Power generation mix in the Philippines
Fossil fuels such as coal, oil, and natural gas have been powering the Philippines for years, supplying about 80 percent of the country’s energy needs. The country is abundant with indigenous energy sources, particularly geothermal and biomass. However, they are not fully utilized due to a lack of financial investments. Instead, the energy mix is dominated primarily by coal imported mainly from Indonesia. In 2022, coal accounted for about 60 percent of the power generation mix; 18 percent was natural gas; 2.3 percent was oil-based; and the remaining consisted of renewable energy. Meanwhile, its oil refining capacity remained at 180,000 barrels per day since 2020 after the permanent closure of one refinery plant. Natural gas supply, primarily sourced domestically, is also facing supply depletion in 2024, forcing dependency on LNG imports. In addition, plans to revive the Bataan Nuclear Power Plant (BNPP) were raised to supplement energy supply. Despite foreseen challenges in energy security, the country aims to be energy self-sufficient in 2030.With its abundant renewable energy (RE) sources, the Philippines aims to transition to sustainable energy as it faces challenges in fossil fuel supply and volatile oil prices. Overall, the Philippines' RE sources had a total power generation capacity of about 8.3 thousand megawatts in 2022, making its electricity capacity at 26.4 percent. The country aims to increase capacity in the coming years by expanding its commercial renewable energy projects and easing foreign ownership limits to boost investment. Between 2009 and 2022, solar energy projects generated the highest share of investments, followed by wind projects.
Understanding the Philippines’ energy landscape
The Philippine electricity sector underwent privatization upon implementing the Electric Power Industry Reform Act 2001 (“EPIRA”). As a result, electricity generation, transmission, and distribution were transferred to the private sector to liberalize and unbundle the power sector and promote competition. The current electrification rate now stands at 96.2 percent.The electricity distribution system is composed of private investor-owned utilities, electric cooperatives, local government unit-owned utilities, and multipurpose cooperatives, all of which are allowed to sell and provide electricity within their franchise areas. The largest distribution franchise in the country is owned by the Manila Electric Company (Meralco), which provides electricity across Metro Manila as well as nearby provinces like Bulacan, Cavite, and Laguna.
