Limited transmission capacity, the absence of a national net zero pledge and costly financing are holding back the Philippines’ transition to a low-carbon economy, industry and academic experts said.
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Speaking at the Net Zero Carbon Alliance conference on 15 September, they called for coordinated planning across power infrastructure, government policy, and expanded access to affordable financing to accelerate the Philippines’ path to decarbonisation.
Jerome Cainglet, President and Chief Operating Officer of Energy Development Corporation, identified transmission as the most immediate constraint on renewable energy expansion.
“What I see is the most crucial right now is transmission, which affects existing renewable energy and the development of new ones ,” he told an audience of about 500 government and corporate representatives.
Cainglet said geothermal plants in the province of Leyte sometimes cannot operate at full capacity because the grid cannot accommodate their electricity output, forcing the company to waste steam that could otherwise generate power.
Transmission constraints are also preventing the development of around 600 megawatts (MW) of potential wind projects in Ilocos Norte and another 150 MW in Guimaras, he said.
For geothermal developers, connecting plants to the grid can require building transmission lines stretching tens of kilometres, adding costs that can undermine project viability. Cainglet called for advance planning to ensure transmission infrastructure and protocols for managing grid disturbances keep pace with the growing share of renewable energy.
(Second from left) Jerome Cainglet, President and Chief Operating Officer of Energy Development Corporation, Raymond Tan, a Professor of Chemical Engineering at De La Salle University. Oliver Chan, executive Vice President and Chief Sustainability Officer of Arthaland Corporation, and Michael Williamson, Chief of the Energy section at the United Nations Economic and Social Commission for Asia and the Pacific speak at a panel titled The C-Suite for Net Zero: Leading the Low-Carbon Imperative at the Net Zero Carbon Alliance conference. Image: EDC
The National Grid Corporation of the Philippines (NGCP) is pursuing upgrades to its network. In September, it said it was targeting the completion of six projects worth P23.5 billion (US$374 million) this year, including the P3.6-billion (US$57 million) Panay-Guimaras 138-kilovolt interconnection and substation upgrades in northern Luzon. It also reported completing five transmission projects worth roughly P7.2 (US$114 million)billion earlier in the year.
Alongside network expansion, NGCP is investing in power quality. In May, the Energy Regulatory Commission approved its proposed P2.79 billion (US$44 million) Laoag power quality improvement project, designed to manage voltage fluctuations as more wind and solar facilities connect to the Ilocos Norte grid.
Beyond infrastructure, the transition needs a shared policy direction, said Raymond Tan, a Professor of Chemical Engineering at De La Salle University.
“A national pledge will serve two important things. One is it signals a multi-administration ambition for the country,” Tan said in the panel.
A target extending to 2050, 2060 or 2070 would commit successive presidential administrations to a common goal, encouraging long-term planning rather than shifts in direction, he added.
The Philippines submitted its updated climate pledge to the United Nations on 8 September, retaining its target to reduce and avoid 75 per cent of projected greenhouse gas emissions by 2030, but without setting a net zero target. Climate experts have previously said the government favours an evidence-based approach to climate planning, rather than committing to net zero before establishing how it could be achieved.
The country nevertheless already has elements of a transition strategy. Tan pointed to the Department of Energy’s clean energy scenario as one building block. Under the Philippine Energy Plan 2023–2050, the scenario targets a renewable energy share in power generation of 35 per cent by 2030, 50 per cent by 2040 and more than 50 per cent by 2050.
The country’s greenhouse gas inventory identifies energy, including transport and fuel use, as its largest source of emissions in 2020. According to its climate commitment implementation plan, accelerating renewable energy deployment and improving energy efficiency could cut cumulative emissions by approximately 990 million tonnes of carbon dioxide equivalent between 2020 and 2030. These reductions, however, would not be sufficient to bring the country to net zero.
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What needs to be done is to create a policy framework where the actions and decisions of companies are synchronised to enable national ambitions to be achieved.
Raymond Tan, Professor of Chemical Engineering, De La Salle University
Tan argued that a national pledge would help coordinate these efforts. Describing its second purpose, he likened the pledge to “the conductor of an orchestra”, aligning decisions across sectors with the same national ambition.
“What needs to be done is to create a policy framework where the actions and decisions of companies are synchronised to enable national ambitions to be achieved,” he said.
Electric vehicles illustrate the need for that coordination, Tan added. Their adoption should advance alongside cleaner electricity generation, rather than leave them reliant on coal-fired power.
Cleaner power alone, however, would not address all emissions in the real estate sector, said Oliver Chan, executive Vice President and Chief Sustainability Officer of Arthaland Corporation. Developers must also tackle the carbon embodied in construction materials.
“People always talk about using renewable energy, but that’s for operations,” Chan said. “But in the built environment, the biggest contributor is the materials that you use, which is mostly cement and steel.”
He cautioned against treating renewable electricity procurement as sufficient evidence of sustainability, saying developers must also address emissions associated with building materials. Chan highlighted the need to explore alternatives such as bamboo to reduce reliance on carbon-intensive cement and steel.
Financing and workforce capacity will be critical to putting these changes into practice, said Michael Williamson, Chief of the Energy section at the United Nations Economic and Social Commission for Asia and the Pacific.
“We have no shortage of good technologies and good ideas,” he said, but companies face competing demands for the capital needed to implement them.
Renewable energy and energy efficiency projects require substantial upfront investment, making the cost of financing particularly consequential. Williamson suggested that lower-interest or zero-interest loans for specific activities could help accelerate deployment.
He also urged forward-looking workforce planning, including training young Filipinos and reskilling existing workers for emerging technologies.
Without preparation, he warned, rapid industry expansion could outpace the supply of specialised workers, limiting opportunities for Filipinos to benefit from the transition.
