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A recent investigative report cast a spotlight on the Philippines’ renewable energy (RE) sector, noting that some of the country’s largest conglomerates have emerged as its key players. It argued that large business groups such as San Miguel Corporation, Prime Infrastructure, and First Gen Corporation have secured lucrative hydroelectric and geothermal projects while regulators struggled to keep pace.
The report further claimed that consumers may ultimately bear the cost of limited competition, facing higher electricity prices than they might have under a more open and competitive RE market.
But the question remains: are corporations to blame for taking advantage of opportunities available under the current framework, or does the issue lie deeper in the policies and bidding mechanisms that shape how projects are awarded?
(Also read: World’s Largest Integrated Solar And Battery Project Reaches Key Milestone In Philippines)
The High Cost of Scaling Up RE
The same journalistic group behind the report highlighting corporate dominance in RE expansion had previously criticized these companies for continuing to invest in coal projects while highlighting that their clean energy commitments remained insufficient. In its previous piece, the group wrote, “Given their hold on the market, the same conglomerates have the power to accelerate—or obstruct—these targets,” referring to the country’s RE transition goals.
Now that corporations are taking a larger role in RE development, the group pointed to their outsized role in the sector, saying the Green Energy Auction Program (GEAP) saw limited competition, with winning bidders largely coming from major corporate players.
However, the report overlooked the capital-intensive nature of RE development. Given the scale of investment, technical expertise, and infrastructure required, large conglomerates are often better positioned to undertake major RE projects and help accelerate the country’s energy transition.
Under the Philippine Energy Plan 2023–2050, the country aims to increase RE’s share to 50% by 2050, requiring an estimated ₱10.7 trillion in investments from 2029 to 2050, or about 2% of 2024 GDP annually, according to the International Monetary Fund (IMF).
For instance, the article pointed to last year’s auction for 100 megawatts (MW) of geothermal capacity, where only three of the seven qualified plants participated. All three bidders were owned by the Lopez family’s First Gen Corporation, leaving the auction with no effective competition.
As a result, the Energy Regulatory Commission (ERC) allowed the remaining bidders to submit higher offers. However, this outcome cannot be attributed to the corporations, which participated under the rules of a bidding system that failed to attract sufficient competition.
Additionally, developing geothermal projects requires substantial capital from the outset, with companies needing to spend heavily on exploration, drilling, and plant construction before generating power.
The International Energy Agency (IEA) estimates that capital expenditures account for more than half of geothermal power’s total electricity cost, at around $140 per megawatt-hour (MWh) out of a total levelized cost of $250 per MWh. Projects also face uncertainty from complex underground conditions, where inaccurate assessments of geothermal resources during deep well drilling, often exceeding 500 meters, can lead to expensive setbacks and delays.
“Renewable energy promises a cleaner and affordable alternative to fossil fuels,” the report asserted. “Power from wind, water, sunlight, and geothermal heat produces little to no emissions and shields consumers from pass-on fuel charges and price shocks tied to global commodity markets.”
While RE can deliver lower costs over the long term, reaching that point requires significant time, investment, and system upgrades. Solar power can reduce reliance on conventional grid sources, but its variable output means the country must also invest in transmission improvements, backup generation, and energy storage to ensure a stable power supply.
A Rushed Transition?
The report acknowledged that the Philippines has set ambitious RE targets, aiming to raise the share of renewables to 35% by 2030 and half of the country’s energy mix by 2040. The Department of Energy (DOE) insisted that the GEAP plays a key role in securing the capacity needed to meet these goals.
As DOE Undersecretary Rowena Guevara explained, “We needed guaranteed capacity by a certain timing.” However, the urgency to bring projects online may have also contributed to limited competition among bidders, pointing to possible gaps in the auction framework.
The government’s decision to revisit its offshore wind (OSW) plans has raised questions over whether the RE push is moving ahead of the country’s ability to address key challenges. The DOE placed the GEA-5 for OSW on hold to reassess the auction framework and address project development concerns.
OSW faced criticism from some energy observers over its financial and technical requirements. The technology demands substantial upfront investment, with industry estimates placing development costs at $3 million to $7 million per MW. Beyond cost concerns, questions remain over the Philippines’ transmission capacity, grid readiness, and environmental considerations.
(Also read: New Bangui Wind Farm Proposed To Strengthen Luzon Grid by 2031)
How Private Companies Became Central to Power Expansion
For decades, the Philippine power sector was largely controlled by the government through the National Power Corporation (Napocor), which held a monopoly over electricity generation during the Marcos Sr. administration. But mounting financial losses and aging infrastructure left the state unable to build enough new power plants or keep existing ones running efficiently. As electricity shortages worsened in the 1980s, the government began opening the industry to private investors to help address the growing power crisis.
That shift accelerated in the 1990s, when the Ramos administration relied on private developers to rapidly build new generating capacity amid widespread blackouts. The transition was cemented with the passage of the Electric Power Industry Reform Act (EPIRA) of 2001, which privatized much of the government’s power generation assets and positioned private companies at the center of the electricity sector. The move was intended to improve energy security and expand access to electricity.
Today, as the country’s population and economy continue to grow, so does the demand for reliable electricity. But at the distribution level, many consumers still complain about recurring power outages, slow service, and high electricity rates from some government-supervised electric cooperatives (ECs). These persistent issues have renewed calls to modernize the sector and improve the quality of power distribution.
Private companies are increasingly stepping in to fill those gaps by partnering with struggling ECs. In some cases, they have also taken over the distribution of electricity in areas previously served by ECs following court rulings.
Recent examples include the proposed modernization partnership between South Cotabato II Electric Cooperative (SOCOTECO II) and Ignite Power, the joint venture between MORE Power and the Central Negros Electric Cooperative (CENECO), and Davao Light’s takeover of areas previously served by the Northern Davao Electric Cooperative (NORDECO).
While critics argue that private companies are steadily taking over the distribution sector, the shift has largely been driven by consumers who have spoken up about poor service and by government officials who have backed greater private sector participation to address longstanding problems in some ECs.
Better Power for Filipinos
The debate over the role of corporations in the Philippines’ energy transition should not be reduced to whether private companies are good or bad actors. Businesses will naturally pursue opportunities within the policies and market structures created by the government. The bigger question is whether those frameworks are designed to deliver the outcomes the country needs: reliable electricity, affordable rates, and a cleaner energy future.
A just and effective energy transition requires more than attracting investments. It also demands competitive bidding systems, strong regulation, transparent policies, and safeguards to ensure that the benefits of RE reach consumers, not just investors. If a different framework can better balance competition, affordability, and sustainability, then policymakers should be willing to explore it.
Ultimately, the goal is shared by all stakeholders: to build an energy system that can support economic growth, protect consumers from high costs, and reduce environmental impacts. The challenge is not simply deciding who should power the country, but creating the conditions that allow the power sector, whether public, private, or a combination of both, to serve Filipinos better.
Sources:
https://pcij.org/2026/06/23/tycoons-swoop-in-clean-energy-boom/
https://www.elibrary.imf.org/view/journals/018/2026/005/article-A001-en.xml
https://pcij.org/2025/09/25/tycoons-behind-the-philippines-dirty-energy/
https://www.iea.org/reports/the-future-of-geothermal-energy
https://business.inquirer.net/600130/doe-suspends-auction-for-offshore-wind-projects
https://mb.com.ph/15/12/2024/doe-to-slash-offshore-wind-performance-bond-to-5
https://tribune.net.ph/2026/07/11/court-clears-way-for-razon-firms-talks-with-south-socoteco-ii-2