The dominance of coal and rising electricity tariffs

At first glance, the situation seems contradictory. Coal provides most of the electricity in the Philippines, while oil accounts for only about 1% of power generation.

However, electricity prices are still rising.

Energy officials say the explanation lies not in oil’s share of the energy mix, but in how the energy market works and how fuel prices globally.

According to the Department of Energy (Philippines), electricity prices could rise as much as 16% as global fuel costs rise due to geopolitical tensions and disruptions in energy markets.

Energy Secretary Sharon Garin said higher oil and fuel prices could eventually feed into the costs of power generation — even if the oil itself produces only a small fraction of the electricity.

The reason: fuel prices affect the entire electricity market, including coal and gas contracts.

It is hoped that the peak will only be temporary.

And with over 10 GW of new projects awarded in recent auctions, momentum is building.

Experts argue that accelerating renewables isn’t just green — it’s essential for affordable and resilient energy in a climate-vulnerable country. Main benefits:

Renewable energy (RE) can reduce dependence on imported coal and gas, protecting consumers from global price shocks. By 2024, renewables have already saved Filipinos billions in avoided fossil fuel costs.

Over time, they reduce electricity tariffs by avoiding fuel costs – potentially reducing prices by up to 90% in some regions by 2050 through diversification.

The country is also encouraging distributed systems such as solar rooftops and microgrids that electrify remote islands, where 2 million people still have no power. They also create local jobs and boost economic recovery.

For example, government employees under the GSIS are now offered loans to build a solar power system at home.

Going forward, the DOE targets a 35% share of renewables by 2030 and 50% by 2040/2050.