Power Sector Transition in Albay

Introduction

Map of Albay
By Milenioscuro - Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=92514264

Albay is a province in the Bicol region with a total population of approximately 1.3 million inhabitants. Much of the province consists of the islands of Luzon.

The first electric lightbulb in the Philippines was lit in Tiwi, Albay in 1967.

In October 2023, Albay Governor Edcel Greco Lagman (also known as "Grex") declared a climate emergency, calling on local government units to formulate relevant programs and policies. In February 2024, Lagman committed to transitioning the province to 100% renewable energy with solar, wind, and geothermal by 2030. The province of Albay signed a memorandum of understanding (MOU) with the Philippine Movement for Climate Justice (PMCJ) and agreed to implement the renewable energy plan engaging various stakeholders in the province.

Symbolic Importance

Albay's electrical system is inconsistent with common outages, despite the presence of two operating geothermal power plants within the Province. Existing infrastructure has made it difficult to meet demand in metropolitan centers like Legazpi, and frequent storms exacerbate reliability concerns.

Given Albay's ambitious 100% renewable energy power goals, the Province may serve as a model for replication elsewhere throughout the Philippines.

Current System Description

Current Power Capacity Mix

The Philippines

The Philippines's total installed power capacity is comprised of 31% coal, 4.2% natural gas, 32.2% oil, 4.1% hydropower, and 14.6% of non-hydropower renewable energy, namely geothermal, biomass, solar, and wind energy. Given the drastic increase in the Philippines’s energy demand projected in the next few decades, there are concerns about shortfalls. In fact, a shortfall of more than 150,000 GWh per year is expected across the country beginning in 2040 unless a rapid transition is made.

Source: Global Energy Monitor

Installed renewable energy generation composition across the entirety of the Philippines, as of 2023. Source: [https://www.irena.org/-/media/Files/IRENA/Agency/Statistics/Statistical_Profiles/Asia/Philippines_Asia_RE_SP.pdf IRENA

Albay

By May 2024, two geothermal power plants are operating in Albay province:

Project	Installed Capacity(MW)	Source	Operating Year	Unit Number
Tiwi geothermal power plant	330 MW	Geothermal	1979-1981	6
Tiwi Binary geothermal power plant	17 MW	Geothermal	2023	1
Bacon-Manito power plant	140 MW	Geothermal	1993	2
Palayan Binary Geothermal Power Plant (Expansion of Bacon-Manito power plant)	28.9 MW	Geothermal	2024	Unknown

Since Tiwi Geothermal Power Plant’s commissioning in 1972, total cumulative gross generation has reached 55,270 GWh (as of 2021).

Prospective Power Capacity

Prospective power capacity for the Nation of the Philippines. Wind represents the greatest share of under development projects, with 52,000 MW of offshore and 10,700 MW of onshore capacity in-progress. Source: Global Energy Monitor

Albay

By July 2024, there are three announced geothermal power plant in Albay province:

Project	Installed Capacity (MW)	Source	Operating Year	Unit Number	Status
Mt. Malinao geothermal power plant	50 MW	Geothermal	Unknown	Unknown	Announced
Tanawon geothermal power plant	20	Geothermal	2024	Unknown	Announced
Kayabon geothermal power plant	30	Geothermal	2026	Unknown	Announced

In addition, there is a 40-MW battery storage system planned in Daraga and a 30-MW system planned in Manito.

Renewable Energy Targets

Albay aims to source 100% of its power from renewable energy sources by 2030, which, with strategic legislative and regulatory steps, could equate to 10 GW installed by the end of the decade.

Renewable Energy Potential

Albay's Governor has stated that the Province has a technical untapped renewable energy resource of 988 GW, with most of its wind potential concentrated in Libon, Oas, Ligao, Guinobatan, Camalig, Daraga, Pio Duran, Legazpi, Batan, and Rapu-Rapu. Of this 988 GW, Albay has the capacity to produce 1.6 GW of renewable energy power, which is enough to power an estimated 1.2 million households for one year.

Bicol region has an estimated 10GW of renewable energy potential. The government of Albay, one of the provinces in the region, plans to unleash the capacity by 2030. The Province of Albay has a total potential of 1GW, with solar potential of 486MW and a wind potential of 502MW.

