The Philippines is at the center of an important energy transition, moving from a heavy reliance on fossil fuels toward a more sustainable, resilient, and affordable energy system. This shift is not only a response to global climate goals but also a strategic decision that supports energy security, strengthens economic growth, and benefits communities across the country.
Guided by the Philippine energy plan, the government and industry leaders are working together to unlock the full potential of the country’s renewable resources. With coal still accounting for more than half of total generation, the task ahead is substantial. Yet, through policy reforms, investment incentives, and technological innovation, the country is creating the right conditions for renewable energy to thrive.
Energy transition strategies in the Philippines
The Department of Energy’s Philippine energy plan sets ambitious targets: renewables should contribute 35% of the generation mix by 2030 and 50% by 2040. These goals demand a combination of regulatory mechanisms, infrastructure investments, and private sector participation.
Several strategies are already in motion to accelerate the country’s clean energy shift.
1. Renewable Portfolio Standards and the Green Energy Auction Program
The Renewable Portfolio Standards (RPS) require distribution utilities to source a minimum percentage of their supply from renewable energy each year, ranging from 1% to 2.52%. This creates steady demand for renewable generation.
Complementing this, the Green Energy Auction Program (GEAP) provides a transparent bidding process for renewable capacity. Over the past few years, auctions attracted strong interest from developers across solar, wind, and hydropower technologies.
Auctions give investors and creditors long-term contracts that help reduce financial risk. Regulators benefit from a competitive and predictable path toward achieving energy targets. Communities also gain as projects are built closer to demand, creating local jobs and improving infrastructure.
2. Renewable energy investments with 100% foreign ownership
A major policy reform now allows up to 100% foreign ownership in renewable energy ventures. The reform covers geothermal, solar, wind, biomass, and ocean energy. The move opens opportunities for global developers to bring in much-needed capital and expertise.
In this action, ACEN sets itself apart by combining local project delivery with global partnerships. This well-rounded strategy guarantees adherence to regional laws while completing projects on a large scale.
3. Offshore wind development
According to the World Bank, the Philippines has one of the highest offshore wind potentials in Southeast Asia, with an estimated 178,000 megawatts of capacity identified in resource assessments.
The government has awarded service contracts in key coastal provinces, and environmental compliance processes for pre-development activities are now being streamlined. This reduces uncertainty for developers and accelerates timelines for construction.
What does this entail? Offshore wind represents large-scale projects with long-term revenue streams for investors. It also enhances energy security by diversifying the mix. For communities, it generates new employment opportunities in coastal development zones.
4. Smart and Green Grid Plan
Integrating renewable capacity requires an updated transmission network. The Smart and Green Grid Plan (SGGP) is designed to expand the grid, connect new renewable power plants, and deploy advanced digital technologies to improve efficiency and reliability.
The energy transition plan also introduces opportunities for third-party grid concessions, inviting private investment into transmission. Investors benefit from reduced curtailment risks and greater confidence in project viability. Regulators gain a more stable and predictable system, and communities experience more reliable access to electricity, even in remote areas.
5. Energy Virtual One-Stop Shop System (EVOSS)
Permitting has been a major bottleneck for energy projects. The Energy Virtual One-Stop Shop System (EVOSS), established under Republic Act 11234, addresses this by offering a digital platform for applications, tracking, and approvals.
EVOSS creates greater predictability, allowing projects to move forward faster. It also reduces administrative burdens. Additionally, renewable projects can be developed more quickly, bringing direct economic and environmental benefits.
6. Decarbonization of the transport sector
The energy transition extends beyond power generation into transport. The Comprehensive Roadmap for the Electric Vehicle (EV) Industry envisions a minimum 10% EV share by 2040 under a business-as-usual scenario, and up to 50% under a clean energy scenario. Infrastructure for charging stations and policies on sustainable fuels are also being developed.
This creates opportunities in EV infrastructure and renewable-backed mobility while contributing to national decarbonization goals. It also improves air quality and reduces reliance on imported fuel.
How ACEN supports the Philippine energy plan
ACEN is an active partner in the country’s clean energy transformation. Through our renewable energy projects in the Philippines, we demonstrate the ability to deliver large-scale renewable solutions while maintaining community engagement at the core. We also combine international expertise with a deep local presence, ensuring that benefits extend beyond power generation.
The country is moving decisively through its energy transition, driven by reforms, new investment frameworks, and a bold Philippine energy plan. From renewable auctions and foreign investment policies to offshore wind, smart grids, and EV integration, the foundations of a cleaner energy future are being laid.
ACEN stands ready to help realize this vision. Our commitment to innovation, sustainability, and inclusive growth sets us apart in a competitive market. By collaborating with investors, regulators, and communities, we are shaping a resilient energy system that benefits everyone.
References
- Department of Energy. (n.d.a). Electric vehicle data and information. Republic of the Philippines. https://legacy.doe.gov.ph/electric-vehicle-data-and-information
- Department of Energy. (n.d.b). Philippine Energy Plan. Republic of the Philippines. https://legacy.doe.gov.ph/pep
- Dressel, B., & Saguin, K. (2025, April 2). Challenges and prospects of the energy transition in the Philippines (Policy Brief). ANU Philippines Institute. https://philippinesinstitute.anu.edu.au/content-centre/research/challenges-and-prospects-energy-transition-philippines
- International Trade Administration. (2024, April 25). Philippines energy transition strategies. U.S. Department of Commerce. https://www.trade.gov/market-intelligence/philippines-energy-transition-strategies
- Power Philippines. (2025, September 1). Smart and Green Grid Plan to Modernize PH Power System by 2025. Power Philippines. https://powerphilippines.com/smart-and-green-grid-plan-to-modernize-ph-power-system-by-2025/
- Soqueño, I. (2024, June 17). Switching the Philippines to renewable energy – One business at a time. Climate Reality Project. https://www.climaterealityproject.org/blog/switching-philippines-renewable-energy-one-business-time
- Supreme Court of the Philippines. (n.d.). [Document related to EVOSS or an energy-sector law]. eLibrary Judiciary. https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/2/87060
- World Bank. (2022, April 25). A roadmap for offshore wind in the Philippines [Infographic]. World Bank. https://www.worldbank.org/en/news/infographic/2022/04/25/a-roadmap-for-offshore-wind-in-the-philippines
