The Philippines is removing another barrier to attracting investments in renewable energy by raising the minimum renewable energy (RE) capacity in the power supply mix to 2.52%. Previously, the sourcing requirement was set at 1% for both investors and end-users.
The nation has set an aggressive target of using 35% clean energy by 2030. As a result, the government has been updating the rules and regulations pertaining to RE, the most recent of which requires distribution utilities, electric cooperatives, and retail electricity providers to incorporate renewable energy sources into the mix of energy they provide to their customers. This change is reflected in the Department of Energy (DoE)’s Renewable Portfolio Standards (RPS), which will be implemented in 2023. RPS is a market-based policy that mandates suppliers to obtain or produce a predetermined portion of their energy from sources that qualify for RE.
Prior to the revamped RPS, in 2020 the government allowed full foreign ownership of large-scale geothermal projects through the Financial and Technical Assistance Agreements, as long as the minimum investment is USD 50 million. Recently, the DoE welcomed the Department of Justice’s (DoJ) view that RE investment is not subject to the Philippines’ foreign ownership restriction of a maximum of 40%, and the latter agency is currently preparing the necessary amendments to the Implementing Rules and Regulations (IRR) on the subject of foreign equity limitation of the Renewable Energy Act, as suggested by the DoJ.