Potential impacts from renewable energy expansion

While not slated for Albay specifically, the Philippines broadly is planning for over 10 GW in hydropower additions in the coming decade. Hydropower generation is highly impacted by El Niño events in the Philippines, with hydropower in the Luzon system seeing a 22% decrease in March-May 2024 generation compared to the same period in 2023. Geothermal presents its own environmental risks, primarily through the release of hydrogen sulfide, carbon dioxide, and other gases that present public health risks to workers and nearby communities. Land-based wind and solar use considerable amounts of land which can require clearing of forests and fragment ecosystems, and offshore installations can stir up sediment, impact water quality, reduce dissolved oxygen in water, hinder solar rays reaching through the water column, and leach lubricants and other chemicals.

All of these physical impacts may trickle into social effects. Co-use of lands may lead to overexploitation and disruption of livelihood, and project development more broadly can encourage migration to the project area, increase financial and domestic burden, strain Indigenous communities' land and practices, physically and/or economically displace residents, and create incidents of potential forced labor.

Fossil Fuel in Albay

Fossil Resources and Retirement

On the whole, the Philippines's energy sector (excluding transportation) saw an increase of greenhouse gas emissions between 2010 and 2022. According to the most recent Philippine Energy Plan (2023-2050), this period of time saw overall sectoral emissions increase from 50.62 million tons of carbon dioxide equivalent (MTCO2e) to 100.3 MTCO2e (+82.8%). Emissions from electricity generation increased by 136.6%.

Projections and actual reductions, as published in the Philippine Energy Plan, are summarized in the table below:

Greenhouse Gas Emission Reduction by Sector in MTCOe. Adjusted from the Philippine Energy Plan 2023-2050, Volume III, pg. 12

Sector	2020 (NDC projected)	2021 (NDC projected)	2022 (NDC projected)	2020 (Actual)	2021 (Actual)	2022 (Actual)	2020 (% reduction)	2021 (% reduction)	2022 (% reduction)
Transformation/ Electric Generation	81.39	86.71	94.10	71.75	74.29	74.44	11.85%	14.33%	17.70%
Industry	15.99	16.82	17.69	11.34	12.50	12.94	29.09%	25.67%	26.84%
Other Sectors	12.51	13.08	13.69	11.35	12.13	9.88	9.27%	7.30%	27.86%
Total	109.89	116.61	125.48	94.44	98.92	100.26	14.06%	15.17%	20.10%
Transport	41.25	43.37	45.60	28.15	31.53	35.42	31.77%	27.29%	22.33%
Grand Total	151.14	159.98	171.08	122.58	130.45	135.68	18.89%	18.46%	20.69%

The Philippines has retired a total of 157 MW of coal-powered generation, all located in Cebu.

Current impacts from fossil fuel

The Air Quality Life Index estimates that a reduction in particulate matter 2.5 (PM2.5) pollution to World Health Organization guidelines would increase the average life expectancy in Albay by 0.75 years.

According to the Institute for Energy Economics and Financial Analysis, the USD $21 billion-worth of coal assets currently in the project development pipeline is at risk of becoming stranded, which would equate to wasting about a third of the Philippine Government's annual budget.

Employment

Albay's economy is primarily comprised of agriculture and fishing, and in rural areas, cottage industries like handicrafts dominate. Forestry, cement production, and paper-making are also significant industries, though to a lesser extent.

Current employment from the fossil fuel sector

Broadly, the Philippine energy sector employed 82,000 individuals in 2020, primarily in power generation (~60% of energy jobs). The Climate Investment Fund Accelerating Coal Transition Program's Investment Plan for the Philippines does not specify job statistics by generation type. Across the Philippines, liquid biofuels, solid biomass, and biogas employ an estimated cumulative 51,000 individuals (35,000 in liquid biofuels, 14,000 from solid biomass, and 2,000 from biogas).

Current employment from renewable energy

Among renewable energy generation technologies in the Philippines, geothermal employs the greatest number of individuals (12,000), followed by solar PV (7,000), and hydropower (6,000). As it stands, current renewable energy jobs pay an estimated PHP 20,000 (USD $364) to PHP 50,000 (USD $909) per month, depending on the specific role, compared to oil and gas's average salary of PHP 39,000 (USD $709) per month.

Prospective employment from the renewable energy sector

The International Renewable Energy Agency (IRENA) estimates that an investment of USD $150-250 million, coupled with appropriate training and education, could generate 7,000-10,000 direct and indirect jobs in solar PV manufacturing across the Philippines.

