Explore The Vast

Energy

The Philippines, alongside Indonesia, are the countries with the highest concentration of geothermal power generation in Asia. It has the world’s third-largest installed geothermal power capacity at 1,918 megawatts (MW) – with Indonesia coming a close second and the United States coming out on top. Currently, the Philippines, alongside Myanmar, are the largest markets for off-grid solar energy in Southeast Asia. They have sold between 30,000 to 40,000 units as of the second half of 2019.

Invest Now!

75% reduction in greenhouse gas emissions by 2030

As a signatory to the Paris Agreement on Climate Change, the Philippines has pledged to cut its greenhouse gas emissions to a 75% reduction by 2030.

Source: Business World

3rd largest geothermal energy producer

The Philippines has a long history of utilising indigenous geothermal resources in electricity generation and ranks as the 3rd largest producer of geothermal energy globally.

Source: ADB

35% increase in renewable energy by 2030

The Philippines targets to increase renewables to 35% of the power generation mix by 2030 through additions of wind and solar photovoltaic power.

Source: DOE

Currently, the Philippines, alongside Myanmar, are the largest markets for off-grid solar energy in Southeast Asia. They have sold between 30,000 to 40,000 units as of the second half of 2019. [135]

Coal-fired power represented almost 48% of the nation's power in 2019-2020, according to the Philippines Department of Energy (DOE), and oil and natural gas contributed another 28%. Renewables contributed 24%, of which a 90% share was hydropower. [136]

The primary energy consumption in the Philippines reached 1.82 exajoules per capita in 2020. Across fuel types, oil accounted for the highest volume of primary energy consumption at 0.75 exajoules, followed by coal at 0.73 exajoules. Primary energy consumption refers to the total energy demand including consumption of the sector itself, transmission losses, energy distribution, as well as final consumption by end users. [137]

With minimum fossil fuel resources, the Philippines has been heavily dependent on oil and coal imports for power generation. Consequently, this subjects the country to price volatility and supply constraints. Due to this continued dependence on foreign fuel, the Philippines now has some of Southeast Asia’s highest electricity costs. [135]

Like other Southeast Asia countries, the country faces the challenge of a rapidly growing population and growing energy demand. Yet, where it differs and stands out is in its response. Compared to its neighbors, the Philippines is considered a global leader in renewable energy. Over 47% of its total energy use comes from green sources. [135]

Opportunities and
advantages

The Philippines remains highly vulnerable to the impacts of climate change. In the last few years, as potential impacts become clearer, climate action has become an important issue for energy supply, energy security, job creation and post-pandemic essentials like cleaner air and a healthy planet. [138]
Investing in renewable energy can alleviate several problems it faces. For one, it could provide a much-needed economic boost and quell fears of a U-shaped recovery. According to the World Economic Forum, citing numbers from the International Renewable Energy Agency (IRENA), every dollar invested in the clean energy transition provides 3-8 times the return. Furthermore, the widespread adoption of renewable energy creates employment opportunities up and down the supply chain. A May 2020 report by McKinsey showed that government spending on renewables and energy efficiency creates 3 times more jobs than spending on fossil fuels. Renewable energy also reduces health risks since higher consumption of fossil fuels increases air pollution. Additionally, renewable energy can provide electricity access for all while reducing electricity costs for consumers. While millions of new consumers gained access to electricity since 2000, some 2 million people in the Philippines are still without it. The low-carbon energy transition will help thwart climate change and reduce the carbon intensity of the Philippines’ power sector, as well as improve its energy system resilience. [138]
Decarbonized and decentralized power generation systems that do not require pricey, massive and logistically challenging transmission networks in rugged and remote terrains would further the goal of total electrification. Providing consumer choice for low-cost clean energy sources can also result in savings and better profit margins for businesses, particularly small- and medium-sized businesses, which are more sensitive to changes in their month-to-month operational expenses than larger corporations. [138]
The Department of Energy’s (DoE) various programs towards facilitating energy transition includes the National Renewable Energy Program (NREP). The NREP aims to realize the country’s renewable energy goals by institutionalizing a comprehensive approach to address the challenges and gaps that prevent and/or delay wider application of renewable energy technologies in a sustainable manner. Specifically, the NREP intends to raise the country’s geothermal capacity by 75%; hydropower capacity by 160%; deliver additional 277-MW biomass power capacities; attain wind power grid parity with the commissioning of 2,345-MW additional capacities; mainstream an additional 284-MW solar power capacities and work towards achieving the aspirational target of 1,528 MW; and develop the first ocean energy facility for the country. [139]
The government has developed a framework of fiscal and non-fiscal incentives. Among these are an income tax holiday, a duty-free importation of equipment and VAT-zero rating, tax credits on domestic capital equipment, tax exemption on carbon credits, priority connection to the grid, and the Green Energy Option Program (GEOP). It discontinued its feed-in-tariff (FIT) programme and instead switched to reverse auctions. The goal of this is to ensure better support for large-scale solar energy projects. This strategy resulted in more competitive solar and wind generation costs at a grid level. Currently, the country has the lowest bid within the region – USD $0.044 per 50 MW solar plant. [135]
The Department of Energy (DoE) issued guidelines establishing a “Renewable Energy Trust Fund“. Its goal is to accelerate the renewable energy transition through research and development. The scheme is funded through several sources, including grants, donations, emission fees and contributions.The DoE also has other ongoing initiatives to support the adoption of smart-grid technologies across the country’s islands. [135]
There is also a focus on promoting renewables within specific sectors like the Renewable Energy Program for the Agriculture and Fishery Sector (REP-AFS), introduced in 2020, which aims to promote solar, wind, hydro, small-scale geothermal, and biomass for fuel and power generation within those industries. [135]
Clean energy in general, and renewable energy in particular, does not lack champions in the Philippines. Various local and foreign chambers of commerce and business councils are bringing trade missions on renewables to the Philippines. Seminars are being conducted by institutions. Multilaterals like the Asian Development Bank have funded clean energy or alternative fuel projects and are committed to provide more funds. Local banks are also paying more attention to renewable energy like BDO and BPI financing renewable energy projects. [140]

