Philippine companies that have registered for the government’s renewable energy option programme have grown 120 per cent since it was launched in 2021.
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However, limited renewable energy supply allocated to the programme has hindered it from progressing further, according to a report by nonprofit The Climate Reality Project.
The Green Energy Option Programme (GEOP) is a voluntary policy mechanism that was kickstarted to enable electricity end-users to choose to source their electricity from renewable energy sources, rather than relying on the electricity grid provided by the utility company. It is one of the policies put in place to help the country achieve the goals set under the Renewable Energy Act of 2008, which aims to reach a 35 per cent clean energy target by 2030.
The programme has attracted 451 GEOP-registered meters but only 18 renewable energy suppliers, resulting in limitations in the number of customers it can accommodate, the analysis found.
GEOP’s current requirement for continuous real-time renewable energy supply and replacement power favours larger companies with geothermal and hydropower capacities that are considered “baseload”, or the minimum amount of electricity needed to be supplied to the grid, Pocholo Enriquez, the report’s author, told Eco-Business.
The Green Energy Option Programme (GEOP) was launched in 2021, with the first consumers registered in March 2022. There have been a total of 451 end-users as of Septermber 2024. Image: The Climate Reality Project
Large energy firms like ACEN, FirstGen, Aboitiz Power Corporation are the only ones able to meet this requirement, discouraging small and medium players to join and compete, he added.
“We have proposed to the department of energy to amend GEOP rules to allow suppliers to source replacement power from the wholesale electricity spot market, where renewable energy takes priority dispatch,” said Enriquez, also the energy analyst for The Climate Reality Project.
Renewable energy firms currently sell power directly through the wholesale electricity spot market (WESM), the country’s trading floor of electricity, where dispatching energy generation is dependent on which power company makes the lowest bid.
The Climate Reality Project, which advocates education related to climate change, also proposed that the government adopts “volume matching”, which removes the need for electricity supply 24 hours a day.
This allows smaller suppliers with variable solar and wind power generation to participate by ensuring they deliver the equivalent monthly energy volume required by a customer, said Enriquez.
“This approach ensures that the total volume of energy consumed is matched by renewable generation, eliminating the need for replacement power. This makes the system more flexible while still supporting renewable energy goals,” he said.
The GEOP’s requirement for end-users to have a minimum average monthly peak demand of 100 kilowatts (kW) in one year is another limitation of the programme, noted the study.
“Retail aggregation”, which refers to electric meters within an adjacent area that can be combined to meet the energy requirement, is an option put forward by advocates for the government to consider.
For instance, two adjacent business process outsourcing offices with separate electric meters but owned by the same company could qualify under this setup.
Regional disparities and bureaucratic hurdles
A bulk of those registered under GEOP are from the island group of Luzon, nearly half of which are in the capital of Metro Manila, which, according to the analysis, has better infrastructure, economic conditions, and supplier availability compared to the Philippines’ other regions.
Only 20 per cent of the GEOP meters are in the Visayas region, while there are no registrations in Mindanao despite the programme being launched there in 2024.
Mindanao, which has the highest levels of poverty among the three island groups, has only five distribution utilities and electric cooperatives that are registered as retail netering services providers in the programme.
Geographic distribution of GEOP-registered meters. Image: The Climate Reality Project
Bureaucratic hurdles likewise abound for companies registered for the programme, the study added.
The registration process takes half a year and local public facilities like hospitals and state universities are unable to readily access it due to a laborious procurement process.
Renewable energy suppliers are unwilling to “reserve” that supply for a long period of time, that would be considered as “wasted supply” which could have been sold off to other entities, said Enriquez.
However, the report noted that addressing these issues requires targeted campaigns especially in underserved areas, enhanced infrastructure, and stronger policy support.
“GEOP is pivotal to the Philippines’ clean energy transition since rising demand for renewable energy will continue to drive down power prices. It offers a clear and easy choice forward – one one that delivers financial savings and sustainability,” it read.
