COP28: Philippines at the forefront of energy transition

MANILA, Philippines — The beginning of a year typically ushers renewed hope, and I believe that there is much to be hopeful for. The recently concluded COP28 held in Dubai signaled the “beginning of the end” for the fossil fuel era. For the first time ever, signatories of the United Nations Framework Convention on Climate Change (UNFCCC) penned an agreement to “transition away from fossil fuels in energy systems, in a just, orderly and equitable manner.” The parties also agreed to the tripling of renewable energy capacity and doubling of energy efficiency improvements by 2030. This puts the onus on UNFCCC signatory nations, which includes the Philippines, to set ambitious goals and initiatives to shift energy systems from fossil fuel to renewables, and help attain the 1.5-degree temperature limit.

In the case of the Philippines, the country has a liberalized power sector and a well-functioning electricity market. Amidst steady growth in electricity demand and continuing moratorium for the construction of new coal plants, the country’s power supply situation is expected to remain relatively tight in the short to medium term. The country continues to rely on fossil fuel, including coal fired power plants (CFPP) which account for more than half of the country’s supply. As such, the Department of Energy (DOE) is empowering the private sector to make choices related to transitioning from fossil fuel to renewable energy, “encouraging a voluntary early and orderly decommissioning or repurposing of coal-fired power plants, while securing a stable supply and addressing the climate emergency by ramping up our renewable energy target of (35 % share by 2030 and) 50% share by 2040.”

ACEN, the listed energy platform of Ayala Group, is leading the charge in the energy transition in the Philippines and around the region. We established Ayala’s energy platform from a standing start in 2011. By 2019, fossil fuel power plants accounted for over 70% of ACEN’s portfolio while renewables capacity was only at around 150MW. Over the last five years, we accelerated the scale up of renewables, growing 30x to 4500MW of renewables capacity and accounting for 98% of the company’s generation