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Year after year, electric power demand in the Philippines continues to climb. According to the National Grid Corporation of the Philippines (NGCP), system peak demand reached 15,270 megawatts (MW) most recently. This figure is expected to rise further during the summer months when consumption spikes due to air‑conditioning and industrial loads.
Meanwhile, the country’s available generating capacity sits at about 21,710 MW, a number that offers comfort on paper but masks localized vulnerabilities.
This gap between rising demand and available, dependable supply has become painfully clear, especially in Visayas and Mindanao, where summer reliability concerns have again surfaced because renewable energy (RE) projects promised to fill that capacity haven’t materialized.
At the same time, policymakers and RE advocates have long touted renewables as the panacea: cheaper electricity, cleaner air, less reliance on fossil fuels and foreign fuel imports, and a dependable substitute that could one day power all homes and businesses.
“We’re focused on ensuring that the transition delivers on its promise of affordability, reliability, and energy security,” said Department of Energy (DOE) Undersecretary Rowena Cristina Guevara in August 2025. With every solar or wind project we bring online, we reduce our dependence on imported fossil fuels, making our energy system more resilient.”
Yet this promise rests on assumptions that have yet to hold. Renewable projects are often not delivered on time, and even when they are, higher auction prices, grid integration costs, and intermittency continue to undermine claims of affordability and reliability.
(Also read: NGCP Moves to Boost Ilocos Norte Grid Stability With P2.82-B Upgrade)
Ambitious RE claims
When the Philippine government first pushed a big shift toward RE, it came with ambitious targets and public statements that presented renewables as both inevitable and sufficient.
Anchored in the Renewable Energy Act of 2008 (RA 9513), the National Renewable Energy Program (NREP) set an ambitious course: renewables would supply 35% of the country’s power by 2030, rising to half of the energy mix by 2040.
To meet these targets, the Philippines would need to increase its installed renewable capacity to 52.83 gigawatts (GW) by 2040, which is nearly seven times the 8.26 GW in place in 2024. This ambitious expansion follows the DOE’s decision to raise the Renewable Portfolio Standard (RPS) to 2.52% in 2023. DOE Assistant Secretary Mylene Capongcol explained that achieving this capacity would be necessary to generate roughly 175 terawatt‑hours (TWh) of RE.
Under RA 9513, the Philippines committed to growing the share of RE in the power mix and to expanding its RE infrastructure. Mechanisms like Feed‑in Tariffs (FiT), Renewable Portfolio Standards (RPS), and the Green Energy Auction Program (GEAP) were created to attract investment and accelerate deployment.
However, many RE projects failed to progress toward construction and operation. In 2025 alone, the DOE revoked 84 RE contracts, representing about 5,372 MW of potential capacity that had previously been counted in national energy planning assumptions. This was after developers failed to satisfy work program requirements, meet the Green Energy Auction (GEA) Terms of Reference, or adhere to technical and legal standards.
Solar Philippines Fallout
A particularly high‑profile case of DOE’s “purging” involved Solar Philippines Power Project Holdings, Inc. (SPPHI). Its founder, Batangas Rep. Leandro Leviste, faced scrutiny after the DOE moved to levy approximately ₱24 billion in penalties and terminate 33 contracts due to persistent non‑delivery.
According to DOE Secretary Sharon Garin, Solar Philippines alone accounted for more than 11,400 MW of terminated renewable energy contracts, which is about 64% of the total capacity revoked by the DOE in 2024 and 2025. Another SPPPHI subsidiary, Solar Para sa Bayan Corp., has yet to complete a single power project since its establishment in 2019.
The DOE is seeking roughly ₱24 billion in penalties from Solar Philippines, covering performance bonds, contractual obligations, and other fees linked to the company’s failure to deliver its projects.
Leviste, however, denied receiving government funds, insisting, “Wala akong nakuhang kahit piso mula sa gobyerno” (I never got a single peso from the government) and that his company’s capital came from private business. In social media posts and interviews, he defended his firms and their investments, emphasizing private backing and contributions to the RE sector.
The DOE made clear that it will no longer tolerate non-compliant power developers that secure government contracts without delivering projects. Garin stressed that the agency is focused on attracting “legitimate investors,” not “fly-by-night” firms or project flippers, and warned that additional sanctions are being considered. These include the possible filing of civil, criminal, or administrative cases against erring developers. Terminated power generation capacities will be reoffered in future RE auctions.
