PHP 1.35 trillion investments push renewable energy growth

By Francis Allan L. Angelo

The Department of Energy (DOE) has welcomed a record-breaking PHP 1.35 trillion in approved investments this year, largely driven by the renewable energy sector, according to the Board of Investments (BOI).

The figure surpasses the PHP 1.26 trillion approved in 2022, with the energy sector contributing PHP 1.29 trillion or 95 percent of the total.

Energy Secretary Raphael P.M. Lotilla credited the surge in investments to the government’s policies under President Ferdinand Marcos Jr., particularly the lifting of foreign ownership restrictions on renewable energy projects and streamlining of the application process.

“The DOE is committed to work with the private sector and our partner agencies to ensure that these approved investments will ripen into beneficial and tangible energy infrastructure for our people,” Lotilla said.

The DOE highlighted the success of the Green Energy Auction Program (GEAP), which promotes competitive pricing and ensures project bankability with a 20-year offtake guarantee, encouraging further investments.

Banks and financial institutions have also played a key role in advancing renewable energy projects.

Lotilla emphasized DOE’s ongoing collaboration with the Bangko Sentral ng Pilipinas (BSP) to align financial support with the needs of energy developers.

“We are working closely with banks and financial institutions to effectively support these projects,” he added.

The growth of renewable energy investments follows the implementation of the Renewable Energy Act of 2008, which has led to over 1,327 renewable energy service contracts, with an installed capacity of 5.8 gigawatts as of March 2024.

Solar, hydro, and wind projects account for nearly 90 percent of the country’s renewable energy capacity.

To sustain momentum, the DOE plans to hold a third round of the Green Energy Auction this year, focusing on hydropower and geothermal technologies, while a fourth round will explore Integrated Renewable Energy and Energy Storage Systems (IRESS) and natural gas technologies.

The investments enjoy a range of incentives, including tax holidays, preferential tax rates, and zero value-added tax on capital imports, further boosting the sector’s growth trajectory.