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A milestone was reached in global energy this year as renewable sources surpassed coal as the top electricity provider for the first time. Strong growth in solar and wind not only met all new electricity demand but also contributed to a modest drop in coal and gas use, according to data from global energy think tank Ember.
In the Philippines, the Department of Energy (DOE) reported that renewable energy (RE) is projected to make up 28.8% of the country’s power generation mix by the end of 2026. Geothermal will lead the sector, contributing a third of renewable output, followed by solar at 27%, wind at 22%, and hydropower at 16%.
“These projections highlight the country’s continued efforts to diversify its energy portfolio and accelerate the transition toward cleaner and more sustainable power sources,” noted the DOE.
But RE advocates warned that the climate crisis demands action as urgent as the 1990s power shortage, when incentives drove a surge in coal plant construction. “The same urgency should guide the shift to renewables,” said Gerry Arances, executive director of the Center for Energy, Ecology and Development (CEED).
The country ranks as the world’s second most attractive market for clean energy investment, according to BloombergNEF.
(Also read: Can Tackling Climate Change Truly Drive Growth & Equality? )
Aggressive vs. pragmatic: Choosing the best path to transition
While many media outlets echoed Ember’s claim that RE had already overtaken coal, BusinessWorld columnist Bienvenido Oplas disagreed, stating, “This is not true.” Citing data from the Energy Institute’s latest Statistical Review of World Energy, Oplas wrote, “Until 2024, global coal generation was 10,613 terawatt-hours (TWh) vs wind and solar generation which produced 4,623 TWh. As a share of total generation last year, coal had 34% while wind and solar had only 15%.” He added, “There is no way that wind and solar can overtake coal.”
Still, as the Philippines charts its shift to cleaner energy, the debate continues over whether a bold or measured approach will be most effective.
- Ensuring reliability
The main criticism of RE, like solar and wind, is their intermittency, as consistent sunlight and wind are required to generate reliable power. Meanwhile, traditional baseload power plants, including large coal, nuclear, or gas facilities designed to run continuously, have long been seen as the backbone of a secure grid.
RE proponents say the traditional model is outdated, with modern solutions like battery storage, demand management, and hybrid systems able to handle solar and wind variability.
Former energy official Alberto Dalusung III noted that reliability does not require 24-hour operation. “It is about being present when it is expected,” he said, adding that pairing solar with hydropower or affordable batteries could enhance stability.
“The idea that coal is necessary for energy security is simply false,” added Jonelle Mitzi Tan of the Youth Advocates for Climate Action Philippines. “Coal does not make us secure; it makes us dependent, vulnerable, and sick.”
However, recent real-world examples show that transitioning to RE is not without risks.
In early 2025, Germany, long an RE leader, saw production fall 14% due to weak winds and low river levels, forcing the revival of idle plants and increased imports, which pushed coal and gas use to their highest levels since 2018.
Meanwhile, Spain hit a milestone with renewables supplying 55% of electricity, led by solar, wind, and hydropower. Yet rapid expansion revealed vulnerabilities: a massive blackout in April affected Spain and Portugal after grid oscillations at a large solar plant exposed the system’s lack of stabilizing inertia. Unlike conventional power plants, solar and wind rely on inverters that need a stable grid, leaving systems less able to absorb sudden shocks.
- Price shocks
Some critics argue that RE, particularly offshore wind (OSW), is expensive and could burden consumers. But RE supporters highlight that though offshore turbines require high upfront investment, they produce 12 to 15 megawatts (MW) per unit, nearly double the capacity of onshore wind. Advocates say the long-term costs are far lower than those of fossil fuels. Unlike coal or LNG, which carry recurring fuel and maintenance expenses and expose consumers to price shocks, wind and solar have minimal operating costs once online.
RE advocates also note that past concerns over high prices have been proven wrong. Tariffs for solar, for example, dropped from ₱9 per kilowatt-hour a decade ago to ₱3 today. As Antonio La Viña, former Philippine climate negotiator, put it, “It’s the same debate. We have already moved on to renewables. These are last-ditch attempts of coal to stay relevant.”
But early movers in RE suggest that it is not as affordable as it appears. The UK, once known for some of the cheapest electricity in Europe, now faces some of the highest energy prices in the developed world, with businesses paying at least 50% more than most European competitors and over three times the rates in the US. The Ukraine war spiked gas prices, but structural issues such as an aging national grid, limited storage for renewables, and island isolation, along with policy costs like green levies, have also driven bills higher.
