DOE: Renewable Energy Shift to Cut Power Costs Long Term

By Joseph Bernard A. Marzan

TAGUIG CITY — The Department of Energy (DOE) emphasized Wednesday that its push for renewable energy (RE) will reduce electricity prices in the long term.

DOE Undersecretary Rowena Cristina Guevara cited “unprecedented momentum” in RE investments, with 1,392 service contracts awarded as of April.

These contracts represent a total potential capacity of 152 gigawatts (GW), complementing the country’s current 27 GW of RE.

About 65 percent of the 152 GW is from wind energy, primarily offshore, while 25 percent comes from solar.

Guevara attributed the growth to Department Circular No. 2022-11-0034, which amended the Implementing Rules and Regulations of the Renewable Energy Act of 2008.

The amendment allowed full foreign ownership in the exploration, development, and utilization of RE resources.

Under the Philippine Energy Plan, the government targets 35 percent RE in the power generation mix by 2030 and 50 percent by 2040.

Guevara also highlighted the Green Energy Auction Program (GEAP), a competitive bidding mechanism offering RE supply at fixed, incentivized rates.

“Mechanisms such as the Green Energy Auction Program ensure that we procure RE at competitive prices—lowering electricity rates, encouraging new players, and ensuring a more level playing field,” she said during a media forum in Taguig.

She shared projections from the Independent Electricity Market Operator of the Philippines (IEMOP) on spot market price reductions by 2050, assuming all GEAP projects are implemented and renewables are prioritized:

• Luzon: PHP0.28 per kilowatt hour (kWh) in 2050 from PHP4.95/kWh in 2026
• Visayas: PHP0.48/kWh in 2050 from PHP5.28/kWh in 2026
• Mindanao: PHP0.36/kWh in 2050 from PHP4.06/kWh in 2026

“We’re focused on ensuring that the transition delivers on its promise of affordability, reliability, and energy security,” Guevara said.

“Renewables have no fuel costs. That means less exposure to price shocks from global oil and gas markets.”

“With every solar or wind project we bring online, we reduce our dependence on imported fossil fuels, making our energy system more resilient,” she added.

Bloomberg New Energy Finance (BNEF) ranked the Philippines as the second most attractive emerging market for RE investment in 2024.

Institute for Climate and Sustainable Cities (ICSC) Executive Director Angelo Kairos dela Cruz echoed Guevara, citing policy clarity and technical capacity as key investment drivers.

“Everyone is ready to make the jump, but wanting to jump can be hard, and you need a push,” he said.

“For businesses, derisking instruments and tempering interest rates are crucial, and the DOE is already making strides in laying these out,” dela Cruz added.