The supply of primary energy in the Philippines is dominated by imported petroleum and indigenous new and renewable energy resources (NRE), the latter largely being biomass fuels used for residential and industrial purposes. Apart from NRE, other principal forms of indigenous energy supply are hydro and geothermal energy used for power generation. Coal supplies are a mix of imported and indigenous products, with indigenous product currently providing about 15% of total coal consumption, a proportion unlikely to rise above 30% in the long term according to the DOE Energy Plan.

To date, the total installed capacity of the Philippines’ power generating plants is recorded at approximately 16,000 megawatts. Although coal-fired power plants reflect 26% of power generation followed by oil-based at 23%, the renewable sources such as hydro, natural gas, and geothermal now account for 21%, 18%, and 12% respectively. In the industrial horizon, the wind and solar-based sources are evolving and in the future, could progress from its current share of 1%.

With its growing industrial demand, the Philippines still needs an additional 4,000 to 4,350 megawatts to sustain its national requirements. This is why power projects using renewable energy sources continue to be preferred activities. This means that a wider scale of tax and non-tax incentives could be provided to investors.

Biomass power plants