Renewable Energy Adoption Expected to Lower Power Rates in the Philippines

Increasing adoption of renewable energy in the Philippines could push average annual spot power prices as much as 24 percent lower by 2029, according to the country's power market operator.

Spot power prices in the Philippines hit a post-pandemic low of P4.14 ($0.0731) per kilowatt-hour (kWh) in the first half of 2025, data from the Independent Electricity Market Operator of the Philippines (IEMOP) revealed.

The increased output from cheaper renewable generators has displaced higher-priced plants, with the IEMOP estimating that planned green energy capacity additions could reduce prices by P0.90–1.32 per kWh by 2029. Last year, spot electricity prices averaged P5.58/kWh.

Natural gas-fired power plants, which can adjust generation quickly to offset renewable supply volatility, have also contributed to lowering spot prices this year, as per the IEMOP.

The Philippines, known for having the most coal-dependent grid in the region, is expected to see a decline in coal-fired electricity output annually for the first time since 2008, due to the increasing generation from liquefied natural gas-fired power.

Despite the decrease in spot power market prices, this may not lead to reduced electricity tariffs for Philippine residents, who currently have the second highest electricity tariffs in Southeast Asia after Singapore.

Manila Electric Co., the country's top power retailer, raised tariffs this month despite lower spot prices, citing increased charges from power generators with whom it has costly supply agreements.

However, many retailers are increasing purchases on the spot market to reduce costs by decreasing reliance on expensive long-term supplies. The share of spot market purchases rose to 21 percent of overall supply in the 24 months ended June, up from 12 percent in the preceding two years, according to an analysis of IEMOP data.

According to the source: The Manila Times.