The country’s renewable energy has accounted for 22% of the energy mix as of 2022.
The Philippines is faring well in achieving its goal to ramp up the share of renewable energy (RE) in its generation mix, but could be “more aggressive” in its targets, according to a climate and clean energy expert.It must be pointed out that the Philippines is abundant in resources and would do well to drive policies that further encourage investors, particularly from the “vibrant” private sector, said Ramnath Iyer, the research lead on Climate & Renewable Energy Finance for Asia at the Institute for Energy Economics and Financial Analysis (IEEFA).
Iyer said the Philippine government has taken significant steps to drive its goal to reach 35% renewable energy share by 2030 and 50% by 2040 with policies that include active participation in the Green Energy Auction Programme (GEAP).
“The Philippines is on track, for now,” Iyer said. “The Philippines is doing pretty well because the policies are being implemented.”
“There are no restrictions on foreign ownership, which means that the sector is open for investment… These kinds of policies, the fact that investors can own the companies, are very positive for investments,” he added.
In the Bloomberg New Energy Finance (BNEF) Climatescope 2023 report, the Philippines was ranked fourth amongst the most attractive emerging markets for renewable energy due to its auctions, feed-in tariffs, net-metering schemes and tax incentives.
The report also noted that the Philippines has awarded 3.4 gigawatts (GW) of renewable energy capacity out of the 11.6 GW offered in its second green energy auction, of which 1.2 GW are scheduled for 2024 to 2045 for ground-mounted and rooftop solar as well as onshore wind power, whilst 2.2 GW are expected by 2026. The country’s installed renewables capacity currently accounts for 18% of the total.
Due to limited restrictions on foreign ownership, the investment in clean energy saw a significant 41% year-on-year increase to $1.34b (P74.57b), according to BNEF.
However, Iyer said that whilst the Philippines is on track for its targets, the country would still have to accelerate the pace of RE adoption and ensure better performance annually. Considering that the country has abundant resources in offshore wind, solar, geothermal, and hydro, its targets do not seem to be the “most aggressive,” he said.
“Given the entire range and the diversity of renewable resources available for the Philippines, it really can be pushing the envelope further and going for a more aggressive phase-out of fossil fuels and thereby improving their energy security, because a lot of these fossil fuels are imported,” he said.
“So in some ways, the programme is not ambitious enough, and could be more ambitious,” he added.
Marko Lackovic, managing director and partner at Boston Consulting Group (BCG), said the share of renewable energy generation currently stands at 22%, based on data from the Philippines’ Department of Energy.
Despite this, there is still a reason to be “optimistic in the short to medium term” citing the increase in renewable portfolio standard to 2.52% in 2023 across distribution utilities, retail electricity suppliers, and generation companies, as well as the foreign ownership allowed for renewable energy projects.
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