Supply Chain

While mining is a relatively small portion of the country's GDP, the Philippines is rich in several materials needed for the energy transition (generation as well as storage) including copper, cadmium, and nickel. Cobalt reserves in the Philippines are comparable to those of Russia (sixth overall, behind Australia, Cuba, Democratic Republic of Congo, and Indonesia). The Philippines is a member of the World Trade Organization with top trading partners being the United States, Japan, China, and Singapore. Additionally, in 2022, the Philippines and South Korea agreed to coordinate supply chain development and expansion, particularly related to mining of necessary metals and manufacturing electrical vehicles and semiconductors.

The Renewable Energy Act allows solar photovoltaic (PV) modules and ancillary components to be imported duty-free, though components for wind and hydro projects tend to have tariffs ranging from 3-5%, as well as a 12% Value Added Tax. This is because wind and hydro components tend to have locally produced counterparts, whereas solar does not.

In 2022, the Philippines and a dozen partners (Australia, Brunei, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, Singapore, Thailand, the United States, and Vietnam) established the Indo-Pacific Economic Framework for Prosperity. This Framework intends to increase collaboration between partners on efforts to increase the connectivity, resilience, fairness, and sustainability of the nations' collective economies. In total, these nations make up approximately 40% of global GDP.

Land availability

The Albay Biosphere Reserve. Originally published by UNESCO.

Map of Mt. Mayon
The volcano lies approximately 350 kilometers southeast of Manila on the eastern side of the Province. Image was originally published by researchers at the Philippine Institute of Volcanology and Seismology and the Univesity of the Philippines - Open University in their paper titled "Moving for safety: a qualitative analysis of affected communities’ evacuation response during the 2014 Mayon Volcano eruption."

Topographic map of Mt. Mayon
The volcano's Permanent Danger Zone lies at 6 kilometers and the Extended Danger Zone lies at 7 kilometers. The southeast quadrant of the volcano is considered a High-Risk Zone following an eruption in 1984. Image was originally published by researchers at the Philippine Institute of Volcanology and Seismology and the University of the Philippines - Open University in their paper titled "Moving for safety: a qualitative analysis of affected communities’ evacuation response during the 2014 Mayon Volcano eruption."

Mount Mayon, the Philippines's most active volcano, is located in Albay. Volcanic activity is common, so a Permanent Danger Zone (PDZ) with a radius of 6 kilometers from the crater was established to limit access to high-risk areas. Thousands of individuals reside in 29 baragays within the PDZ who are forced to evacuate when activity picks up, though many are resistant to leaving their homes, livestock, and livelihoods behind, citing a lack of adequate resources and opportunities for evacuees.

Albay contains two other volcanoes: Mt. Malinao, which has the Tiwi geothermal field at its base, and Mt. Masaraga, which has not had any recorded volcanic activity in over 10,000 years and does not have any existing or in-development geothermal projects associated with its system.

Albay Biosphere Reserve

The Albay Biosphere Reserve was established in 2016 to help protect 182 terrestrial plant species, 280 terrestrial fauna species (including 14 on the IUCN Red List), 12 species of mangrove species, 40 types of seaweed and macro-algae, 10 species of seagrass, and 272 species of marine species. It also contains Mount Mayon National Park, the MVNP and Mt. Masaraga Watershed Forest Reserve, and the Pocdol Mountain Range.

The entire Reserve spans 247,920 hectares and includes human settlements totaling ~1.2 million inhabitants. Three indigenous groups, the Agta Cimarron, the Agta Tabangnon and the Tabo, have communities within the Reserve. The Reserve is broken into Core, Buffer, and Transition that allow for different levels of land uses and overall impact.

Civil Society Engagement

Philippine Climate Justice Movement (PCJM): Established in 2009 to uplift community demands and advocate for drastic emissions reductions and comprehensive just energy transition. PCJM manages campaigns in the areas of Building Safe, Sustainable, Resilience Communities; Climate Emergency; Energy; and Food, Land, Water, and Climate Change, and in February 2024, PCJM signed a memorandum of understanding (MOU) with the Government of Albay to collaborate on increasing the Province's energy resilience.

The Solon Project: Volunteer organization lobbying for people-centered policies on the provincial and national levels in the Philippines. The Solon Project was instrumental in the passage of the Albay Energy Efficiency and Conservation Ordinance and the Albay Active Transport Act.

