Philippines: $433-billion power projects set to cut electricity rates

Manila: The Philippines is bracing for what could be the biggest clean energy investment “wave” in its history.

The aim: Cut local power rates, currently one of South-east Asia’s highest, by ramping up open markets.

It's a deliberate move. It's backed by a new policy push aimed at long-term stability as Manila tries to cut electricity charges for businesses and homes by harnessing renewables.

The government also hopes to plug decades of under-investment in energy, boosted by the new Public-Private Partnership Law (RA 11966, signed in December 2023), via so-called Green Energy Auctions (GEA), and the new Right-of-Way Law (ARROW Act, RA 12289), which cuts red tape and permitting snags, among other key reforms.

Energy Secretary Sharon Garin said the government expects up to ₱25 trillion ($433) in renewable energy investments over the next decade as it rolls out an aggressive 10-year Green Energy Auction (GEA) roadmap.

“If you think about it, last year (2025) ₱1.3 trillion went into renewable energy, and we’re talking about 10 years here,” Garin told reporters.

The Philippines’ Department of Energy (DOE) has set a goal of adding 25 gigawatts (GW) of new renewable capacity.

Despite recently terminating “idle” contracts equivalent to around 18,000 megawatts (MW), the DOE insists the country remains on track to hit its target of increasing renewables’ share in the power mix from the current 22 percent to 35 percent by 2030 — even beyond the term of Ferdinand Marcos Jr (which ends in 2028).

The GEA programme is a competitive bidding system where renewable energy developers offer electricity supply at fixed, transparent rates. 

Winning bidders secure long-term contracts. In turn, these contracts incentivise banks and investors to finance large-scale projects. 

The auctions are designed to ensure lower power prices, faster project delivery, and grid stability while accelerating the country’s clean energy transition.

Renewable Energy Management Bureau Director Marissa Cerezo outlined auction rounds through 2035 covering solar, wind, battery energy storage systems (BESS), geothermal, hydropower, biomass, and waste-to-energy.

Highlights include:

Initial auction deliveries (2027–2028) are expected to roll out over 3,200 MW of power production capacity, with another 5,565 MW coming online starting 2028.

Industry players including San Miguel, Aboitiz, CREC and Ayala’s ACEN are pushing hard for battery energy storage systems (BESS), which replace expensive coal-fired “peaker plants”.

The expansion helps stabilise supply as renewable energy (solar/wind) capacity grows, with BESS works like giant powerbanks that store excess power and release it during peak demand — critical for grid reliability.

“By preparing a clear, auction-backed pipeline, we are giving developers and financial institutions the market visibility they need to plan, mobilise capital and deliver projects on schedule,” Garin said.

With policy reforms in place, the Philippines is repositioning itself to usher in an energy “boom” which could redefine its power landscape for decades.

However, grid infrastructure and distribution to consumers via electric cooperatives face challenges. Gensets are common in Philippine provinces.

Frequent brownouts, blamed on aging infrastructure and old-school dangling wires, discourage businesses in remote provinces.

Moreover, despite the country's potential, billions are required to address grid congestion, transmission and power distribution snags, especially in areas outside Manila and Calabarzon.

Besides the high cost of electricity, energy regulators also need to tackle inefficiencies: frequent brownouts and chronically sub-par electricity distribution are major challenges, especially in areas served by electric coops.

Such decades-old inefficiencies discourage investments in the provinces, while forcing many local businesses and home owners to invest in fossil-fuelled gensets.

Rooftop solar, while still pricey, is becoming a more viable alternative.

Value of Approved Investments