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BMI, a division of Fitch Solutions, claimed that the Philippine government’s recent initiatives have boosted the renewable energy (RE) industry, which can aid the nation in achieving energy security.

Strong government backing, according to BMI’s industry trend analysis, has led to a rise in renewable energy project approvals over the past three months across the nation.

In its second Green Energy Auction (GEA-2) Programme this year, the Department of Energy (DOE) will be more aggressive, putting 11,160 megawatts (MW) of renewable energy up for auction through 2026 as opposed to 2,000 MW in 2022.

The BMI reported that 118 organizations, including subsidiaries of significant domestic energy giants like First Gen and Aboitiz, submitted 339 offers for GEA-2.

“On May 18, 2023, the DOE published the offshore wind implementing guidelines, giving the sector policy clarification regarding the procedures needed to establish an offshore wind power project. This follows Executive Order No. 21 issued by President (Ferdinand) Marcos (Jr.), which instructed the DOE to expedite the issuance of offshore wind permits, licenses, and certifications in April 2023. This mandated that the DOE establish administrative and policy procedures within 60 days of the directive,” it stated.

The research division of Fitch is hopeful that this result may lead to the government approving more offshore wind energy projects.

The DOE had authorized 65 offshore wind projects with a combined capacity of 51.2 gigawatts as of last month.

Since the government permitted 100% foreign ownership for renewables last year, the Danish business Copenhagen Infrastructure New Markets Fund (CINMF) was the first to announce that it will be carrying out its projects here in full ownership.

As projects are still in the early phases of development, BMI continued, “We expect momentum to pick up for offshore wind development, but we currently note that the emergence of the sector continues to be an upside risk.”

Additionally in May 2023, the DOE gave SunAsia Energy and Blueleaf Energy six contracts for floating solar projects with a combined capacity of 610.5 MW.

As of May, the DOE had already awarded 237 solar power contracts, with 21.5 GW still in the works and 1.3 GW already installed. The total amount invested in these projects was PHP8.46 billion.

Solar would be the leading non-hydropower renewable source in the Philippines from 2022 to 2032, followed by geothermal, onshore wind, biomass, and garbage, according to BMI.

The research arm stated, “We believe that these policy developments are reflective of the Philippines’ growing commitment to the renewables sector, in addition to the sector’s openness to 100% foreign ownership.

While the nation’s capacity for producing electricity is growing, transmission and distribution to consumers are still difficult to manage in the local power industry, according to the Fitch Solutions firm.

“In order for new power projects to be integrated into the grid, the transmission network must grow concurrently with changes in the market. We draw attention to the Philippines’ efforts to broaden the network, which will reduce these negative risks, according to BMI.

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