Buyers' Toolkit

The Philippines has long suffered from high electricity prices, with an average residential electricity bill of 15.4 cents/kWh and an industrial bill of 11.4 cents/kWh in 2021, as compared to Indonesia, Malaysia, Thailand, and Singapore, where rates are limited to 10 cents/kWh or less, keeping many investors at bay. The Philippines' high electricity prices are a result of scarcity of resources and an underdeveloped electricity system. Therefore, the country is looking to energy transition to improve its fragile energy structure. Among the ASEAN-5 (Indonesia, Malaysia, the Philippines, Thailand, and Singapore), the Philippines has the most liberalized electricity market. Recent initiatives like the Retail Competition and Open Access (RCOA) and the Green Energy Option Program (GEOP) have allowed electricity consumers to formulate their energy plans based on their needs and access renewable energy from various sources. There are three methods for enterprises to achieve renewable energy goals in the Philippines: self-consumption, purchasing unbundled Renewable Energy Certificates (RECs), and signing physical Power Purchase Agreements (PPAs).

Despite the recent implementation of various renewable energy-related policies by the Philippine government, there are still unresolved issues with efficiency. The cumulative installed renewable energy capacity in recent years has failed expectations. As a result, it remains uncertain whether future supply of renewable energy can meet demand.

According to the Philippine Energy Plan 2020-2040 (PEP 2018-2040) published by the Department of Energy (DOE),  it is expected that the share of renewable energy in power generation will reach 35% by 2030 and 50% by 2040. These targets are complemented by policies such as the Renewable Portfolio Standard (RPS) and the Feed-in Tariff (FiT), which serve as the foundation for renewable energy supply.