Introduction

The Philippine Department of Energy (DOE) is preparing a policy aimed at forcing developers of stalled coal-fired power projects to either begin construction or give up their permits, a move designed to unlock as much as five gigawatts of delayed generation capacity. The initiative, confirmed by Energy Undersecretary Rowena Guevara, targets projects that were exempted from a 2020 moratorium on new coal plants but have yet to break ground.

"You can see our existing coal plants break down, some are derated, they won't be able to produce 100 percent," Guevara told reporters. "Because of this, we need to build those that are not covered by the moratorium… They're not covered by it, but they are not building."

Policy Details

According to Guevara, the DOE will establish strict work plans and binding execution schedules for the affected projects. Developers who fail to comply would either be compelled to proceed with construction or officially abandon their projects, freeing up space for alternative generation capacity.

The measure addresses a gap in the country's energy governance: while renewable energy contracts include clear milestones and automatic termination clauses for non-compliance, fossil fuel developments have operated without similar enforcement mechanisms, Guevara explained.

She noted that the DOE originally planned to issue the guidelines in June but postponed the rollout to conduct further industry consultations.

The policy will not lift or weaken the 2020 coal ban. Instead, it tightens oversight on the handful of pre-approved or legacy expansion assets deemed critical for short-term grid reliability while the country transitions toward its long-term climate targets. "We have to fulfill our Nationally Determined Contributions, we have to fulfill our renewable energy targets," Guevara said. "At the end of the day, we cannot have sudden brownouts."

Scale of the Problem

Guevara said that about three to five gigawatts of coal contracts have yet to move forward. "That's still a lot. But that's the thing, we're not seeing them build," she said, adding that the lack of progress on these projects stands in contrast to renewable energy projects, which are guided by clear work plans and development timelines.

The urgency stems from the deteriorating condition of existing coal plants. The country is currently facing an urgent supply buffer challenge as aging coal stations suffer frequent unscheduled outages, squeezing reserve margins in the main Luzon grid. Guevara cited the need to address forced outages and deratings of several coal-fired power plants.

Data from the National Grid Corp. of the Philippines, cited by com, shows that the Visayas has recorded 27 red alerts and 92 yellow alerts since the start of the year, underscoring the strain on the grid.

Broader Energy Context

The government has banned the construction of new coal plants since 2020, but the moratorium does not cover projects that had already been committed before it took effect. Many of those exempt projects remain idle, and Guevara warned that developers could eventually face contract termination if they do not move forward.

The policy comes as the Philippines pursues ambitious renewable energy targets. The country aims to increase the share of renewables in its power mix to 35 percent by 2030 and 50 percent by 2040, up from the current 25 percent. It has also committed to cutting greenhouse gas emissions by 75 percent by 2030 under its nationally determined contribution.