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On June 10, the Visayas grid was placed under a red alert status, prompting the implementation of rotating power interruptions as supply tightens due to high demand and limited available capacity.
Meanwhile, the Mindanao grid has been raised to yellow alert, indicating thinner operating reserves but still sufficient to meet current demand. However, the status signals an increased risk of power interruptions if supply conditions worsen or additional plants go offline.
Together, the alerts underscore continued pressure on the country’s power system, with utilities closely monitoring demand spikes and generation constraints to prevent wider outages.
Industry observers note that dependable baseload generation remains a key pillar of the Philippine power system. Unlike intermittent renewable energy (RE) sources, conventional plants can operate around the clock, helping ensure a steady flow of electricity to households, hospitals, businesses, and manufacturing facilities even when solar and wind output fluctuates.
The Philippine Independent Power Producers Association (PIPPA) likewise stressed that RE on its own is not sufficient to ensure a stable and reliable power supply. “Remember that RE is intermittent, and for every additional capacity in renewable energy, you have to have sufficient ancillary services to stabilize it,” stated PIPPA President Atty. Anne Montelibano.
Ancillary services are those that help secure the grid when solar and wind output fluctuates. As RE capacity expands, the need for these balancing resources also grows, adding to system costs. In the Philippines, ancillary service charges have increasingly become a major driver of transmission costs passed on to consumers.
(Also read: Energy Transition or Energy Illusion?)
The Urgent Case for a Balanced Energy Mix
In September 2025, government and private sector officials underscored that the Philippines’ energy transition will depend on carefully balancing energy security, affordability, and sustainability amid rising electricity demand. The discussion highlighted the ongoing challenge of expanding supply while keeping power costs manageable and ensuring system reliability.
Department of Energy (DOE) Undersecretary Mylene Capongcol explained that maintaining equilibrium among these three priorities remains the core of the Philippine Energy Plan. “We cannot leave one behind the other,” Capongcol said, noting that the goal is to ensure all Filipinos have access to affordable and reliable electricity.
We take a closer look at the limitations of relying on RE alone in meeting these objectives.
High costs of RE transition
“I think when we talk about transition, it’s not cheap. It’s expensive because it involves new and innovative technologies like battery energy storage,” stated Capongcol.
Battery energy storage systems (BESS) have seen steep cost declines in recent years, but remain capital-intensive to deploy at scale. Recent industry estimates place total installed costs for utility-scale systems at roughly $100 to 150 per kilowatt-hour (kWh), depending on project design, duration, and grid requirements, while four-hour storage systems still translate to high system-level costs when paired with transmission and integration needs.
Meanwhile, Energy Regulatory Commission (ERC) Chairman Francis Saturnino Juan warned against a rapid RE expansion, saying, “Aggressively pursuing renewable energy supports sustainability but may increase costs if not carefully managed.”
Energy economist Dr. Lars Schernikau explained that the cost of energy rises as power systems rely more heavily on wind and solar, arguing that electrification based on these sources is ultimately the most expensive approach due to added system requirements.
Beyond generation costs, RE-heavy grids require additional spending on balancing supply and demand, backup capacity, storage, and grid infrastructure to manage intermittent output and maintain reliability.
“Electrification relying on wind and solar technology is the most expensive, and it gets more expensive the more wind and solar you utilize in the system,” Schernikau asserted.
Currently, the country’s push for RE is adding to electricity bills through universal charges passed on to consumers. These include the Feed-in Tariff Allowance (FIT-All) and Green Energy Auction Allowance (GEA-All), which fund guaranteed payments for renewable developers, with costs ultimately recovered from end users.
The next phase of expansion, including offshore wind (OSW), highlights rising cost pressures. The ERC has set a ₱11.00/kWh ceiling for the OSW-focused GEA-5, higher than previous levels, reflecting the higher capital requirements of these projects. This cost will be recovered from consumers through their electricity bills.
Baseload generation’s central role
Solar and wind are inherently intermittent, meaning they cannot consistently provide 24/7 electricity. This issue was underscored during the recent red and yellow alerts in the Visayas, as higher RE penetration continues to reshape the country’s power mix.
Juan noted that the resulting outages, which stretched from late afternoon to midnight, point not only to supply shortfalls but also to a deeper system constraint in replacing declining solar output with flexible, dispatchable capacity. “We are not simply facing an afternoon and early evening shortage; we are facing a flexibility shortage in the hours after the sun goes down,” Juan said.
Though the Philippines’ RE share in installed capacity rose to 31.2% in 2025, reaching about 10,436 MW and placing the country fifth in the region in terms of share, energy experts maintain that a megawatt of RE is not equivalent to a megawatt of baseload coal or gas capacity.
