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The Philippines’ renewable energy (RE) share in installed electricity capacity edged up to 31.2% in 2025 from 30.1% a year earlier, according to the International Renewable Energy Agency (IRENA). The country now has about 10,436 megawatts (MW) of renewable capacity and ranks fifth in the region in terms of RE share.
However, installed capacity is not the same as actual electricity produced. Installed capacity refers to the maximum possible output of power plants, while actual generation reflects the electricity produced over time.
Meanwhile, the capacity factor is a measure of how much electricity a power source actually produces compared to its maximum possible output if it ran at full capacity all the time. In simple terms, it shows how consistently and efficiently an energy source generates power.
PhilStar columnist Boo Chanco highlighted that lower capacity factors are what cause RE sources such as solar and wind to generate less actual output than their installed capacity suggests.
“The capacity factor for solar is only 16 percent, and wind is only 33 percent. This means one MW of renewable energy is not the same as one MW of coal, geothermal, and hydro that we use for baseload,” he wrote. When the sun goes down, and we all flick on the switches to watch television or cook our food, we cause a spike in demand. Solar is useless in the evening peak unless it is backed up by batteries, even then, only for two to four hours.”
With electricity demand projected to grow at an average of about 3.4% annually through 2026, energy systems are facing increasing pressure. This raises a practical question: can fossil fuels, long the backbone of reliable power, really be phased out completely?
(Also read: Who Is Responsible for the Red and Yellow Alerts in the Luzon and Visayas Power Grids?)
Energy and Modern Society
Energy is often described as a sector in transition, but in reality, it remains the foundation of modern society. Without it, the global economy does not slow down; it stops. Baseload power, which refers to the continuous 24/7 electricity supply typically provided by fossil fuels, remains essential for economic growth and development, especially in emerging economies like the Philippines.
According to Chris Young, managing director at professional services network KPMG, rising global energy demand means oil, gas, and coal are not disappearing and are still increasing in production.
“Global energy demand grew by 2 percent in 2024, as fossil fuel production reached record levels, up by 1 percent on the previous year,” he pointed out. “Renewables may be growing fast, but they currently only account for 13 percent of the world’s energy sources.”
This is because fossil fuels are embedded in daily life far more deeply than most people realize, underpinning systems that help feed populations, sustain global food production, power healthcare and medical innovation, and enable the large-scale transport of essential goods and services across countries.
Global food production
“Industrial man no longer eats potatoes made from solar energy; now he eats potatoes partly made of oil,” wrote Vaclav Smith in his New York Times best-seller How the World Really Works: The Science Behind How We Got Here and Where We’re Going. “Our food is partly made not just of oil, but also of coal that was used to produce the coke required for smelting the iron needed for field, transportation, and food processing machinery; of natural gas that serves as both feedstock and fuel for the synthesis of nitrogenous fertilizers; and of the electricity generated by the combustion of fossil fuels that is indispensable for crop processing, taking care of animals, and food and feed storage and preparation.”
This dependence is especially evident in fertilizer production. Coal remains a major source of hydrogen for nitrogen-based fertilizers such as urea and ammonium nitrate, with more than 75% of this hydrogen in China coming from coal. Since about half of the world’s population relies on food grown using synthetic fertilizers, a rapid phaseout of coal could disrupt supply chains, drive up food prices, and heighten food insecurity.
Building on this, Copenhagen Consensus President Bjorn Lomborg noted that fertilizers, also largely made from natural gas, enable “half of all the calories we consume from proteins, carbs and fats.” Because fertilizer production depends on global supply chains, disruptions in energy flows can quickly affect agriculture, especially in vulnerable regions.
“In short, for decades it will be impossible to adequately feed the planet without using fossil fuels as sources of energy and raw materials,” asserted Smil.
Healthcare and medical innovation
Many modern medicines are closely tied to crude oil, not as fuel, but as a source of chemical building blocks. When refined, crude oil produces petrochemicals such as benzene, ethylene, propylene, and toluene. These compounds are widely used in the pharmaceutical industry as raw materials for solvents, chemical intermediates, and active pharmaceutical ingredients that go into everyday medicines.