Greenpeace Philippines advocates for increased renewable energy deployment across the country while holding polluters and fossil fuel financiers accountable. They also publish reports outlining analyses and recommending strategies for the energy transition, namely Decarbonize Meralco.

Based in the Philippines, the Institute for Climate and Sustainable Cities (ICSC) works with other international climate and energy policy actors, particularly those in Asia, to advance climate justice and low-carbon and resilient development. ICSC’s publications include Luzon Power Outlook: Reviewing the Adequacy of Power Supply for April to June 2023 and Towards and Affordable and Reliable Grid with Energy Transition (TARGET).

The Climate Reality Project Philippines manages the RE Energize PH program, which aims to foster greater awareness of the social and economic impacts of fossil fuels and empower Philippine communities through renewable energy deployment. Beyond the program, the Climate Reality Project Philippine Branch works with local, provincial, and national stakeholders to advance climate initiatives and ensure local perspectives are included in national environmental planning.

Spanish colonization of the Philippines brought Catholicism to the archipelago, with the majority of current Albayanos described as "devout." With this in mind, faith-based organizations across the Province may have an outsized influence in reaching community members.

Governmental information

Relevant departments, commissions, and decision-makers

Climate Change Commission: The "lead policy-making body of the government tasked to coordinate, monitor and evaluate government programs and ensure mainstreaming of climate change in national, local, and sectoral development plans towards a climate-resilient and climate-smart Philippines." The Commission takes an evidence-based approach, coupled with stakeholder engagement and coordination, to drive the Philippines toward a sustainably developed future.

Local Elected Officials in Albay (Term: 2022-2025)

Jurisdiction	Position	Name
Province of Albay	Provincial Governor	Edcel Greco Alexandre Lagman
Province of Albay	Provincial Vice-Governor	Baby Glenda Bongao
District 1	Sangguniang Panlalawigan Member	Reynaldo Bragais
District 1	Sangguniang Panlalawigan Member	Victor Ziga Jr.
District 1	Sangguniang Panlalawigan Member	Shiena Marie Onrubia-Dela Cruz
District 2	Sangguniang Panlalawigan Member	Vicente Baltazar III
District 2	Sangguniang Panlalawigan Member	Melissa Amedilla
District 2	Sangguniang Panlalawigan Member	Raul Rosal
District 3	Sangguniang Panlalawigan Member	Jesus Salceda Jr.
District 3	Sangguniang Panlalawigan Member	Gerardo Palmiano
District 3	Sangguniang Panlalawigan Member	Dante Arandia
District 3	Sangguniang Panlalawigan Member	Eva Josephine Ribaya
Bacacay	Municipal Mayor	Armando Romano
Camalig	Municipal Mayor	Carlos Irwin Baldo Jr.
City of Legazpi	City Mayor	Carmen Geraldine Rosal
City of Ligao	City Mayor	Fernando Gonzalez
City of Tabaco	City Mayor	Cielo Krisel Lagman-Luistro
Daraga (Locsin)	Municipal Mayor	Carlwyn Baldo
Guinobatan	Municipal Mayor	Paul Garcia
Jovellar	Municipal Mayor	Jorem Arcangel
Libon	Municipal Mayor	Wilfredo Maronilla
Malilipot	Municipal Mayor	Cenon Volante
Malinao	Municipal Mayor	Sheryl Bilo
Manito	Municipal Mayor	Rebecca Chen
Oas	Municipal Mayor	Domingo Escoto Jr.
Pio Duran	Municipal Mayor	Alan Arandia
Polangui	Municipal Mayor	Raymond Adrian Salceda
Rapu-Rapu	Municipal Mayor	Dick Galicia
Santo Domingo	Municipal Mayor	Joseling Aguas Jr.
Tiwi	Municipal Mayor	Jaime Villanueva

Related governmental policies and papers

State of Climate Emergency: Declared in Albay in October 2023, the declaration includes five pillars of action:

• Fostering RE investment and development
• Discouraging fossil fuels, particularly the development of liquefied natural gas
• Encouraging advanced planning from local financial institutions to ease the transition from fossil fuels to renewables
• Circularity and sustainable development across sectors
• Passing and reforming legislation to aid in local climate action planning

Albay Province Renewable Energy Roadmap Project: Collaborative between ICLEI Southeast Asia and the Philippine Movement for Climate Justice to support provincial leaders in strategizing Albay's energy transition toward renewable power. The plan will be "investment ready" with the intention of fostering more financing options for local energy projects. This effort is in coordination with the Albay Renewable Energy Technical Working Group.