This is because wind and solar have significantly lower and more variable capacity factors. The capacity factor refers to the ratio of a power plant’s actual electricity output over time to the maximum it could produce if it operated at full capacity continuously. It is often used to reflect how consistently and efficiently an energy source generates power.
For instance, a 100-MW fossil fuel plant operating at a 70% capacity factor could produce about 613,200 megawatt-hours (MWh) in a year. In contrast, a 100-MW solar farm at a 25% capacity factor would generate roughly 219,000 MWh over the same period.
Fossil fuel plants have higher capacity factors because they can operate continuously on demand, while solar generation is limited to daytime hours and is affected by weather conditions such as cloud cover and seasonal variation.
“Solar/wind with battery back-up is technically still not baseload, able to provide juice 24/7 for months nonstop,” noted PhilStar’s Boo Chanco. “Even the world’s largest batteries generally store enough energy to discharge at full capacity for only two to four hours. DOE and ERC are fooling themselves, and us, for claiming solar/wind with batteries is ‘renewable baseload.'”
Questionable sustainability of RE
Energy sustainability can refer to two things: environmental sustainability, or reducing emissions, and system sustainability, or ensuring a reliable, affordable, and continuous electricity supply.
In terms of environmental impact, the green transition also has its red flags. Solar panels still rely heavily on coal-powered energy and coal-based inputs in their manufacturing. Coal is used to generate electricity for industrial processes and, in effect, powers wind turbines and global shipping through its role in producing key materials like steel and silicon.
In Quezon, GIGAWIND4’s planned ₱34.5 billion, 247-MW Banahaw Wind Power Project drew opposition due to its proximity to the Mounts Banahaw–San Cristobal Protected Landscape. Environmental and religious groups warned that turbine construction near a sacred watershed could trigger soil erosion and damage a culturally significant site protected by law.
Meanwhile, residents and advocacy groups protested the $1.1 billion Ahunan pumped-storage hydropower project in Pakil, Laguna, which aims to deliver 1,400 MW by 2029. Critics cite deforestation risks, displacement concerns, and impacts on sacred pilgrimage sites and farmland as tensions rise between clean energy goals and local livelihoods.
If energy resilience is the concern, the Visayas already has one of the highest shares of RE, accounting for about 49% of generating capacity. Nearly 90% of upcoming generation projects in the region are also expected to come from renewables and battery storage.
However, recent power alerts suggest that reliability challenges persist, pointing to the continued importance of firm baseload capacity alongside RE. The DOE has stressed that dependable baseload plants remain necessary to support rising renewable capacity and maintain a stable electricity supply.
(Also read: New Power Shifts Reshape the Future for Mindanao Electric Cooperatives)
Lessons from Regional Energy Strategies
Regional experience shows the value of an energy mix grounded in both reliability and transition. Vietnam has paired coal and gas for baseload stability while scaling renewables, which now supply a significant share of its power. Indonesia, meanwhile, has successfully tapped geothermal energy as a steady renewable baseload while harnessing coal.
In the Philippines, recent red and yellow alerts across Luzon and the Visayas highlight not only tight supply margins but also the economic cost of grid instability. The Philippine Chamber of Commerce and Industry (PCCI) lamented that the power alerts come at a time when the economy is already under significant strain, adding further pressure on businesses facing rising costs and operational uncertainty.
“Energy instability is not just a regional issue; it is a national economic risk,” the group stated. “With growth already at 2.8% and inflation rising, prolonged brownouts will further weaken productivity, investor confidence, and household welfare.”
For a developing economy, the impact of such interruptions is significant—disrupting industrial output, delaying business operations, and affecting essential services that rely on continuous power. As demand continues to grow, these events underscore the cost of unreliable supply, reinforcing the need for a balanced energy mix that can deliver both stability and affordability.
Sources:
https://www.facebook.com/share/v/1BE3cCCoU6
https://www.ngcp.ph/Article?cid=16932
https://unpopular-truth.com/2026/04/25/rethinking-the-cost-of-electricity/
https://www.philstar.com/business/2026/02/23/2509707/erc-raises-ceiling-price-offshore-wind-auction
ERC Chairman Francis Saturnino Juan, speech at the Economic Journalists Association of the Philippines (EJAP) Energy Forum 2026, Manila, Philippines, May 26, 2026.
https://www.philstar.com/business/2026/06/01/2531859/its-available-baseload-stupid
https://cleantechnica.com/2025/10/02/wind-farm-on-a-sacred-philippine-mountain-sparks-controversy
https://pinoyweekly.org/2025/08/muog-laban-sa-dambuhalang-dam/
https://business.inquirer.net/593120/visayas-in-dire-need-of-new-baseload-power-plants-says-garin
