Philippines Power Market

Philippines Power Market Analysis

The Philippines Power Market size in terms of installed base is expected to grow from 29.61 gigawatt in 2025 to 35.52 gigawatt by 2030, at a CAGR of 3.70% during the forecast period (2025-2030).

• Over the medium, there is a growing demand for electricity due to rapid industrialization, urbanization, and population growth. Additionally, there is a strong push towards renewable energy to reduce carbon emissions and reliance on imported fossil fuels.
• On the other hand, the power market faces several challenges due to high electricity costs and aging infrastructures in the country.
• Nevertheless, the government and private sector are investing in renewable energy projects, such as solar and wind farms, to diversify the energy mix and reduce dependence on fossil fuels. This transition aims to lower electricity costs in the long run.

Philippines Power Market Trends

Renewables Segment to Witness Significant Growth

• The Philippines is a tropical country consisting of thousands of islands in the Pacific Ocean. The country has abundant renewable energy resources and limited availability of fossil fuels, which is not reflected in the current energy use patterns. The bulk of electricity generated in the country comes from coal-fired power plants.
• As the Philippines shifts from traditional fossil fuels to renewable energy, its power generation EPC (Engineering, Procurement, and Construction) market is on the brink of substantial growth. The country's heightened focus on renewable projects, especially in wind, solar, and hydropower, is set to drive this EPC market expansion. This surge is fueled by the demand for specialized EPC services adept at navigating renewable projects' complexities and technological nuances, ensuring timely delivery, budget adherence, and compliance with rigorous environmental standards.
• As the Department of Energy (Philippines) reported, renewable energy power plants in the Philippines boasted a total installed capacity of 8,417 megawatts in 2023. Of this, nearly 4,000 megawatts were sourced from hydropower. In contrast, that year, geothermal energy, leading in power generation capacity, accounted for an installed capacity of 1,952 megawatts. The significant contribution of hydropower and geothermal energy highlights the country's commitment to diversifying its energy mix and reducing reliance on fossil fuels. This trend is expected to continue, driven by government policies and investments in renewable energy infrastructure.
• Moreover, in 2023, the installed capacity of renewable energy power plants had a totaled 8,417 megawatts, of which around 4,000 MW were, geothermal energy led in terms of individual capacity, with 1,952 MW installed. Other sources like wind and solar also added to the renewable capacity. This highlights the growing role of renewable energy in the energy mix.
• The percentage of power capacity derived from renewable energy sources increased to 26.6% in 2023 from 25.8% in 2022. By each year, this increase of 0.8 percentage points. The slight increase reflects ongoing investments in renewable energy infrastructure, particularly in hydropower and geothermal sectors.
• In 2024, Clime Capital announced on an investment of up to $10 million in Upgrade Energy Philippines (UGEP) through the South East Clean Energy Fund II (SEACEF II). This funding aims to support UGEP in accelerating the deployment of solar energy infrastructure, including commercial, industrial, and utility-scale projects12. UGEP is set to surpass 50 MWp of cumulative installed solar capacity by the end of the year. This investment aligns with the Philippines’ renewable energy targets of 35% by 2030 and 50% by 2040.
• Overall, the renewable segment is expected to witness significant growth during the forecast period in the nation due to the abundance of renewable energy potential coupled with high energy demand.

Increasing Investments In Renewable Energy Generation

• The Philippines has seen a significant increase in investments in renewable energy projects. This surge is driven by the government's commitment to reducing carbon emissions and promoting sustainable energy sources. The country aims to enhance its energy security and reduce dependence on fossil fuels by expanding its renewable energy capacity.
• For instance, in March 2024, the Organisation for Economic Co-operation and Development (OECD) and the Department of Energy (DOE) unveiled the Clean Energy Finance and Investment Roadmap for the Philippines. This roadmap offers policy recommendations to propel the nation toward its clean energy objectives. With an investment of USD 337 billion, the Philippines aims to secure a 50-percent share of renewables in its power mix, alongside a 24-percent energy savings target across the economy.
• The Philippines comprehensively opened its renewable energy sector to foreign ownership through Circular No. 2022-11-0034, representing a significant shift to its energy policies. The Philippine government expects that permitting foreign ownership of renewable energy projects will increase the speed of the Philippines’ transition to renewable energy sources. With the shift, foreign investors can currently hold 100 % equity in the exploration, development, and utilization of solar, wind, hydro, and ocean or tidal energy resources. The policy transformation comes as the Philippines aspires to attract foreign investment to boost its renewable energy sector and meet its long-term climate targets.
• In 2023, the Philippines saw a slight uptick in its electricity capacity share from renewable sources, reaching approximately 26.6 percent, as reported by the International Renewable Energy Agency (IRENA). Since 2014, the share of renewable energy in the country's electricity capacity has experienced fluctuations, peaking in 2015.
• The Philippines has emerged as one of the significant destinations for wind energy developers in the Southeast Asian region and has attracted significant investments from several wind energy project developers in recent years. For instance, in March 2024, Mainstream Renewable Power signed two Wind Energy Service Contracts (WESC) with the Department of Energy (DOE) in the Philippines for the development rights for two onshore wind farms with a combined capacity of 440 MW. The contracts represent Mainstream’s first fully-owned WESCs in the Philippines, and it is one of the first 100% foreign-owned companies to secure the contracts.
• In October 2023, Vena Energy and Vivant Energy Corporation announced the signing of a collaborative agreement with Aboitiz Renewables Inc. for the development, construction, and operation of a 206 MW San Isidro Wind Project in San Isidro, Northern Samar, in the Visayas Province. The Project will feature 33 wind turbine generators with a capacity of 6.25 MW each, establishing it as one of the largest onshore wind projects in the Philippines. The San Isidro Wind Project is slated to reach commercial operation in the first quarter of 2025.
• Overall, theincreasing investments in renewable energy generation is expected to drive the Philippines power market during the forecast period.

Philippines Power Industry Overview

The Philippines power market is semi-consolidated. The major companies include San Miguel Corporation, AboitizPower Company, First Gen Corporation, Power Sector Assets and Liabilities Management Corp. (PSALM), ACEN CORPORATION (ACEN), and others.

Philippines Power Market Leaders

Philippines Power Market News

• July 2024: A subsidiary of SM Investments, Philippines Geothermal prodution company Incorporation (PGPC), internds to explore new geothermal enrgy sources in Luzon, with the goal of producing and extra 400 MW of sustainable energy. The region of Kalinga, Benguet, Cagayan, Camarines Norte, and Camarines Sur will see the development. These projectt, which should be finished in 2025, will help reach the atrget of 50% renewable energy by 2040.
• March 2024: Mainstream Renewable Power signed two Wind Energy Service Contracts (WESC) with the Department of Energy (DOE) in the Philippines for the development rights for two onshore wind farms with a combined capacity of 440 MW. The contracts represent Mainstream’s first fully-owned WESCs in the Philippines, and it is one of the first 100% foreign-owned companies to secure the contracts.