The Solar Philippines case, though exceptional, highlights broader questions about the RE sector’s readiness. Delays and non-delivery underscore the need for careful oversight and capable execution as the country expands its renewable portfolio.
(Also read: Left in the Dark: How Amianan’s Electric Cooperatives Failed Communities for Decades)
Rising electricity costs from RE
Alongside the issue of delayed capacity is the alarming trend of higher electricity prices.
Under the GEAP, RE developers bid to supply power at competitive prices. In principle, this should drive down costs as supply increases. However, the reality has been more complicated.
Recently, the ERC approved an additional ₱0.0371 per kilowatt-hour (kWh) charge, effective with January 2026 billing, to fund the Green Energy Auction Allowance (GEA-All) and recover a total of ₱5.7 billion. This fee will apply to all on-grid electricity users and is collected through distribution utilities, NGCP, and retail suppliers before being remitted to the National Transmission Corporation (TransCo) to cover payments owed to GEA-eligible renewable plants.
According to Manila Bulletin’s Myrna Velasco, the Department of Energy (DOE) projects that RE auctions could bring wholesale electricity prices down to an average of ₱3 per kWh by 2029, from roughly ₱5 in 2026. However, consumers are unlikely to see immediate relief.
“Because renewables can bid ‘zero’ in the spot market due to their priority dispatch privilege—and because their capacities are already covered by PSAs—an illusion of cheaper electricity is created,” she argued. “This artificial dip won’t translate to lower bills if the GEA-All surcharge remains on an uptrend.”
Veteran business journalist Val Villanueva noted that GEA‑5, the program for fixed-bottom offshore wind, is set to add 3.3 GW of renewable capacity, ranking among the Philippines’ largest clean energy projects. Despite its scale, the initiative carries a high cost, with tariffs expected to reach around ₱12 per kWh.
“OSW will still impose a significant price impact for years. It will be a burden on the grid before it becomes a strategic advantage,” he explained. “And this is where the Philippines must avoid locking itself too early into massive OSW commitments.”
Nic Satur, Jr., chief advocate officer of the Partners for Affordable and Reliable Energy (PARE), said that while the organization supports the Philippines’ shift to RE, “measures should move the Philippines toward a just, affordable, and participatory energy transition, not create new financial burdens for consumers.”
The energy shortfall every summer: A repeated pattern
NGCP spokesperson Cynthia Alabanza noted that the country’s summer electricity demand has historically surpassed the peak levels projected by the DOE.
She explained, “As we have seen in the past years, every year the demand for power increases. It will always increase, and the drivers are the same: population, economic activity, and development.”
Last reported figures show Visayas with only a 242 MW operating margin, a slim buffer against outages.
The problem is compounded by the intermittency of RE sources such as solar and wind, which generate power only when the sun is shining or the wind is blowing. This is a well-documented reality of wind and solar technologies worldwide. Without adequate grid storage, balancing capacity, or dispatchable backup plants such as natural gas, hydro, or coal, intermittent RE cannot provide a consistent supply.
Globally, grid operators face the same challenges. In markets with significant solar and wind capacity, electricity supply can swing dramatically. This risk became evident during the 2025 power outage in Spain and Portugal, which underscored the challenges of managing sudden fluctuations in RE output when wind and solar make up a large share of the grid.
Without addressing base-load reliability and intermittency, the Philippines is likely to continue experiencing recurring shortages each summer. RE should be part of the power mix, but it cannot be the sole solution. Dispatchable sources such as natural gas, hydro, and carefully managed coal facilities provide the reliability that renewables alone cannot guarantee.
A diversified energy portfolio reduces supply risks and limits price volatility, bringing the country closer to energy that is reliable and affordable year-round.
Sources:
https://caseforsea.org/renewable-energy-will-lower-electricity-prices-in-the-long-run-doe/
https://www.pna.gov.ph/articles/1159659
https://www.pna.gov.ph/articles/1222195
https://www.mdpi.com/1996-1073/18/17/4683
https://businessmirror.com.ph/2025/12/15/erc-weighs-stakeholders-interest-in-power-bill-deposits
https://mb.com.ph/2025/12/22/bbm-admins-emerging-legacy-normalizing-high-power-rates