Market operator: Increasing renewable energy use in the Philippines could lower power prices by 24% by 2029.

The Philippines' power market operator stated on Thursday that the adoption of renewable energies could reduce average annual spot electricity prices by as much as 24 percent by 2029.

The Independent Electricity Market Operator of the Philippines' (IEMOP), according to its data, has shown that spot power prices in the Philippines fell to a low of 4,14 Philippine pesos (US$0.0731) per Kilowatt-hour in the first half of the year 2025.

IEMOP says that the IEMOP estimates that green energy capacity expansions will reduce prices by 0.90-1.32 Pesos/kWh by 2029.

Last year, the average spot electricity price was 5.58 pesos/kWh.

IEMOP stated that natural gas-fired plants, which can quickly adjust their generation to offset the volatility of renewable supply, will also be producing this year. This will help bring down spot prices.

The Philippines, with the most coal-dependent power grid in the area, is expected to see a decline in coal-fired output annually for the first since 2008, due to the increase in liquefied gas-fired generation.

The lower prices on the spot market do not necessarily translate to lower electricity rates for the residents of the Philippines, who pay the highest electricity tariffs among Southeast Asian countries behind Singapore.

Manila Electric Co. (MERALCO), the country's largest power retailer, increased its tariffs in this month despite lower prices at the spot market. It cited higher charges by power generators that it has contracts with.

Most retailers, however, have increased their purchases on the spot markets, in order to reduce costs and reduce dependence on expensive long-term supply.

Analysis of IEMOP data revealed that the share of spot market sales increased to 21% in the 24 month period ended in June, up from 12% the two previous years. $1 = 56.6445 Philippine pesos (Reporting and editing by Leroy Leo; Sudarshan Varadhan)

(source: Reuters)