According to the study, the cost of generating power from solar and wind energy has declined significantly, making systems more suitable for small islands which are outside the electrical grid.

Solar-powered electricity costs had fallen 99 per cent since 1976 and 90 per cent since 2009. The cost of wind-powered generation declined by 50 per cent since 2009.

Ahmed aid the Philippines needs to adopt its outdated laws on energy.

“Unfortunately, barriers to the modernisation of small island electricity systems still exist,” said Jose Logarta, ICSC senior energy adviser. “Chief among them are outdated regulations, and the Philippines presents a prime example of how techno-economic change has outpaced government regulation.”

Other than a law on renewable energy adopted in 2009, current system in the Philippines creates no incentives for the smaller electric cooperatives to procure cheaper sources and reduce costs.

“Prudent reforms would require electric cooperatives and private distribution utilities alike to optimise procurement, helping level the playing field for renewable power generators and reducing taxpayer costs by phasing out subsidies for imported diesel fuel,” said the report.

“Small islands in the Philippines are placed perfectly to benefit from dramatically reduced costs of renewable energy. Simple reforms can pave the way for cleaner, cheaper and more reliable energy for more than 800,000 of the poorest Filipinos,” Ahmed added.

Access to electricity is a turnkey factor in development allowing industries and commerce to develop and human resource — such as an educated workforce — to thrive.