Philippines' rising renewables use could push power prices 24% lower by 2029, market operator says
Spot power prices in the Philippines have fallen to a post-pandemic low of 4.14 Philippine pesos ($0.0731) per kilowatt-hour (kWh) in the first half of 2025, data from the Independent Electricity Market Operator of the Philippines (IEMOP) showed.
Increased output from cheaper renewable generators have helped displace higher-priced plants this year, the IEMOP said, estimating planned green energy capacity additions to slash prices by 0.90–1.32 pesos per kWh by 2029.
Spot electricity prices averaged 5.58 pesos/kWh last year.
Natural gas-fired power plants - which can quickly adjust generation to offset renewable supply volatility - also output this year, IEMOP said, helping bring spot prices down.
The Philippines, which has the most coal-dependent grid in the region, is on track for an annual decline in coal-fired electricity output for the first time since 2008 due to rising liquefied natural gas-fired power generation.
Lower prices on the spot power market don't necessarily translate into reduced electricity tariffs for Philippine residents, who pay the second highest electricity tariffs in southeast Asia behind Singapore.
The country's top power retailer Manila Electric Co (MERALCO) (MER.PS), opens new tab increased tariffs this month despite lower spot prices, citing higher charges from power generators with whom it has expensive supply deals.
However, most retailers have increased buying on the spot market, as they seek to cut costs by reducing dependence on pricey long-term supplies.
The share of spot market purchases rose to 21% of overall supply in the 24 months ended June, compared with 12% in the preceding two years, an analysis of IEMOP data showed.
($1 = 56.6450 Philippine pesos)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
7 hours ago
- Reuters
Blackout hits central, southern Iraq, sources say
BAGHDAD, Aug 11 (Reuters) - Major oil producer Iraq was hit by a power outage in its central and southern regions on Monday after a shutdown at a power plant in the western province of Anbar, electricity ministry sources said. The sudden shutdown of the Hamidiya plant led to a fault in the electricity transmission network, the sources said. The temperature in the capital Baghdad reached a high of 47 degrees Celsius on Monday. The chair of Iraq's parliament energy committee told Reuters the outage did not affect the semi-autonomous Kurdistan region. Many Iraqis for years have relied on privately operated generators for power as government-provided electricity was only available for a few hours a day. Some others have turned to solar power to help cover their electricity needs. The oil ministry could not immediately be reached for comment. The electricity ministry said it was working in "full emergency mode" to restore power, the state news agency reported. A member of the Organization of the Petroleum Exporting Countries, and one of the world's leading oil producers, Iraq has struggled to provide its citizens with energy since the 2003 U.S.-led invasion that toppled Saddam Hussein. In the ensuing turmoil, under-investment and mismanagement have left the national grid unable to cope with demand. Hundreds of Iraqis protested in Baghdad in the summer of 2021, when power and water cuts gripped large parts of the country as temperatures exceeded 50 degrees Celsius. In March, U.S. President Donald Trump's administration rescinded a waiver that had allowed Iraq to pay Iran for electricity, as part of Trump's "maximum pressure" campaign against Tehran. Iraq is heavily dependent on Iranian natural gas imports to generate power.
The Guardian
7 hours ago
- The Guardian
UK taxpayers on hook as failed Cumbria coalmine investors sue government
The UK government is being sued in a secretive 'corporate court' after a proposal for a new coalmine in Cumbria was quashed by the high court. If successful, UK taxpayers would have to fund a substantial compensation payment to the mine's investors. It is the first such case to be filed against the UK government by a fossil fuel company as a result of climate policy. The case uses investor-state dispute settlement (ISDS) rules agreed in a 1975 trade agreement between the UK and Singapore, where the major investor in the coalmine is incorporated. The details of the claim have not been made public, but ISDS courts allow foreign investors to sue states when their activities are affected by government policies, such as green regulations. ISDS courts were described as 'unjust, undemocratic and dysfunctional' in a recent UN report. Experts have repeatedly warned that their use threatens efforts by countries to cut carbon emissions and fight the climate crisis. More than $100bn in public money has been awarded to corporations through ISDS courts. Fossil fuel companies have benefited most, receiving $80bn since 1998. The controversial proposed coalmine in Cumbria was blocked by the high court in September. The judge ruled it had been unlawful for the then Conservative government to accept a claim that the mine would be 'net zero' when granting planning permission. Labour ministers have since withdrawn government support for the mine. Cleodie Rickard, the trade campaign manager at the NGO Global Justice Now, said: 'We've been calling on the government to scrap ISDS in its trade deals for years, to stop exactly this eventuality: fossil fuel companies suing us over necessary climate action.' She added: 'These corporate courts mean that when governments or courts make the right decision, like halting the Cumbria coalmine, foreign corporations have the power to threaten the government in highly secretive processes. If they win, they get to pass their losses from obsolete projects on to the taxpayer.' The case has been filed by Woodhouse Investment Pte Ltd, a Singaporean company, and West Cumbria Mining (Holdings) Limited. Woodhouse Investment holds 80% of West Cumbria Mining and is itself owned by a firm in the Cayman Islands. The companies are being represented by the barrister and Conservative MP Geoffrey Cox and the law firm Withers. Sign up to Down to Earth The planet's most important stories. Get all the week's environment news - the good, the bad and the essential after newsletter promotion The most used ISDS agreement is the Energy Charter Treaty, which was initially intended to protect foreign investment in the former countries of the Soviet Union. The UK withdrew from the ECT in February 2024, saying it 'could penalise us for our world-leading efforts to deliver net zero'. A 'sunset clause' means investors may still use the ECT for up to 20 years. The government is also reported to want ISDS terms in a trade deal being negotiated with India. The oil company Exxon Mobil is using the ECT to sue the Dutch government for its decision to phase out gas exploration in Groningen, while the UK oil business Rockhopper was awarded $190m in a case it brought against the Italian government, though that has since been annulled. Chris Rowley, of the Cumbria-based charity South Lakes Action on Climate Change, said: 'We are very disappointed to see this attempt by West Cumbria Mining to sue the UK taxpayer after their proposed coalmine was refused an extraction licence and its planning application was quashed. We hope that the UK government will oppose this claim as strongly as they can.' West Cumbria Mining, Cox, Withers and the Department for Business and Trade have been contacted for comment.
