The story of the Philippines encapsulates a delicate balancing act, it’s the tale of a rapidly expanding economy in Southeast Asia that requires energy to sustain its growth, while simultaneously navigating a transition toward decarbonization.
Labelled the fastest-growing economy in 2023, the Philippines overtook neighbouring countries with its GDP expansion of 5.6% in 2023. With the government’s confidence that the country’s economy will expand 6.5% to 7.5% this year1, meeting and improving its energy requirements which, currently are expensive and unreliable2 is imperative.
The country’s vulnerability to climate change further underscores the urgency of its commitment to reducing greenhouse gas (GHG) emissions by 75% by 2030 under the Paris Agreement. But first, the country must address its largest emission source—the energy sector.
Costly Imports and Uncertain Supply
A number of factors contribute to high electricity prices, including significant transmission costs and the costly import of fuel for coal-fired power plants, which supply approximately 40% of the country’s energy mix.3 Power generation alone makes up 54% of the electricity rate.4
Energy insecurity also looms large over the nation’s electricity supply, with the anticipated depletion of the Malampaya deepwater natural gas project by 20275. Initiated to reduce oil imports and stabilise energy supply, the plant supplies 20% of the country’s electricity6 to areas including Metro Manila and 7 other provinces.
Philippines Government approach to achieve energy security
To address these challenges, the Philippines government has introduced various laws, regulations and initiatives to achieve its economic, infrastructure and energy goals.
- The Philippine Energy Plan (PEP) 2020 – 2040, a transformational plan to increase energy security, resiliency, access and affordability of clean energy.
- Increase the production of clean and indigenous sources of energy to meet the growing economic development of the country;
- Decrease the wasteful utilisation of energy through the use of energy efficiency tools and strategies; and
- Ensure the balance between the provision of reliable and reasonably priced energy services, support for economic growth, and protection of the environment.
- Electric Power Industry Reform Act (EPIRA) of 2001 aims to reform the electric power industry by enhancing the competitive operations of the electricity market to ensure reliability and affordability of the supply of electric power.
- Nationally Determined Contribution (NDC) sets a 75% greenhouse emission reduction and avoidance by 20230, as part of the Philippines commitment to the Paris Agreement on Climate Change.
- Renewable Energy Act of 2008 accelerates the development of renewable energy sources and local capabilities in the use of renewable energy systems.
ENGIE—A One-stop Partner for Efficient Energy Solutions
ENGIE Services Philippines is one of 12 certified ESCOs.7 Well aligned with the nation’s agenda of energy efficiency as a first fuel, ENGIE offers the nation its expertise in low-carbon green energy and engineering proficiency. Additionally, its steady financial position encourages Build, Own, Operate, Transfer (BOOT) projects, ultimately empowering businesses with bespoke, comprehensive turnkey energy solutions.
In a strategic decarbonisation partnership with property developer Filinvest Land Inc., three joint venture companies execute seamless integration and operation: Philippines DCS Development Corporation (PDDC), Filinvest-ENGIE Renewable Energy Enterprise, Inc. (FREE), and Professional Operations and Maintenance Experts Incorporated (PROMEI).
Festival Mall
The Festival Mall project stands as a testament to ENGIE’s commitment to energy efficiency, sustainable practices, and top-tier facilities management. In 2023, ENGIE together with PDDC and Festival Mall embarked on the construction of a centralized cooling system (CCS), set to service Alabang’s bustling commercial hub, the country’s 5th largest mall. Slated for completion in 2025, this initiative is projected to curtail an impressive 47,500 metric tons of CO2 emissions over its 20-year lifespan.
The CCS seamlessly complements Festival Mall’s existing 2.8 MW rooftop solar array, operational since 2021 and recognized as the largest of its kind in Metro Manila.
This integration underscores ENGIE’s capacity to deliver comprehensive solutions tailored to client needs. By liaising with a single point of contact ENGIE, Festival Mall streamlined its transition to sustainable energy practices, with solar energy before integrating the cooling system.
Moreover, ENGIE distinguishes itself by offering not just engineering prowess but a commitment to long-term efficiency and cost-effectiveness. Unlike conventional contractors focused solely on initial capital outlay, ENGIE designs solutions with an eye on minimizing total ownership costs. Festival Mall benefited from this approach with the adoption of state-of-the-art technology, optimizing utility production, and minimizing operational expenses.
CEMEX
The largest of FREE’s undertakings is a 10.08 MW ground-mounted solar array with leading cement producer, Cemex. Aligned with Cemex’s goal of attaining a 65% clean energy mix, the 25-year PPA is forecasted to reduce upwards of 9,000 metric tons of CO2 annually.8
Across all projects, PROMEI serves as the operational and maintenance arm of ENGIE Services Philippines and Filinvest, ensuring a comprehensive and seamless integration of services.
Green and Sustainable Energy Solutions for All
In today’s landscape of high energy prices and volatility, companies are driven to seek energy reduction strategies and self-sufficiency through on-site energy production. ENGIE addresses this need in Southeast Asia by offering efficient energy solutions, ranging from large-scale renewables to low-carbon infrastructure like district cooling systems (DCS) and electric vehicle (EV) charging.
Partnerships are essential, particularly in markets like the Philippines, where a clear path toward decarbonization is emerging, shaping new regulations on building efficiency and industrial production. Leveraging its commitment to cleaner energy and decarbonization, ENGIE stands ready to assist clients with tailored advisory services and bespoke strategies.
Read about our latest projects with Filinvest here.
Speak to ENGIE today and embark on a transformational journey towards a decarbonised future.
Connect on LinkedIn: Kevin Lamela
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- Vera Files: VERA FILES FACT SHEET: Four Things You Need to Know about Malampaya
- Manila Standard: Shell set to end natural gas supply to Ilijan power plant
- Department of Energy Philippines: List of Energy Service Company (ESCO) As of 31 December 2023
- ENGIE South East Asia: Filinvest & ENGIE Secure Over 13 MW of Solar and 11.4K RT of Sustainable Cooling Projects in the Philippines