SOLAR and wind energy projects will continue to drive the growth of Philippine renewable energy (RE) with additional capacity estimated at 6.8 gigawatts (GW) over the next 10 years, Fitch Solutions Country Risk and Industry Research estimated in a report.
In a Nov. 18 report, Fitch Solutions said wind and solar capacity is expected to grow 10.4% a year.
Fitch Solutions said in the non-hydropower RE segment, 86% will consist of photovoltaic projects and 10% onshore wind power.
The latest Department of Energy (DoE) estimates have RE accounting for 23.4% of the power generation mix.
The DoE said that in 2021, renewable generating facilities made up 28.9% of installed capacity.
While the DoE noted that hydropower and geothermal accounted for the most RE capacity, solar was the fastest-growing.
The Energy department has set a target of more than 900 megawatts (MW) in new RE capacity for the 2021-2027 period. Of these, solar accounted for 489 MW, hydro 233 MW; geothermal 116 MW; and biomass 65 MW.
Fitch Solutions estimates the number of non-hydro RE projects in the Philippines at 127, with combined capacity of 21.4 GW. Of these projects, 78 are solar.
In June 2021, the DoE conducted the first round of the Green Energy Auction Program (GEAP) in which 2,000 MW was committed for delivery between 2023 and 2025.
The second round of the GEAP is expected to be conducted in June.
Last week, the DoE opened up the RE industry to full foreign ownership, after amending the implementing rules and regulations of the Renewable Energy Act of 2008.
“We expect the government to go through with its policy of allowing foreign companies full ownership of renewable power projects, attracting more foreign investment for the development of the sector,” Fitch Solutions said.
Fitch Solutions added that the decision to lift restrictions on foreign ownership in RE will also intensify competition and will provide the needed capital to improve the energy sector.
“By promoting competition in the power sector, domestic companies will face increasing pressure to innovate and adapt to compete with international peers. We believe this is part of the government’s plan to accelerate the privatization of the power market,” Fitch Solutions said. — Ashley Erika O. Jose