The Department of Energy (DOE) is seeking to expand renewable energy (RE) use in off-grid areas by partnering with both government agencies and private sector developers. The initiative aims to reduce reliance on diesel generators in communities served by the Small Power Utilities Group (SPUG).
SPUG currently oversees 278 mostly diesel-powered plants in remote areas that are not connected to the main grid. The DOE is exploring hybridization projects, combining renewable energy sources like solar, wind, and hydro with existing diesel plants, to provide cleaner and more affordable electricity.
DOE undersecretary Rowena Cristina Guevara noted that the current cost of generating power in SPUG areas averages ₱18 per kilowatt-hour (kWh), reaching as high as ₱62 in some locations. Consumers, however, pay only ₱7 to ₱8 per kWh, with the difference subsidized by all grid-connected customers through the Universal Charge for Missionary Electrification.
“Integrating renewable energy in these areas can provide reliable and cheaper electricity over time, but financing remains a key challenge,” Guevara said. The DOE is working on low-interest financing models that would not rely on sovereign guarantees or long-term contracts, making projects more feasible under the country’s emerging retail competition framework.
The department is engaging groups such as the Philippine Solar and Storage Energy Alliance, Philippine Hydro Inc., and the Wind Energy Development Association of the Philippines, along with multilateral banks and private developers, to move hybridization efforts forward.
NPC president Jericho Jonas Nograles described the effort as “not just an energy transition strategy—it is a fiscal, climate, and nation-building strategy,” emphasizing that hybridization benefits both the environment and some of the country’s poorest communities.
