Flexible financing, grid expansion seen key to boosting PHL renewable energy

By Sheldeen Joy Talavera, Reporter

ALLOWING flexible financing schemes and expanding grid infrastructure can turn gigawatts of potential capacity into operational projects delivering clean electricity to the grid, according to international environmental law charity ClientEarth.

“A total of 1,366 renewable energy service contracts have been issued with a potential capacity of 139.84 gigawatts. This potential needs to be translated into actual projects injecting clean energy into the grid,” Tim Guanzon, acting associate director for Japan and Southeast Asia at ClientEarth, said in an e-mail interview with BusinessWorld.

With a current share of 25%, the Philippines aims to increase renewable energy in the national power mix to 35% by 2030 and 50% by 2040.

While the country has made strides in raising renewable energy share, key reforms are still needed, including flexible financing for evolving energy markets, strong enforcement of distribution utilities’ obligations on renewable energy, grid expansion, and incentives for energy storage systems.

At present, domestic financing for power generation projects requires guaranteed offtake, which limits growth.

Ms. Guanzon said financial institutions must be more flexible to support merchant plants, as customers now have greater choice through mechanisms such as retail competition, the green energy option program, or own-use rooftop solar.

On the part of power distributors, she said the government should monitor compliance with the Renewable Portfolio Standards (RPS) to ensure the country can achieve its renewable energy goals.

RPS is a mechanism that requires distribution utilities to source a portion of their energy supply from eligible renewable energy sources.

Ms. Guanzon said the country’s grid should be upgraded to allow the seamless entry of additional renewable energy capacity.

“Expanding and upgrading grid infrastructure and providing for updated and publicly available information on grid availability and access for faster connection and deployment of renewables,” she said.

To improve the reliable and stable delivery of electricity, she said policies and regulations should incentivize the buildout of energy storage systems as renewable energy penetration deepens.

Citing a 2025 report by the Climate Council, Ms. Guanzon said countries with the highest renewable energy share have stable and transparent regulatory regimes for investors, investment in grid infrastructure, and a significant buildout of solar photovoltaic and energy storage.