Renewable energy (RE) development in the country is seen poised for a slowdown following the US deci-sion to withdraw again from the Paris Climate Agreement, but a global energy forum on Wednesday urged power developers to seek out opportunities rather than be deterred by the challenges of expansion.
Ayala Group RE unit ACEN Corporation, for instance, urged power developers to face the looming US’ with-drawal from the Paris Climate Agreement by investing in energy efficiency efforts, and not be tunnel-visioned into developing additional power capacities only.
ACEN Corporation is the listed platform of the Ayala Group for RE design, development and management, particularly, wind and solar plants.
Eric Francia, president and chief executive officer of ACEN Corp., warned that US President Don-ald Trump’s planned withdrawal from the Paris climate pact and his stand on renewable energy would likely result in the US holding off interest rate adjustments.
That, in turn, may affect capital spending by power developers and raise uncertainty in America’s plans to drill more indigenous oil and gas resources, Francia explained. He added, less expenditure by power devel-opers and local drilling uncertainties may lead to stranded assets due to a possible oversupply, and senti-ment pulling down the market values of publicly listed RE companies.
Silver lining
“I think there are opportunities in these challenges. These global policies are driven by the US and so are only part of the equation. You need to look at the impact of local and regional policies and that is where we have a great silver lining and an opportunity to unlock opportunities in these challenges,” Francia said.
The ACEN president added that despite current calls for power capacity additions, developers must not use the issue as the only reason to pursue clean energy transition.
ACEN is among several renewable energy developers in the Philippines that took part in the RE forum hosted by the Asia CEO Forum in Taguig City, on Wednesday, April 2, and zeroed in on the impact of the planned US withdrawal from the Paris Climate Agreement. The international pact, advocated by the United Nations, mandates countries to come up with efforts to act against rising global temperatures.
Local energy stakeholders said that renewable energy (RE) developments may only experience a slowdown and not a complete reversal amid the United States’
decision to withdraw again from the Paris Climate Agreement.
In January, US President Donald Trump issued an executive order that would again ease America out of the Paris agreement. The US first withdrew from the climate agreement and then returned to the pact during the term of former president Joe Biden.
The US’ intention to leave the Paris Agreement and its funding commitments will now require at least a year to be processed based on the current rules of the United Nations.
Once completed, the US will join Iran, Libya and Yemen as the only nations outside of the agreement.
Silver lining
RE developers see a silver lining in the planned US withdrawal. Clean energy developments in the country will continue especially since a big portion of RE developments, particularly solar, are coming mostly from China and other Asian countries, Theresa Cruz-Capellan, chair of the Philippine Solar and Storage Energy Alliance (PSSEA), said during the RE forum.
“I believe that none of the Asian participants in this global effort to transition into a net zero has indicated a slowdown in their manufacturing, in this part of the world,” Capellan said. “It is the cost, the economics that will dictate the momentum of this transition. It is not politics,” Capellan added.
US investments related to energy transition have already been “relatively flattish” even before Trump’s re-turn to US presidency anyway, Oliver Tan, president and chief executive officer of the Citicore Renewable Energy Corp. (CREC), said.
“It actually has been flattish even before the return of President Trump to the White House,” he said.
Renewable energy investment in the world has been “primarily led by China,” Tan said. “And just to add to the point, while government policies, all the noises, including tweets from POTUS (President of the US), can influence capital allocation and the capital flow, at the end of the day, smart money will eventually find its way to areas where there’s compelling investment thesis. And the Philippines today is a very compelling investment thesis for funds that eventually will come,” Tan added.
Tapping other funding sources
Energy Undersecretary Rowena Guevara said that with the current US administration’s stance on RE de-velopments, local projects can instead tap other sources of funding.
“I look at this as an opportunity for the region to flourish in renewable energy. We can have partnerships among us, and we do have leaders in Asia like China, Japan, Korea and India, already leading the RE mar-ket,” Guevara said.
Energy Secretary Raphael Lotilla said the country’s RE program must be viewed “in the context of today’s challenges.”
“We’re facing a complex geopolitical situation globally and to respond, we need to diversify our energy sources. That’s a big reason why we’re pushing renewable energy. It will help secure our energy supply long-term and it aligns with our goals for sustainable, affordable, and accessible energy,” Lotilla explained.
He added that despite the push for RE, the Philippines should further develop and utilize indigenous fuel resources, including fossil fuels.
“For a while, we’ll need natural gas to balance out the ups and downs of renewable energy, especially solar and wind. So, the push to explore more natural gas sources goes hand-in-hand with our renewable energy goals,” Lotilla stressed.
Based on latest data from the DOE, as of the end of 2024, the total share of both on-grid and off-grid RE capacity in the country, composed of hydro, geothermal, wind, biomass and solar technologies, was at 9,581 MW, or 31.4 percent of the country’s total power supply mix at 30,513 MW.
The Philippine government aims to increase RE’s share in the power generation mix to 35 percent by 2030 and raise it further to 50 percent by 2050.
