Inside Philippine’s energy transition

MANILA, Philippines — A quick scroll through social media reveals a familiar scene: frustrated Filipinos posting photos of their soaring electricity bills.

Many are left wondering what exactly they’re paying for and why they’re paying more.

Two line items, in particular, have caught the attention of overburdened consumers – the feed-in tariff allowance and the green energy auction (GEA) allowance.

Both charges are meant to support the rollout of renewable energy (RE) projects, as the Philippines pursues its ambitious transition to cleaner power sources.

Few would argue against the need for cleaner energy. But as power charges continue to add up, an unavoidable question remains: how much should Filipinos be expected to pay for the country’s energy transition?

For the Department of Energy (DOE), the answer lies beyond consumers’ monthly bills.

Officials emphasized that scaling up renewables is not only about cutting carbon emissions, but also reducing the country’s reliance on imported fuel for power generation.

“Reducing import dependence requires a strategic pivot toward maximizing indigenous energy resources, particularly renewable energy and other locally available options,” Energy Secretary Sharon Garin said.

By doing so, she said, the country could limit its exposure to volatile global energy prices and strengthen supply security.

“For the Philippines, a country that has long depended on imported fuels, recent global disruptions have once again highlighted a fundamental reality: energy security is inseparable from national security,” Garin stressed.

The move has gained renewed urgency as the ongoing tensions in the Middle East have sent oil prices surging, putting pressure on other energy sources such as coal.

Having one of the most coal-dependent power grids in Southeast Asia, the Philippines relies heavily on coal imports from Indonesia.

Against this backdrop, going green is gaining traction as a more affordable and secure way to shield the Philippines from global energy shocks.

Rooftop solar shines

A recent Pulse Asia survey showed that 93 percent of Filipinos believe affordable rooftop solar is essential to meeting the country’s rising electricity demand.

The survey also found that a majority of Filipinos remain concerned about the current energy challenges, with six in 10 respondents identifying RE expansion as the most effective way to address them.

“These findings send a clear policy signal: Filipinos are not rejecting solar energy; they are asking for the conditions that would allow them to access it,” said Alberto Dalusung III, energy transition advisor at the Institute for Climate and Sustainable Cities.

“Rooftop solar can help consumers manage electricity costs, participate more actively in the energy system and strengthen national energy security by reducing dependence on imported fuels,” Dalusung said.

As more Filipinos embrace solar power, the Philippines emerged as China’s second-largest export market for solar panels, according to global energy think tank Ember.

In an analysis, Ember said China has exported more solar panels to the Philippines than to any country except the Netherlands, a key import hub for much of northwest Europe.

The Philippines also surpassed Pakistan as a key destination for Chinese exports, with solar panel shipments to Manila exceeding 4,000 megawatts (MW) in the first four months.

More RE auctions

Amid the urgent need to strengthen energy security, the DOE is preparing to launch another GEA round focused on solar projects, including rooftop, ground-mounted and floating solar technologies.

Expected to begin this year, the planned bidding aims to bring new solar capacity online between 2027 and 2029.

In addition, the DOE is conducting two other RE auctions this year, covering offshore wind and waste-to-energy projects.

These auctions support the government’s bold target of increasing the share of renewables in the power mix to 35 percent by 2030 and 50 percent by 2040. Currently, renewables account for only 25 percent.

With roughly five years remaining until 2030, the DOE is still confident that the Philippines is on track to meet its targets.

Energy transition moving slowly?

For the Energy Regulatory Commission (ERC), slow execution and grid constraints continue to pose challenges to the country’s energy transition.

“We are not on track at the pace we need to be, but we are accelerating,” ERC chairman and CEO Francis Saturnino Juan said in an interview, noting that the gap lies not in ambitions, but in turning those ambitions into reality.

“We’re coming from an era where the regulatory approvals took too long, the grid connections were not built and the market rules had not caught up with the technology,” Juan said.

Juan underscored that addressing the transmission bottleneck would have the biggest impact on the energy transition.

“We have projects that are ready, contracted and fully financed, sitting idle because the grid connection is not there,” he added.

Recently, the ERC approved implementing rules allowing entities other than the National Grid Corp. of the Philippines to finance and construct transmission assets needed for grid connection.

Under the new framework, qualified power producers may undertake developments identified by the DOE as associated transmission projects.

The rules likewise enable National Transmission Corp. to implement priority transmission projects directly or tap other government agencies to carry out construction on its behalf.

“That is the single most consequential regulatory intervention available to us because it removes the single largest structural impediment to connecting the renewable energy projects that are already in the pipeline,” Juan said.

If all systems and policies are in place, the ERC chief said a 35-percent RE share by 2030 could be within reach. “Not easily. But achievable.”

Case for nuclear energy

As the country gradually moves away from coal-fired power plants, a new question is emerging in the spotlight: can the Philippines rely on renewables alone?

Although a great source of clean power, renewables, particularly solar and wind, face challenges due to their intermittency. 

For instance, solar panels only produce electricity when the sun is shining, while wind turbines only operate when there is sufficient wind.

It is in this context that the case for nuclear energy is gaining renewed attention.

Experts say nuclear energy could complement renewables by providing a stable baseload electricity supply that runs continuously.

Unlike fossil fuel-fired power plants, nuclear reactors do not emit air pollution or carbon dioxide during electricity generation, according to the US Energy Information Administration.

Under the existing roadmap, the Philippines aims to bring at least 1,200 MW of commercially operational nuclear capacity online by 2032.

By June 2027, the DOE plans to conduct the country’s inaugural nuclear tender, with the winning bidder expected to secure a ready market for the project and potential access to state funding support.

Indeed, the Philippines is not short on energy targets.

The real challenge, however, lies in striking the right balance between affordability, energy security and sustainability, and in determining whether Filipinos can afford the price of getting there.