Philippinen’s latest crackdown on non-performing renewable energy contracts is a signal to investors that the country is serious about the execution and achievement of its climate targets, according to clean energy observers.
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Department of Energy (DOE) secretary Sharon Garin announced in a briefing that the agency has terminated and relinquished 163 renewable energy service contracts from 2024 to 2025 due to developers’ failure to meet their obligations. The cancelled contracts represent a combined potential capacity of 17,904.02 megawatts (MW).
Garin later said some prospective investors secure renewable energy project contracts with no intention of developing them, adding that they simply hold the rights, waiting to flip them to another buyer at a premium.
The energy chief said civil, criminal or administrative charges will be filed against noncompliant developers.
The move has been welcomed by clean energy observers, including Pocholo Enriquez, energy programme lead of The Climate Reality Project Philippines, who believes the DOE is signalling to investors that renewable energy contracts are meant to be built and connected to the grid by terminating contracts that are not progressing.
“It shows that the Philippines is prioritising actual delivery over paper capacity. Essentially, this translates to ensuring renewable energy targets become real projects that support energy security and emissions reductions,” Enriquez told Eco-Business.
“When non-performing contracts are terminated, grid capacity and project sites are freed up for developers with the technical and financial capability to deliver. Clear enforcement also reduces uncertainty, which is essential for long-term, capital-intensive renewable energy investments.”
Despite the terminated contracts, the Philippines has already secured 120 gigawatts (GW) worth of committed and indicative renewable energy, driven by green auctions and foreign ownership rules.
The Southeast Asian nation leads its neighbours in its committed pipeline, as Vietnam trails with a 73 GW target and Thailand with planned projects worth 5GW.
In recent years, the Philippines, alongside Vietnam, has held the region’s largest renewable energy portfolio, holding over 185 GW or 80 per cent of the region’s announced, pre-construction, and construction-stage utility-scale wind and solar capacity.
The Philippines has pledged to sharply expand the share of renewable energy in its power mix, targeting at least 35 per cent by 2030 and 50 per cent by 2040, under its National Renewable Energy Programme, even as it continues to invest in new gas infrastructure to shore up near-term energy supply.
