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The Philippines’ shift to renewable energy (RE) is moving more slowly than anticipated, even with government plans to raise clean power’s share to 35% by 2030, according to ERC Chair Francis Saturnino Juan. He stressed that the delay is not due to weak policy support or lack of ambition, pointing instead to a strong pipeline of committed projects still working through implementation.
“The gap has been in execution,” he explained. “We’re coming from an era where the regulatory approvals took too long, the grid connections were not built, the market rules that had not caught up with the technology.”
The ERC has also taken steps to speed up RE rollout by allowing generation companies and the National Transmission Corporation to build necessary transmission infrastructure. Juan said this policy addresses the biggest barrier to connecting already approved projects, helping unlock stalled capacity in the pipeline.
(Also read: AboitizPower Boosts Luzon Grid With New Pangasinan Solar Plant)
Grid Strains from RE Growth
Even with RE supplying only about a quarter of the country’s electricity, the limitations of the existing grid are already becoming evident. Built for conventional power plants, the transmission network was not designed to handle large volumes of intermittent RE generation.
Former Energy Regulatory Commission (ERC) Chairperson Monalisa Dimalanta highlighted that the recent red and yellow alerts in Luzon and Visayas last May underscore the urgent need to modernize transmission infrastructure and adapt grid operations as RE continues to expand.
“Given the direction the DoE has taken on increasing supply from RE and indigenous resources… what revisions are needed in: a.) the grid’s design to most efficiently serve variably-sized RE plants located in multiple far-flung sites, and b.) the operation of a power system with high-and-dispersed RE penetration?” she wrote.
Dimalanta also cited the 2020 Competitive Renewable Energy Zones (CREZ) study, which found that transmission expansion has struggled to keep pace with the rapid growth of wind and solar projects due to right-of-way and regulatory delays. She added that available grid capacity does not always coincide with where RE projects are being developed, warning that poor coordination between generation and transmission planning could reduce system efficiency, increase costs, and undermine reliability.
Global Struggles in Grid Modernization
The Philippines is not alone in facing challenges in its RE rollout. Even wealthier economies are grappling with the transition, as it demands massive investment and complex system-wide upgrades.
As the United States integrates more wind and solar power into its energy mix, grid utilization has declined, with the system operating at only around 40% to 55% of its capacity. The intermittent nature of renewables means their output can vary significantly, requiring operators to keep additional backup resources and invest in grid upgrades to maintain reliability.
In the Netherlands, grid congestion has become a major obstacle to the energy transition. Between 2018 and 2023, solar PV capacity rose fivefold. However, grid expansion has lagged behind the rapid growth in both electricity demand and distributed generation.
Under net metering, electricity exported to the grid is compensated regardless of market prices, weakening incentives to align solar output with system needs. By early 2025, around 10,000 large users, including consumers and batteries, and about 7,500 generation projects above household-scale PV were still awaiting connection to the grid.
While Germany has reached record levels of RE generation, grid constraints continue to create major bottlenecks, often forcing wind farms in the north to curtail output when power cannot be efficiently transmitted to high-demand southern regions. In 2023 alone, about 19 terawatt-hours (TWh) of RE was lost due to these limitations.
Meanwhile, in the United Kingdom, rising electricity demand from electric vehicles and electrified homes is putting unprecedented strain on the network, with peak demand projected to rise by up to 50% by 2035, underscoring the need for expanded grid capacity and energy storage.
According to the International Energy Agency (IEA), despite rapid growth in RE generation, power grids are increasingly struggling to keep up. More than 2,500 gigawatts (GW) of RE and storage projects remain stuck in grid connection queues due to insufficient transmission infrastructure.
The agency warned that meeting projected 2030 electricity demand would require a significant scale-up in investment, including roughly a 50% increase in annual grid spending from the current level of about $400 billion, as well as stronger and more resilient grid supply chains.
(Also read: Energy Crisis Reshapes Global Investment in Power Systems)
Can the PH Afford the RE Transition?
In March 2025, the National Grid Corporation of the Philippines (NGCP) released its updated Transmission Development Plan for 2025–2050, outlining a major grid expansion aligned with the country’s RE goals. The plan allocates around ₱485.2 billion to add about 2,148 circuit kilometers of transmission lines and 23,325 MVA of substation capacity by 2034.
However, the grid is already struggling to keep up with the rapid rise of RE, particularly solar, as seen in recent power alerts in Luzon and Visayas. While solar supports daytime demand, its output drops sharply in the late afternoon just as evening consumption rises, creating a supply gap that pressures system stability and has contributed to red and yellow alerts.
As Juan noted, “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.”
For a country with limited resources, the question is not simply how much new capacity can be added, but how much reliable electricity each peso of investment can deliver. The Philippines should prioritize high-efficiency grid investments that reduce bottlenecks, improve reliability, and maximize the use of existing and future power resources. Strengthening transmission and distribution systems will be critical as the country expands RE, since a more flexible and resilient grid is needed to integrate variable power sources while keeping electricity affordable and dependable.
However, given the scale of investment required for grid upgrades and supporting infrastructure, the House of Representatives Congressional Policy and Budget Research Department (CPBRD) warned that a sudden, aggressive shift to RE could strain the national budget, slow industrial development, and lead to higher electricity costs for consumers.
Under the Paris Agreement, the Philippines has committed to cutting emissions by 75% by 2030 even if its contribution to global emissions is only .5%. The CPBRD study estimated that achieving this target would require about $72 billion in investments.
“Diverting immense financial resources toward renewable energy transitions may heavily strain the national budget, potentially hindering other crucial development goals such as education, healthcare, and poverty alleviation,” it highlighted.
The report also cautioned that solar and wind, while important for clean energy expansion, are variable sources that cannot consistently provide baseload power on their own. To prevent widespread power shortages, governments may still need backup generation from fossil fuels such as coal and natural gas.
Because awareness of the full costs of RE may still be limited, the study urged the government to factor in the broader financial burden of deployment. This includes consumer-funded subsidies such as the Feed-in Tariff Allowance, high grid connection costs, and the potential loss of agricultural land.
In conclusion, the CPBRD argued that the Philippines would need a stable, prosperous, and industrialized economy first before it can realistically sustain the high costs of a fully green transition.
“Addressing the ‘energy trilemma’ in the Philippines is also crucial because the country must simultaneously ensure reliable electricity (security), keep power affordable (equity), and reduce emission (sustainability) to meet development and climate goals. The unmanaged tradeoffs between policies that cut carbon but sharply raise prices can worsen inequality and risk policy gridlock if decision-makers cannot transparently weigh these three objectives,” the report asserted. “For now, given the circumstances, the Philippines may find it economically and physically difficult to cut emissions without compromising growth and the welfare of people.”
Sources:
https://business.inquirer.net/597186/erc-chief-renewable-energy-rollout-lags-despite-govt-push
https://www.instagram.com/p/DWUIAVhFI99
https://bworldonline.com/opinion/2026/05/22/751239/all-about-that-grid/
https://spectrum.ieee.org/united-states-power-grid-capacity
https://www.iea.org/reports/electricity-2026/executive-summary
https://univers.com/articles/grids-in-crisis-a-wake-up-call-for-europe/
https://www.facebook.com/media/set/?vanity=ejap.pilipinas&set=a.1297606742543353
ERC Chairman Francis Saturnino Juan, speech at the Economic Journalists Association of the Philippines (EJAP) Energy Forum 2026, Manila, Philippines, May 26, 2026.