The Philippines to exceed National Renewable Energy Programme’s 2030 targets

President Duterte’s June 28 Executive Order brings additional impetus to the fast development of the Philippines’ renewable energy industry and could transform the Philippines into a regional green energy leader.

On June 28, President Duterte signed an Executive Order establishing the new Energy Investment Coordinating Council, an inter-agency tasked with simplifying and streamlining the approval process of energy projects in the Philippines.


Under the order, projects classified as “Energy Projects of National Significance” and whose capital investment represents a minimum of $69 million will see their approval process being shortened to a maximum of 30 days, post which they will be automatically approved. Prior to this new process, approvals could take up to 1,340 days with up to 359 signatures required and permits to be obtained from as many as 74 agencies.

The order comes as the Philippines’ energy sector is undergoing a rapid expansion since the implementation of the Renewable Energy Act of 2008 and the launch of the National Renewable Energy Programme (NREP) in 2011. These developments also echo the Philippines’ strong intended nationally determined contribution (INDC) submitted in October 2015 ahead of the Paris COP21, which targets a reduction of CO2 equivalent emissions by about 70% by 2030 from the 2006 levels.

In order to develop a robust renewable energy sector, the Philippines launched in 2008 an ambitious Renewable Energy Act which provides tax holiday for the first seven years of projects’ commercial operations, 10% corporate tax for the subsequent 10 years, duty-free import on machinery and no value-added tax (VAT). It also included a fixed, 20-years Feed-in Tariff (FiT) system regularly revised by the government, specified in the ERC Resolution No. 16 of 2010 and which came into effect in July 2012. It is estimated that between 2008 and 2016, the act resulted in the number of renewable energy projects going from 22 to over 400.

Programming green growth in the Philippines

Three years after its Renewable Energy Act, the Philippines launched its National Renewable Energy Programme (NREP) covering the 2011-2030 period and setting up capacity targets for hydropower, geothermal, wind, solar and biomass energy. The plan ambitions the exploitation of the Philippines’ renewable energy potential, which is estimated at 500MW for biomass, 4GW for geothermal, 10GW for hydro, 76.6GW for wind, 170GW for ocean power, and 5kWh/m2/day for solar.


The NREP notably ambitions to triple renewable energy production between 2010 and 2030 and reach an installed capacity of over 15GW. According to figures from the Philippines’ Department of Energy, renewable energy stood at 5,238MW in 2010 and had increased to 6,958MW in 2016. Renewable energy hence comes second in the country’s current energy mix, representing 32.5% and preceded by coal (34.6%). Oil and natural gas follow with respective shares of 16.9% and 16%.

The NREP notably includes the increase of geothermal capacity by 75% by 2027 and that of hydroelectricity by 160% by 2023 via the commissioning of additional 5,394MW of hydropower generation capacity. It also targets the commissioning of an additional 2,345MW of wind capacity by 2022 and of 284MW of solar capacity by 2030, along with the development of the country’s first ocean energy facility by 2018 and the commissioning of 70.5MW of ocean power capacity by 2025. The programme also includes the construction of a sea water pumped storage demonstration facility. Overall, an additional 9,956MW is targeted to be installed by 2030.

The sun shines on the Philippines

The Philippines’ solar industry, which saw solar PV systems introduced in the country’s rural electrification programme in the late 1980s, has been expanding very fast in recent months and its achievements are already far exceeding the targets set within the NREP. While the Philippines targeted the installation of 284MW of solar capacity by 2030, the country already has an installed solar portfolio of over 900MW out of total awarded capacities of 5,181.67MW as of June 2017. The jump is considerable given that the country installed its first grid-connected, 1MW solar PV farm only in 2008.

Amongst recent developments, First Toledo Solar Energy Corporation commissioned its 60MW Toledo solar project in July 2017, which received a $86.5 million partial funding from the Philippines’ Development Bank. The same month, Next Generation Power Technology Corp received regulatory nod by the Energy Regulatory Commission to operate its 18MW solar plant in Bataan’s Freeport Area in Mariveles. Both companies are part of Citicore Power Inc, which already has a solar portfolio of over 100MW in the country and is itself part of local infrastructure conglomerate Megawide.

In August 2017, PetroEnergy’s subsidiary PetroGreen Energy Corporation (PGEC) received environmental clearance for its second solar project, a 10MW solar PV plant in Puerto Princesa City in the island of Palawan, to be commissioned in 2018. The project is the company’s second after it commissioned its 50MW Tarlac solar farm in 2016.

The development of the sector is also leading to the establishment of solar value chain in the Philippines, with local manufacturer Solar Philippines beginning operations at the country’s first solar factory in Batangas in March 2017. The factory has an annual manufacturing capacity of solar panels of about 800MW, which it aims to expand to over 2,000MW.


The company is now actively promoting solar energy as a cheaper alternative to coal and using that argument to spearhead an ambitious plan of building solar parks with battery storage of up to 5GW as a replacement of planned coal-fed power plants in the country. Its 150MW solar plant in Concepcion, Tarlac, where construction started in April 2017, is expected to be the first one to deliver cheaper power than coal.

Winds of change in the Philippines

The development of the wind energy sector is probably the most ambitious under the NREDP, targeting a capacity addition of 2,345MW, 81% of which to be installed by 2020. The country already has a few achievements in the sector since the installation of its first 33MW find farm in 2005. Earlier this year, China’s Goldwind and Shanghai Electric Power Design Institute Co. secured a 132MW order for a wind farm in Pasuquin for instance.

According to the latest figures from the Philippines’ Department of Energy, wind projects with a potential of 2,381.50MW had been awarded as of June 2017, with 426.90MW of that capacity already installed. The same month, pending wind applications awaiting approval were totalling 80MW.

Tapping energy from the big blue

Under the NREP, the country’s first ocean energy facility is expected to be developed by 2018, paving the way for the commissioning of 70.5MW of ocean power capacity by 2025. As of June 2017, 26MW of ocean power capacity had already been awarded for development.

In this context, San Bernardino Ocean Power Co. received approval from the DoE in June 2017 for its $25 million, 1.5MW (3x500kW) tidal in-stream energy conversion project in the Capul Island, with generation expected to start in 2019. The project is developed as a joint venture between H&WB Asia Pacific (60%) and France’s Sabella SAS (40%) and shall have Northern Samar Electric Cooperative Inc. as off-taker. It shall be funded with an equity debt ratio of 30:70 and will rely on the Tidal In-Stream Energy Conversion (Tisec) technology. It will be South East Asia’s first tidal power project.

While the recent executive order of President Duterte signalled the Philippines’ maintained commitment to a robust and rapid expansion of its energy sector, the future of the sector is now being challenged by uncertainty over projects’ tariffs. Having one of the highest electricity costs in the region, the Philippines is now trying to end its FiT era to drive tariffs down. While consumer-oriented, the move will be a test for the country’s attractiveness to renewable energy investors as other regional neighbours like Vietnam are just starting to implement more attractive FiT-based systems.


The Philippines to exceed National Renewable Energy Programme

To discuss the latest renewable energy developments in the Philippines and ASEAN, join the ASEAN Energy Business Forum 2017 in Manila on September 27-29. For more information and registration visit www.aebf.leverageinternational.com


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