Philippines Renewable Energy Profile

Table of Contents

Last updated Jul. 26, 2024.

I. Introduction

The Philippines has diverse sources of electricity from renewable energy such as hydropower, geothermal, solar, and, wind.1PEP 2023-2050. Despite a variety of electricity sources, the country has yet to realize the full potential for renewable energy, and rely on fossil fuels such as coal and gas for the majority of its electricity generation. 

The country’s electricity mix is dominated by fossil fuels–coal leading in both electricity generation (66.7 TWh) and installed capacity (12 GW).2Ember.

The Philippines has three electrical grids—for Luzon, the Visayas, and Mindanao, with the highest installed capacity and energy demand in Luzon. The distribution component of the Philippines’ electricity sector is fully privatized. Meralco, a major utility, holds 80% of the market and the remaining 20% comprises a few regional players and 100+ electric cooperatives.

With the country’s immense RE potential, the government must further augment its current capacity and grid technologies to aid in the growing demand while also achieving its climate commitments. 

II. Current Status of Renewable Energy

Installed capacity of major renewable sources (2022):

  • Hydropower – 3.04 GW
  • Other RE (Mainly Geothermal) – 1.9 GW
  • Solar – 1.63 GW
  • Wind – .44 GW

Electricity generation of major renewable sources (2022):

  • Hydropower – 9.08 TWh
  • Other RE (Mainly Geothermal) – 11.49 TWh
  • Solar – 1.58 TWh
  • Wind – 1.27 TWh

In 2022, major renewable energy sources generated a total of 23.42 TWh of electricity. This represents 20.72% of the country’s total demand of 113.01 TWh. To fully detach itself from fossil fuels in its power generation mix, the Philippines needs to further accelerate the development of renewable energy sources (RES).

The data gathered from Ember classifies Geothermal, Tidal, and Wave generation as Other Renewables generation.

  • Hydropower is the largest source of renewable energy electricity in the Philippines. In 2022, the country generated 9.08 TWh of electricity which was equivalent to 8.03% share in the country’s mix.3Ember.
  • Due to its geographic location, the Philippines has become a major producer in global geothermal energy. The installed capacity of geothermal plants was 1.9 GW in 2022.4IRENA.
  • Drastic price reductions and commitments to increase renewable energy capacity resulted in Solar energy becoming more prominent in the country’s electricity landscape. The last decade was crucial in the increase of solar capacity in the country. In 2022, the installed capacity of solar energy reached 1.6 GW which generated 1.4 TWh of electricity. 5Ember.
  • The total installed capacity of wind energy was .44 GW in 2022.6Ember. Harnessing the potential of wind energy especially in coastal areas of the Philippines where wind is more powerful, would increase the share of wind in the electricity mix.

III. Renewable Energy Potential

Similar to many Southeast Asian nations, the Philippines currently relies heavily on coal for electricity generation. Coal dominates the country’s energy mix, accounting for a significant share of 61.93%. To address this dependence on fossil fuels, the Philippines needs to significantly increase its utilization of renewable energy.

The Philippines has established strong renewable energy policy frameworks. The country’s Energy Plan estimates a total potential of 98 GW of electricity generation from existing renewable energy contracts.7PEP 2023-2050. This potential is substantial, and if fully realized, could have supplied more than 79% of the country’s electricity demand in 2023.

IV. Summary of Renewables Policies and Incentives

TYPE OF POLICYPHILIPPINES
REGULATORY POLICIESRenewable energy in INDC or NDC✔
Renewable energy targets✔
Feed-in tariff/auctions/premium payment✔
Net-metering/billing/direct consumption-supply✔
Biofuel blend obligation/mandate/target✔
Electric utility quota obligation/RPS✔
Tradable REC
Renewable heat obligation/mandate
FISCAL INCENTIVES AND PUBLIC FINANCINGTax incentives✔
Public investment/loans/grants/subsidies/rebates✔
Reductions in sales, CO2, VAT or taxes✔
Tendering✔
Investment or production tax credits✔
Energy production payment✔
Source: REN21 and ASEAN Centre for Energy (ACE) via JSTOR.

View comprehensive list of Renewables Policies here.

V. Summary of Identified Challenges

  • High FiT rates compared to other countries
  • The country’s FiT scheme did not lead to RE expansion
  • Slow execution of policies on implementing rules and regulations (IRRs) for example for Renewable Portfolio Standards and tradable green certificates.

View comprehensive list of identified challenges here.

VI. Future Outlook

  • In the year 2030, the Philippine government plans to increase the share of renewable energy in the electricity mix by 35%. Building on this progress, the government plans to increase the share of RE by 50% by 2040.8NREP 2020-2040.
  • The Philippines’ RE future will likely see a diversification of renewable energy sources. While geothermal energy will likely remain a significant player, a rise in solar, wind, and potentially even ocean energy projects is expected. This diversification strengthens energy security and grid stability by reducing reliance on any single source.9DOE.

VII. Conclusion

Despite boasting abundant renewable resources, the country still relies heavily on fossil fuels. However, a growing commitment to renewable energy is evident in ambitious government targets and evolving policies.

Continued reliance on fossil fuels presents challenges in the form of price volatility and environmental and health impacts. However, a clear path forward exists. By strategically transitioning to renewable energy sources, the Philippines can lead to benefits that pave the way for a sustainable and prosperous future.

A robust renewable energy sector offers several advantages. Firstly, it fosters environmental stewardship by mitigating greenhouse gas emissions and improving air quality. Secondly, it enhances energy security by reducing dependence on imported fossil fuels, thereby mitigating price fluctuations, freeing up funds for other social services. Finally, it stimulates economic growth by creating new job opportunities in manufacturing, installation, and research & development within the clean energy sector.

Furthermore, a strong commitment to renewable energy can attract foreign investments in renewable technologies and projects, further accelerating the shift towards 100% renewable energy systems and fostering innovation within the sector. 

In conclusion, embracing renewable energy is not just about generating clean electricity; it’s a strategic investment in the Philippines’ long-term future. By prioritizing a robust renewable energy sector, the nation can ensure a cleaner environment, secure its energy independence, and foster economic growth and prosperity.

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