Philippines needs 20 GW in new renewables to meet clean energy target by 2040

The Philippines will need an additional 20 gigawatts (GW) of renewable energy (RE) capacity to meet its goal of sourcing half of its power supply from renewables, a gap that upcoming auctions are expected to help address.

“According to our projections, the Philippines will need roughly 20 GW to reach 50% (share) by 2040,” Energy Secretary Sharon S. Garin told reporters in mixed Filipino and English last week.

The Philippines, which currently relies on coal for power generation, is targeting to increase the share of RE in the national power mix to 35% by 2030, and eventually to 50% by 2040.

To move towards this goal, Ms. Garin said the country needs to deliver several rounds of green energy auction (GEA), a government program where renewable energy developers bid for contracts to supply electricity at the lowest possible price.

Since the first round of GEA was launched in 2022, the Department of Energy (DoE) has so far completed four auctions, which are expected to deliver more than 20 GW of capacity through 2035.

The previous auctions involved solar, onshore wind, biomass, geothermal, hydropower, and energy storage systems.

The DoE is also staging the country’s first competitive auction dedicated solely to offshore wind projects this year.

“We projected that we will need to do GEA for another 20 GW,” Ms. Garin said.

In February, the DoE unveiled its 10-year GEA plan that will offer at least 25 GW of additional RE capacity, which is estimated to require PHP 25 trillion worth of investments.

The upcoming auction rounds cover various technologies such as waste-to-energy, onshore wind, floating solar, rooftop solar, and battery energy storage systems, with project deliveries starting as early 2027 and running through 2035.

“By preparing a clear, auction-backed pipeline, we are giving developers and financial institutions the market visibility they need to plan, mobilize capital, and deliver projects on schedule,” Ms. Garin said.

Sought for comment, Jose M. Layug, an executive board member at the Philippine Energy Research & Policy Institute, said the Philippines is on track to hit its target through the auctions that are lined up.

“I believe the Philippines can hit its target through the GEAs provided that the government continues to be an enabler in developing the proposed projects and reduce bureaucracies in permitting process,” Mr. Layug told BusinessWorld.

He said that the goal can be hindered by “the long process of obtaining multiple permits from different National Government agencies and local government units.”

Mr. Layug said the Philippines should maximize its indigenous renewable energy resources to better manage energy demand amid the Middle East crisis that has disrupted global energy markets and exposed the vulnerability of fuel-importing countries.

“The recent crisis just reconfirmed the existing vulnerability of the Philippines in supply and price shocks as we are heavily dependent on imported fossil fuels,” he said. “We have known this for more than 20 years, but we have not aggressively transitioned away from this dependence.” — Sheldeen Joy Talavera, Reporter