Reuters
8 hours ago
- Reuters
Orsted plunges as it seeks $9.4 billion to cope with Trump's hostility to wind power
COPENHAGEN, Aug 11 (Reuters) - Shares in Orsted ( opens new tab plunged to a record low on Monday as the wind farm developer asked shareholders for $9.4 billion to help fund a U.S. project, after potential partners were put off by U.S. President Donald Trump's hostility to wind power. The 60 billion crowns ($9.4 billion) rights issue is worth around half of the Danish company's market value as of Friday's close. Struggling in recent years with soaring inflation and logistical problems that sent costs soaring, the offshore wind industry faced a further setback when Trump suspended licensing on his first day back in office in January. "Orsted and our industry are in an extraordinary situation with the adverse market development in the U.S. on top of the past years' macroeconomic and supply chain challenges," said CEO Rasmus Errboe. Trump campaigned on a promise to end the offshore wind industry, saying it is too expensive and hurts whales and birds. Orsted said two-thirds of the new capital would be used to fund the construction of Sunrise Wind - one of its two remaining projects under development off the U.S. East Coast. Potential co-investors for the project pulled out after Trump's administration in April ordered Equinor ( opens new tab to halt the development of a neighbouring fully-permitted wind farm. The order, which sent shockwaves through the industry, was reversed the following month, however. "Following the stop work order on Equinor's Empire Wind project, the perceived risks of the U.S. offshore wind market among investors and banks increased significantly," Errboe said. Orsted depends on selling full or partial stakes in its offshore wind farms to finance new projects. Errboe, who replaced former CEO Mads Nipper earlier this year, has sought to cut costs and cancelled projects in the U.S. and Britain. The rest of the expected proceeds from the rights issue would strengthen Orsted's finances and help it develop the 8.1 gigawatts of offshore wind projects currently under construction by 2027, the company said. Orsted shares lost nearly one-third of their value to hit a record low. At 1327 GMT, they were down 31.2% at 212 crowns. "The U.S. offshore wind market was crippled after Trump took office. But things started going badly for Orsted before Trump," said Sydbank analyst Jakob Pedersen. Orsted has, in recent years, scrapped some U.S. projects and booked hefty impairments due to supply chain delays, inflation and shifting subsidy policies in the nascent U.S. offshore wind market. "The company is in really bad shape. A capital increase was the last resort. It was not just the right decision, it was the only option they had left in their toolbox," said Sydbank's Pedersen. Jefferies analysts said in a note that while the fundraising would help to de-risk the company's balance sheet, the near-term dilution for shareholders "seems substantial". The Danish state, which owns 50.1% of Orsted, agreed to subscribe to a similar portion of the share issue, thus retaining a majority stake. "Orsted is an extremely important company in the green transition, and there is also a security policy dimension where we need to be independent of energy from Russia," Denmark's Finance Minister Nicolai Wammen told broadcaster TV2. Right-wing Danish opposition lawmakers criticised the government's support for the rights issue, questioning why Danish taxpayers should help finance a U.S. project. A spokesperson for Equinor, which holds a 10% stake in Orsted, said it would assess Orsted's proposal. Shares not subscribed for by the existing shareholders or other investors would be fully underwritten by Morgan Stanley, Orsted said. Orsted also said it expects to raise more than 35 billion crowns from selling its European onshore wind business as well as from planned divestments of stakes in its Changhua 2 offshore wind farm in Taiwan and Hornsea 3 in Britain. ($1 = 6.3953 Danish crowns)
