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On April 28, 2025, a sudden and cascading power failure plunged Spain and Portugal into darkness, cutting electricity to tens of millions within seconds. The blackout, which began shortly after midday and stretched into the night, paralyzed transport systems, mobile networks, and businesses, leaving cities gridlocked and commuters trapped in trains and elevators across the Iberian Peninsula.
According to the International Energy Agency (IEA), the event underscored how deeply electricity is embedded in modern society. “Within seconds of a failure, millions of citizens and businesses can be affected as power goes down for homes, schools, communication networks, financial services, transport, and much more, disrupting the economy and daily life,” it noted.
Spain’s leading business group, CEOE, estimated that the blackout wiped about €1.6 billion, or roughly 0.1% of GDP, from the economy.
(Also read: Why Rushing the Energy Transition Could Backfire)
Driving the nation toward full electrification
The Philippine government recognizes the vital role of electricity in driving economic growth and improving the quality of life. To this end, it aims to achieve full household electrification by 2028, according to the Department of Energy (DOE).
DOE Undersecretary Rowena Guevara said the initiative could yield about ₱315 billion in economic benefits, equivalent to 1.8% of the country’s 2023 GDP. Roughly two million households remain without power, but extending electricity access to 16 to 24 hours daily could raise household incomes by nearly 50% and increase spending by over half.
To ensure reliable power and sustain economic growth, the Philippines and similar countries need a combination of policies, investments, and institutional capacity. Key components include:
- Reliable baseload & firm capacity
In the height of the summer months in 2025, the National Grid Corporation of the Philippines (NGCP) renewed its call for more dependable baseload power to keep the country’s electricity supply stable amid rising demand. Spokesperson Cynthia Alabanza said that from a grid management perspective, reliable and non-intermittent energy sources are crucial to maintaining the strength of the transmission network.
She noted that while renewable energy (RE) is key to a cleaner future, its variability remains a challenge.
Case in point is Spain’s recent blackout, which exposed the limits of overreliance on renewables. Despite wind and solar accounting for around 43% of its electricity, which is far above the global average, the country’s grid faltered under sudden fluctuations.
Experts from the Baker Institute for Public Policy said the incident underscored a long-known risk: renewable-heavy systems often lack sufficient ancillary services like frequency control and inertia, typically supplied by rotating machinery in nuclear, thermal, and coal plants to keep the grid stable.
The DOE also recognizes the critical role of coal-powered plants in stabilizing the country’s energy supply as the Philippines moves toward a cleaner power mix. Former DOE Secretary Raphael Lotilla said the current baseload capacity, largely provided by relatively new coal facilities totaling more than 6,300 megawatts (MW), is sufficient to meet national demand until around 2030.
Lotilla explained that many of these plants, being less than a decade old, can reliably operate for another 30 years, while an additional 3,400 MW of older facilities could continue running for at least another decade. “We do not set aside our responsibility to ensure adequate baseload capacities in conjunction with our push to increase RE share in the power mix,” stated Lotilla.
- Grid flexibility and modernization
Grid upgrades are essential tools to absorb the variable output of RE and ensure reliable electricity service. Smart grid technologies, demand-response programs, improved transmission infrastructure, and energy storage can help the grid respond in real time to fluctuations in supply and demand.
To address this, the administration included energy storage system (ESS) components in the fourth Green Energy Auction (GEA-4), marking the country’s first renewable bidding round to require storage integration. However, the auction secured only about 9,423 MW of capacity, or 88% of the government’s goal.
While electric cooperatives (ECs) are being urged to source power from RE producers, National Electrification Administration (NEA) Chief Antonio Mariano Almeda said weak grid infrastructure remains a major obstacle, particularly in Western Visayas. He cited the January 2024 Panay blackout as proof, noting, “A lot of REs are hooked up to the grid, but it was not ready to accommodate the fluctuations caused by RE plants, and it gave way.”
The grid’s fragility, however, also reflects years of underinvestment in power distribution. A study by the Iloilo-based Institute of Contemporary Economics (ICE) found that ECs serving Panay and Guimaras had used only 22.6% of their ₱10.52-billion capital budget between 2022 and September 2024. ICE warned that without stronger investment, these systems risk falling behind amid the growing share of renewables in the energy mix.
- Policy certainty & enabling environment
The government has taken steps to ease RE development, including streamlining offshore wind permitting by removing the need for separate foreshore leases. However, uncertainty persists as “no-go zones” for offshore sites remain undefined, raising concerns that service contracts could overlap with ecologically sensitive or restricted areas. The Civil Aviation Authority of the Philippines has already identified five projects located in “no-build” zones due to aviation safety risks.
Policy inconsistencies have also weakened investor confidence. In 2023, low Green Energy Auction Reserve (GEAR) prices led to weak participation in GEA-2, with the DOE awarding only 3,580 MW, or about 30% of the 11,600 MW on offer. Industry players said the price ceilings failed to reflect market realities, discouraging developers from bidding.
Beyond policy gaps, corruption at the local level continues to undermine the investment climate. Rappler columnist Val Villanueva wrote that developers face pressure to make facilitation payments and source materials from politically connected suppliers— conditions that foreign investors governed by anti-bribery laws in the US and UK cannot legally tolerate, forcing many to walk away.
(Also read: Why Camiguin Urgently Needs Reliable Power)
Global trends: Energy supply & economic expansion
According to BusinessWorld columnist Bienvenido Oplas, Vietnam posted the fastest economic growth among major economies in 2024 at 7%. Based on average growth from the first three quarters, India grew 6.6%, the Philippines 5.8%, Taiwan 5.2%, Malaysia 5.1%, Indonesia 5%, and China 4.9%.
Oplas observed that these high-performing Asian economies share one key trait: heavy reliance on coal for power generation. In 2023, coal accounted for between 42 and 75% of their electricity mix. From 2015 to 2023, these same countries also recorded strong average GDP gains.
Additionally, major economies that sharply reduced coal use between 2007 and 2023, such as the US, Germany, Spain, the UK, Poland, and Australia, have seen sluggish economic growth. Among them, only Poland posted relatively strong growth at 3.7%.
Meanwhile, countries shifting away from coal have also faced higher or stagnant inflation, while economies that expanded coal consumption ecorded lower inflation rates alongside steadier growth.
DOE Secretary Sharon Garin said the government is weighing possible exemptions to the 2020 coal moratorium because some companies have applied to build “own-use” coal plants. These facilities are intended to generate power exclusively for a company’s internal operations rather than for sale to the grid.
As the government expands RE, Garin highlighted that the country needs to maintain reliable baseload capacity from sources such as coal, gas, hydropower, and geothermal. “Because we are really pushing for renewable energy, and we’re trying to find also, we want to be fair, not just clean, but also affordable. So, that’s a dilemma that we have always,” she stated.
Sources:
https://www.modernpowersystems.com/news/iberian-blackout-the-causes-revealed
https://www.reuters.com/business/energy/post-blackout-spain-portugal-companies-count-cost-2025-04-29
https://www.pna.gov.ph/articles/1219022
https://www.rappler.com/voices/thought-leaders/vantage-point-why-green-energy-failing
https://www.bworldonline.com/opinion/2025/01/09/645399/more-coal-more-growth-cheaper-electricity/
https://www.reuters.com/world/europe/what-could-be-behind-iberian-power-outage-2025-04-29