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The Malampaya gas field is the Philippines’ only indigenous natural gas source, accounting for 20% of Luzon’s power. However, it is at a point of depletion, which puts the country at risk of an energy crisis. This has pushed a race to create more renewable energy (RE) to meet the country’s power needs and transition the country to a sustainable energy landscape.
As of last year, about 60% of the country’s energy came from coal, which meant that the Philippine power generation still relies heavily on fuel. New coal-fired power plants are no longer being approved, but operation of some of the recently constructed plants guarantees coal will continue to play an important role in the near future. Even so, the government has set impressive targets for the share of renewables, such as wind, solar, geothermal, and hydropower, in the energy mix.
The Clean Energy Scenario
Angelo Kairos T. Dela Cruz, executive director of the Institute for Climate and Sustainable Cities, said the Philippines is going after a “more sustainable and resilient energy landscape” under the Department of Energy’s (DoE) Clean Energy Scenario (CES). With a renewables share of 35% in 2030 and 50% by 2040, the CES hopes to double its current share of 22%.
So far, the Philippines has made strides in advancing its renewable energy portfolio by judging recent reforms. The country has “leapfrogged its neighbors,” said Jose M. Layug Jr., president of Developers of Renewable Energy for Advancement, Incorporated. Investments in key programs such as the Green Energy Auction (GEA), Green Energy Option Program, and renewable energy portfolio standards have made a conducive environment for renewable projects.
Achievements and Upcoming Projects
The GEA program to date has awarded 5.4 gigawatts of renewable electricity capacity, and the DoE is aiming for over 4,000 megawatts of renewable and conventional power projects online in 2024. Nevertheless, the intermittency of solar and wind power must be addressed to preserve grid reliability, analysts say.
“The journey toward renewable energy targets should be calibrated yet aggressive,” Layug said. The DoE understands that baseload power and ancillary services are required to balance the intermittence of renewable sources. To maintain a stable grid, variable renewables will be complimented with flexible energy solutions such as battery storage.
Leveraging Energy Storage and Flexible Generation
Eric T. Francia, CEO of ACEN Corp., highlighted the improving economics of battery storage, calling for policies to accelerate its adoption. ACEN, a leader in renewable energy under the Ayala Group, has already surpassed its target of five gigawatts of renewables ahead of its 2025 goal. The company continues to develop projects like the 4.8-gigawatt Terra Solar project, which includes a 4,000-megawatt-hour energy storage system, set to become one of the world’s largest solar farms.
“Projects of this scale not only attract foreign investment but also signal the transformative potential of renewable energy for the Philippines,” said SPNEC Chairman Manuel V. Pangilinan.
Challenges in Financing and Permits
Despite significant achievements, renewable energy faces hurdles, particularly in financing and permitting. The DoE estimates that up to P31 trillion is required to meet the country’s energy targets by 2040.
Securing affordable financing remains a challenge, especially for smaller players, as large-scale renewable projects require substantial upfront investments. “Limited access to capital and uncertainty about financial returns deter many potential investors,” Dela Cruz said. Additionally, the complex permitting process further slows project timelines. While the DoE’s Energy Virtual One-Stop Shop (EVOSS) has improved efficiency, there is still room for streamlining processes to foster collaboration between national and local governments.
Climate Resilience and Renewable Integration
The Philippines, among the most climate-vulnerable nations, stands to benefit significantly from renewable energy adoption. Companies like Alsons Power Group are diversifying their portfolios to integrate more renewables. Alsons’ P5.5-billion Sarangani hydropower project, slated to begin operations this year, is just one of nine hydropower projects planned over the next five years.
Alsons CEO Antonio Miguel B. Alcantara emphasized the importance of building renewable energy infrastructure while improving grid reliability and inter-island connections to facilitate integration. “This shift will require building new power plants, improving electrical grids, and establishing interconnections between islands to maximize renewable energy potential,” Alcantara said.
The Road Ahead
The Philippine government remains steadfast in its commitment to renewable energy. By expanding solar rooftops, developing waste-to-energy projects, and exploring ocean energy, the DoE aims to diversify the energy mix and reduce greenhouse gas emissions.
“The efforts underscore our dedication to achieving national renewable energy targets, reducing carbon emissions, and securing a sustainable energy future for all,” the DoE stated.
Layug reiterated the importance of consumer engagement, highlighting that local communities benefit from hosting power plants through shared profits under Energy Regulation No. 1-94. These programs ensure that renewable projects drive economic growth and community development.
A Collaborative Energy Transition
With bold initiatives, supportive policies, and private sector leadership, the Philippines is charting a path toward a cleaner and more resilient energy future, making renewable energy the cornerstone of its long-term energy strategy. This collective effort ensures that the lights stay on while addressing climate challenges and fostering sustainable growth.