Featured Companies

Aboitiz Power Corp. With over 45 generation facilities and distribution utilities nationwide, AboitizPower’s diverse portfolio of hydroelectric, geothermal, solar power generation, and thermal facilities establishes them as one of the nation’s top power producers. [141] As one of the Philippines’ largest power producers, the company helps fill the nation’s growing energy needs by providing secure and affordable access to sustainable power across the country. Its main office is located in Taguig City, Manila and another office in Cebu City. In 1998, AboitizPower was officially incorporated as a wholly-owned subsidiary of Aboitiz Equity Venture, Inc., becoming the holding company for all power-related businesses and investments of the Aboitiz Group. Its responsibilities include investing, holding, owning, and acquiring a diverse portfolio of assets in power generation, distribution utilities, retail electricity services, and distributed energy nationwide. It also provides operations, management, and technical services and advice to commercial, industrial manufacturing, and other kinds of enterprises engaged in their field of business. [141]

San Miguel Corporation Global Power MC Global Power Holdings Corp. (SMC Global Power) is one of the largest power companies in the Philippines. Serving as the energy arm of San Miguel Corporation (SMC), SMC Global Power plays a pivotal role in serving as one of the biggest power suppliers in the country through its combined installed capacity of 4,697 MW. According to the Department of Energy EPIRA Report 2020, the power the company produces is approximately 20% of the National Grid, 27% of the Luzon Grid, and 8% of the Mindanao Grid. Aside from leading the power generation industry, SMC Global Power is also a strong player in the industry of power distribution and battery energy storage in the Philippines. The company continues to venture in innovations and technologies that will change the Philippine energy mix and help the country achieve a carbon-neutral economy. SMC Global Power fulfills its mission of delivering competitive, affordable, and reliable power through its diverse, multi-fuel power portfolio, consisting of natural gas, coal, and renewable energy such as hydroelectric. The company administers the output produced by the following power plants: the Sual Coal-fired Thermal Power Plant in Pangasinan, the San Roque Hydroelectric Power Plant in Pangasinan, the Ilijan Natural Gas-fired Combined Cycle Power Plant in Batangas, the Masinloc Power Plant in Zambales with Supercritical Technology, the Limay Power Plant in Bataan and Malita Power Plant in Davao Occidental with Circulating Fluidized Bed Technology. Additionally, the company is in a joint-venture with Korea Water Resources Corp. (K-Water) for the operation and maintenance of the Angat Hydroelectric Power Plant in Bulacan. With the ongoing construction of approximately 1,000 Battery Energy Storage System (BESS) facilities across 37 locations in the Philippines, SMC Global Power will significantly usher in the use of renewable energy sources in the country and help system frequency control in the national grid. [142]

PHILERGY German Solar Philippines Since 2011, PHILERGY German Solar, a Filipino-German collaboration, has been uniting finest workmanship, top of the line German-made equipment, and exceptional customer service to provide reliable solar energy solutions to every Filipino. It is headed by German management who have been in the industry for more than 20 years. In Europe, they account for over 50,000 solar installations. Within the Philippines, they have installed solar panels to over 1,000 homes and businesses. The company, also the Philippines’ most trusted solar company based on customer reviews, has its headquarters, office and showroom located in Quezon City, Manila. All installations by PHILERGY come with up to 25 years of warranty for homes and businesses. Their solar energy systems are customized according to every client’s needs via free expert solar consultation and professional onsite analysis, and are installed by trained teams that are headed by at least one German engineer with over 20 years of solar experience. [143]

GE Power GE Power is a world leader in power generation with deep domain expertise to help customers deliver electricity from a wide spectrum of fuel sources. GE Power is transforming the electricity industry with the digital power plant, the world’s largest and most efficient gas turbine, full balance of plant, upgrade and service solutions, as well as their data-leveraging software. GE Power provides customers with a broad array of power generation, energy delivery, innovative technologies, and digital offerings to solve their challenges locally and help make power more affordable, reliable, accessible and sustainable. They work in all areas of the energy industry including renewable resources such as wind and solar, biogas and alternative fuels, coal, oil, natural gas and nuclear energy. Their presence in the Philippines can be seen on some of their projects: GE’s jet engine-based aeroderivative gas turbines which have the capability to burn both liquid fuel and natural gas used by Avion power plant, GE’s ecomagination approved Jenbacher gas engines that powered a biomass power plant in Batangas and installed the Philippines’ first biomass gasification in Pampanga, supplied of steam turbine and generators in Visayas and supplied one of the most technologically-advanced power infrastructures in the country and the customer’s largest integrated and fully-automated Gas Insulated Substation for PAGCOR. [144]