By Sheldeen Joy Talavera, Reporter
THE GOVERNMENT should implement rigorous screening of energy players searching for to take a position within the country’s renewable energy (RE) market to make sure project delivery, analysts said, following the mass cancellation of several contracts that failed to satisfy development timelines.
“These incidents may be avoided in the long run if energy authorities will strengthen due diligence and evaluation of energy firms, and ensure fair competition throughout the renewable energy market,” Riedo “Rei” Panaligan, president of the Center for Renewable Energy and Sustainable Technology, said in an e-mail interview with BusinessWorld.
Terminated and relinquished contracts over the past two years totaled 163, reminiscent of nearly 18 gigawatts (GW) of potential capability, in keeping with the Department of Energy (DoE). These contracts encompass solar, hydropower, wind, geothermal, and biomass projects.
Solar Philippines Power Project Holdings, Inc., founded by businessman-turned-politician Leandro L. Leviste, accounted for 64% of the terminated contracts, representing greater than 11 GW, in keeping with the DoE.
Mr. Panaligan said the DoE should base the variety of awarded energy contracts on an organization’s track record and its ability to deliver projects on schedule.
“Economic growth was disrupted as a consequence of failure of those firms to deliver their committed power plants as scheduled,” he said.
While losing gigawatts of potential capability could seem a setback, analysts said the cancellations signal the federal government’s push for greater accountability.
“The cancellations are best understood as pipeline rationalization, not a retreat from renewable ambition. Stronger enforcement on the service-contract stage, paired with higher transmission planning, is crucial to meeting the Philippines’ clean energy goals credibly,” Isabella Suarez, engagement analyst at TransitionZero, told BusinessWorld via e-mail.
Ms. Suarez added that consistent enforcement improves investor confidence over the medium term, reducing uncertainty and discouraging “speculative capability hoarding.”
Noel M. Baga, co-convenor of the think tank Center for Energy Research and Policy, said the DoE’s actions “strengthen investor confidence by demonstrating that accountability applies equally to all parties, no matter size or political connections.”
“The Philippines needs legitimate energy developers with proven capability to expand our supply, which is prime to achieving each energy security and affordability for Filipino consumers,” he said in an interview.
Mr. Baga also said the move sends a transparent signal that “the Philippines is open for business to serious investors who will deliver the facility our country needs.”
Currently, renewable energy accounts for 25% of the national power mix, with the federal government aiming to extend the share to 35% by 2030 and 50% by 2040.
Before constructing an influence plant, proponents must secure a service contract from the DoE, granting the appropriate to explore, develop, and utilize RE resources in a given area. Corporations may apply on to the DoE or take part in the federal government’s green energy auction program, which promotes competitive and transparent procurement to secure the bottom cost of electricity.
The DoE terminates contracts of projects that fail to satisfy obligations, resembling missing work program requirements or failing to secure vital permits and grid connection studies. The crackdown on inactive projects began in 2024, following repeated delays and non-compliance.
Avril de Torres, deputy executive director of think tank Center for Energy, Ecology and Development, said the federal government should quickly replace terminated contracts with capable developers while maintaining the goal of reasonably priced electricity.
“The terminations themselves should not the obstacle; they indicate the necessity to examine why targets should not being met,” she said.
“Failure to act on contracts which have not been honored — or to make sure their capacities are replaced by renewable energy to displace fossil-fuel generation — would hamper the Philippines’ RE targets,” Ms. De Torres added.
Energy Secretary Sharon S. Garin said the department is considering blacklisting firms that fail to deliver on project commitments.
“People shouldn’t monetize a privilege given by the federal government,” she told One News’ Storycon.