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The Department of Energy (DOE) is moving forward with cancelling renewable energy (RE) service contracts that failed to meet their project deadlines. Of the 105 projects earlier flagged for delays, most have already been terminated, according to DOE Undersecretary Rowena Guevara.
She added that while some developers filed motions for reconsideration, only a few were accepted. “We continue to terminate projects that are far from the work plan; supposedly, they should have achieved this about three years ago, but they haven’t yet,” she explained.
Last year, the DOE reported that at least 105 RE projects were under review for possible termination. Most of these contracts were originally awarded in 2017 and 2019.
Of these projects, 88 are either delayed in their pre-development stage or showing no progress. These include 53 solar projects, 10 geothermal, 17 wind, three biomass, and five hydropower projects.
Guevara noted that solar power projects are typically completed within two years, while geothermal projects usually take longer. Delays are often caused by challenges such as securing the required permits or establishing grid connections, among other factors.
DOE Secretary Sharon Garin said that projects not making progress should not retain their contracts, as numerous investors are eager to enter the market. “There are so many that want to invest, and we’re telling them we’re purging and trying to clean up, and there will be other areas that are more interesting,” she noted.
Speaking at the Asia Clean Energy Summit 2025 in Singapore last month, Garin asserted that the DOE is maintaining its push against stalled projects to create new investment opportunities. She added that foreign investors remain interested in the Philippine power sector, as confirmed during her recent visit to Singapore, despite ongoing corruption concerns.
“That’s shown by the many meetings we’ve had with many investors from all over the world wanting to invest in the Philippines,” she said. “So I think it’s still very positive, and I don’t think it’s anything to worry about as far as energy is concerned.”
(Also read: Green Power Boost: P4.9-B Solar Farm Set for Panay)
Process of weeding out
RE developers are given two years to finish the pre-development stage, which involves securing permits, conducting surveys, completing feasibility studies, and obtaining possessory rights. If a developer fails to submit a completion declaration or show adequate progress within this period, the DOE’s Renewable Energy Management Bureau (REMB) will issue a show-cause order asking for an explanation.
Extensions may be granted for valid reasons, such as force majeure. If the explanation is insufficient or the developer fails to respond, the REMB will recommend contract termination to the DOE Secretary.
The developer must also meet all financial obligations outlined in the service contract, including the performance bond, contributions for staff training, and support for community development programs.
In 2024, the DOE started removing idle RE projects, initially targeting around 105 producers. Officials have yet to release updated data on how many developers were affected or the total capacity of the terminated contracts.
DOE Undersecretary Felix William Fuentebella observed growing interest in the Philippines’ upstream petroleum sector after eight new service contracts worth around $207 million were signed in October.
(Also read: Alba Viento to Boost Luzon Grid with P34-B Zambales Wind Farm)
Reviving idle RE projects
Earlier in July, the government announced that it was exploring a new approach to revive previously terminated RE contracts.
Mylene Capongcol, director of the DOE’s REMB, said the agency is studying a mechanism that could accelerate these projects, providing a faster alternative to the usual open and competitive selection process (OCSP) that governs many RE developments.
She explained that geothermal, hydro, and wind projects are subject to the OCSP, while solar developments do not yet have a similar process. Capongcol added that the new mechanism would be stricter, though she did not provide any further details.
Sources:
https://businessmirror.com.ph/2025/11/10/idle-re-contracts-shelved
https://business.inquirer.net/557464/purged-renewable-energy-projects-offered-to-investors
https://business.inquirer.net/536698/doe-eyes-new-scheme-to-revive-idle-renewable-projects