Policy Must Power Our Green Energy Shift

The announcement of Meralco PowerGen’s Terra Solar project, poised to be the world’t largest solar and battery facility, is a landmark moment for the Philippines. It is a powerful, private sector-led statement of intent.

Yet, as the company’s own leadership admits, the enormous cost of energy storage remains the primary bottleneck in our nation’s urgent transition to renewable energy. While such pioneering projects are commendable, they cannot single-handedly power our future. The government must now match this private sector ambition by aggressively reforming policy and creating targeted incentives to make energy storage financially viable on a national scale.

The central challenge, as MGEN CEO Emmanuel Rubio correctly identifies, is the intermittent nature of renewables. The sun doesn’t always shine, nor the wind always blow. This makes large-scale battery systems – technically known as Battery Energy Storage Systems (BESS) – not just an accessory but a necessity for a stable, 24/7 clean energy supply. The problem is cost. Without robust storage, we remain tethered to fossil fuels, a dependency that has long saddled Filipinos with some of the highest electricity prices in Southeast Asia. The promise of cheaper, cleaner energy will remain just out of reach if we treat storage as a future problem instead of a present priority.

This is not a new national ambition. The Renewable Energy Act of 2008 was passed with the precise goal of accelerating our shift to sustainable sources. More than a decade later, however, the reality falls short of the vision. The Department of Energy’s own Philippine Energy Plan targets a 35% renewable energy share in our power mix by 2030 and 50% by 2040. Yet, as of 2024, renewable energy accounts for a mere 22% of our energy pie, while coal continues to dominate at nearly 60%. This glaring gap between our goals and our reality is the direct result of a market and policy environment that has not kept pace with technology.

Some might argue that the government should take a hands-off approach and let the market dictate the pace of adoption. This view, however, ignores the immense upfront capital required for utility-scale battery projects, a hurdle that private investment alone cannot overcome without a clear, supportive regulatory framework. We need policies that de-risk these crucial investments. As Alberto Dalusong III, an energy transition advisor for the Institute for Climate and Sustainable Cities, recently noted, while the private sector is the main engine for growth, the government’s role is to create the conditions for that engine to run smoothly. “The private sector must invest and must deliver energy,” Dalusong stated, highlighting the symbiotic relationship required.

Therefore, the path forward is clear. The Terra Solar project should be viewed not as the finish line, but as the starting gun. The Department of Energy and Congress must move with urgency to create a national policy framework specifically for energy storage. This includes offering fiscal incentives, streamlining the notoriously complex permitting processes, and investing in grid modernization to accommodate more renewables. Relying on a handful of pioneering companies is not a strategy; it is a gamble. A firm, fair, and forward-looking national policy is the only way to ensure our green energy transition doesn’t just start with a spark but powers the entire nation for generations to come.