Germany is experiencing similar challenges. Despite rapid growth in wind and solar, households and businesses pay some of Europe’s highest power costs. Grid upgrades needed to support renewable expansion are expected to increase expenses further, prompting leaders to advocate a slower rollout. Economy Minister Katherina Reiche said the country needs to “better align” RE with grid capabilities and warned that exuberant grid fees are driven by “completely unrealistic, completely exaggerated renewable energy target.”
Eduardo Araral, associate professor of Public Policy at the National University of Singapore, underscored the potential regressive impact of RE in the Philippines. High development costs for technologies like OSW could drive up electricity prices, disproportionately affecting lower-income and off-grid households. “As recent data shows, lower-income households in countries with energy poverty can spend between 10-40% of their income on energy, and the cost per kilowatt-hour is significantly higher for them, especially when relying on renewable sources,” he wrote.
- Infrastructure readiness
Robust infrastructure is essential for the success of RE. One of the key challenges identified was the limited ability of many RE projects to connect to the grid. “The role of NGCP (National Grid Corporation of the Philippines) is very crucial,” stressed Romil Hernandez, director for energy policy at the Institute for Climate and Sustainable Cities (ICSC). “They are supposed to be our partners in accelerating renewable energy.”
NGCP’s Transmission Development Plan shows that nearly half of the 16,896 MW of committed capacity will connect renewable sources, but also flagged new challenges due to the intermittent nature of variable RE. The plan highlights the need for grid upgrades, advanced forecasting, flexible storage systems, and technologies such as STATCOM to improve operational flexibility. Proposals also include decentralizing the grid through microgrids to link distant renewable sites to distribution utilities.
Manila Times columnist Ben Kritz said that grids must be upgraded to allow variable RE to match the role of conventional power plants while maintaining a reliable supply. “Those upgrades will include advanced digital controls, real-time monitoring, and automated demand management,” he wrote. “In other words, grids will have to be able to better respond to rapid voltage and frequency changes so that inconsistent power supply and outages are prevented.”
He added that Ember estimates that Southeast Asia will need $4 billion to $10.7 billion for these upgrades.
(Also read: Why Economic Growth Still Depends on Reliable Power)
Legacy fuels still play a role
Though Ember says that renewables have generally overtaken coal, it warns that the global picture remains mixed. Wealthier nations, including the US and EU, have increased their reliance on fossil fuels for electricity. According to the International Energy Agency (IEA), coal remains the world’s single largest source of energy generation in 2024, a position it has held for over half a century.
Recently, BDO Capital and Investment Corp. publicly expressed its willingness to finance new coal power projects. BDO Capital President Eduardo V. Francisco said, “We’re open to coal, but then there has to be DOE exemption,” referring to projects outside the current coal moratorium. He added that as a major local bank, they must balance shareholder concerns with public and DOE support, noting that “these projects are needed by the country and still part of the energy mix – there are still coal plants that need to be built.”
DOE Secretary Sharon Garin indicated that the DOE could allow exceptions to the 2020 coal moratorium for “own-use” plants that serve companies’ internal power needs. The agency also clarified that new on-grid coal capacity may still be approved ““solely under exceptional circumstances, such as during a declared or imminent power crisis, or when there is an imminent shortage of electricity supply that, if unaddressed, may lead to severe impacts in specific areas or regions.” Additionally, it noted that off-grid coal projects and own-use coal plants for critical mineral operations are exempt from the moratorium.
Meanwhile, Kritz pointed out that the Philippines’ energy supply is remarkably balanced. RE is projected to make up about 33% of the total, with oil at 32%, coal at 30%, and the remainder from natural gas. “A balanced supply is a prerequisite for achieving energy security; it is not the only necessary factor, but without it, energy security is practically impossible,” he wrote.
Araral echoed this view, stressing a pragmatic approach to the energy transition. “We should not rush to it [energy transition] and abandon our legacy simply because we want to be green,” he stated. “I think we have to do this in a very, very pragmatic way, and the first and foremost principle really is energy security and affordability.”
Source:
https://www.bbc.com/news/articles/cx2rz08en2po
https://www.global-climatescope.org/markets/philippines
https://www.renewableinstitute.org/spain-renewables-top-55-of-power-in-july-solar-pv-leads
https://theweek.com/tech/why-britains-electricity-bills-are-some-of-the-highest-in-the-world
https://www.manilatimes.net/2025/10/16/opinion/columns/our-grid-is-already-smart/2201514
https://mb.com.ph/2025/10/06/bdo-open-to-financing-new-coal-plants-nuclear-projects
https://mb.com.ph/2025/09/15/doe-no-plan-to-close-coal-mines