Several common drugs trace parts of their production to these petroleum-based inputs. Aspirin, for example, is linked to benzene-derived chemistry, while paracetamol (acetaminophen) is produced using phenol, which is also derived from petroleum. Even many antibiotics, antihistamines, and painkillers rely on petrochemical intermediates at different stages of their manufacturing process.
Beyond the drugs themselves, petroleum plays a major role in medical delivery systems. Plastic-based materials used in IV bags, syringes, and other sterile equipment are all derived from petrochemicals.
This reliance is not accidental. Petroleum-derived inputs allow for lower production costs, large-scale manufacturing, and consistent chemical quality, which are critical for a global healthcare system that depends on affordability and reliability. Synthetic processes built on petrochemicals also help ensure stability and uniformity in drug formulation, making it possible to distribute medicines widely and safely.
Poverty alleviation
Coal continues to play a significant role in addressing global energy poverty, where access to basic electricity and clean cooking remains limited for large parts of the world. The burden is heaviest in sub-Saharan Africa and developing Asia, which together account for roughly 95% of those living in energy poverty.
The lack of reliable energy access has serious human consequences. Without progress toward universal electricity, estimates suggest that by 2030, household air pollution and weak basic services linked to energy scarcity could contribute to around 1.5 million premature deaths annually. Limited access to power also constrains education and sanitation systems that depend on stable electricity to function effectively.
Energy access is closely tied to development outcomes. Higher electricity use generally correlates with longer life expectancy, better educational performance, and higher incomes. Over the past few decades, coal has remained one of the dominant sources of global electricity, and between 1990 and 2010, about 1.7 billion people gained access to electricity, a shift partly supported by coal-based expansion.
(Also read: Securing Growth: The Critical Link Between Energy and Economic Resilience)
The Reality of Energy-Driven Development
In the Philippines, the role of fossil fuels is not theoretical but operational, particularly in maintaining grid stability amid rising demand. While renewable energy capacity has expanded in recent years, the system continues to face challenges in balancing supply and demand, especially during peak hours and in island or off-grid areas.
This tension was seen in recent red and yellow alerts issued in May, which disrupted daily life and affected businesses. Energy Regulatory Commission (ERC) Chairperson Saturnino Juan pointed to the output profile of RE, particularly solar generation, which declines just as demand rises toward the evening peak, contributing to tight supply conditions.
Juan stressed that the resulting outages reflect not only overall supply constraints but also the challenge of replacing declining solar output with flexible, dispatchable power. “We are not simply facing an afternoon and early evening shortage; we are facing a flexibility shortage in the hours after the sun goes down,” he explained.
The Philippines contributes only about 0.5% of global emissions, yet it is among the countries most vulnerable to climate impacts. Despite this, it is often held to the same pace of decarbonization as advanced economies that built their wealth over centuries of high emissions.
For developing countries like the Philippines, where many communities are still grappling with poverty and uneven access to electricity, an overly aggressive shift toward intermittent power systems raises difficult trade-offs. Energy security and affordability remain immediate concerns, and any transition must account for the risk that unreliable supply could affect livelihoods and essential services.
While these tensions are visible in the Philippine context, the same structural reality extends globally. Despite the rapid push for energy transition, Vaclav Smil argued that fossil fuels will not be easy to displace in practice.
“Both the high relative share and the scale of our dependence on fossil carbon make any rapid substitutions impossible: this is not a biased personal impression stemming from a poor understanding of the global energy system – but a realistic conclusion based on engineering and economic realities,” he declared.
Sources:
https://www.iea.org/reports/electricity-2024/executive-summary
https://kpmg.com/uk/en/insights/sustainability/fossil-fuels-arent-disappearing.html
https://www.goodreads.com/work/quotes/88381378
https://unpopular-truth.com/2026/03/18/the-new-renaissance-of-coal/
https://nypost.com/2026/04/13/opinion/how-the-strait-of-hormuz-saves-the-world-from-starvation
ERC Chairman Francis Saturnino Juan, speech at the Economic Journalists Association of the Philippines (EJAP) Energy Forum 2026, Manila, Philippines, May 26, 2026.