Albay Energy Efficiency and Conservation Ordinance: Provides a framework for creating, implementing, and delegating responsibilities for policies related to energy efficiency, conservation, and the proliferation of renewable energy in Albay.

Albay Active Transport Act: Aims to increase usage of green mobility options by allocating funding for bicycle lanes, walking paths, and complementary infrastructure to maximize safety.

Electric Power Industry Reform Act (EPIRA) of 2001: Landmark piece of legislation targeting the Philippines’ energy market. While previous state-owned, EPIRA opens power generation to a competitive market as a means of driving down the price of energy and increase access for underserved consumers. EPIRA yielded several achievements:

• Improved reliability of electricity
• Increased number of electrified households
• Improved generation and transmission efficiency
• Improved fiscal condition of the country’s power sector.

Green Jobs Act of 2016: Called on the Philippine Department of Labor and Employment to draft a plan to build a workforce for the energy transition. Through the legislation, businesses can receive tax incentives for the development of skills training and research efforts intended to fill the workforce gap.

Omnibus Guidelines Governing the Award and Administration of Renewable Energy Service and Operating Contracts and the Registration of Renewable Energy Developers (2019): Clarifies the process for permitting renewable energy processes given the establishment of the Department of Energy's of an Energy Virtual One-Stop Shop for licensing.

Philippine Energy Plan, 2023 to 2050 (2023): Published in November 2023, the Plan has three primary goals: 1) increase access to affordable energy, 2) improve reliability and resilience, and 3) expand adoption of clean energy across the country. These goals will be achieved through several strategies, detailed below:

• Renewable Portfolio Standards of 1-2.52%
• Renewable energy projects (geothermal, biomass, solar, wind, ocean, and tidal energy) may now be 100% owned by foreign entities. In allowing 100% foreign ownership of renewable energy projects, foreign entities can benefit from several incentives intended to support renewable deployment such as the existing feed-in tariff program, a seven-year income tax holiday, and tax exemptions for carbon credits generated via renewables.
• Streamlined compliance pathways for offshore wind activities
• Rapid grid expansion
• Establishment of the Energy Virtual One-Stop Shop System for permitting
• Decarbonization of transportation sector

Relevant governmental ministries and political coalitions

The Government of Albay signed MOU with the Philippine Movement for Climate Justice to help build local resilience through the development of reliable energy resources.

A Governor-ordered Albay Renewable Energy Technical Working Group will create a renewable energy roadmap. Comprised of Albay's Sangguniang Panlalawigan, provincial department heads, and community-based organizations, the working group will identify renewable energy resources and scope their development, with the ultimate goal of improving electric reliability.

Permitting

As of 2020, the Philippines adopted a moratorium on the issuance of permits for new coal construction projects.

Environmental Impact Assessment process in the Philippines. Pulled directly from the Philippine Energy Plan 2023-2050, Volume III:
- Screening determines if a project is covered or not covered by the PEISS, while Scoping identifies the most significant issues/impacts of a proposed project, and then, delimits the extent of baseline information to those necessary to evaluate and mitigate the impacts;
- EIA Study involves a description of a proposed project and its alternatives, characterization of the project environment, impact identification and prediction, evaluation of impact significance, impact mitigation, and formulation of Environmental Management and Monitoring Plan to come up with an EIA Report;
- Review of EIA Report normally entails a procedural screening for compliance to minimum requirements specified during Scoping, followed by a substantive review composed of third party experts;
- Decision Making covers evaluation of EIA recommendations and the draft decision document; and,
- Monitoring, Validation and Evaluation/Audit stage assesses performance of the proponent against the ECC and its commitments in the Environmental Management and Monitoring Plan to ensure actual impacts of the project are adequately prevented or mitigated.

A 2017 Executive Order intended to reduce the timeline for permitting large-scale energy projects. Previously, the permitting process took approximately 1,340 days and 359 signatures across 74 different agencies. The EO states that permits for Energy Projects of National Significance must be approved within 30 days. A lack of response within that timeline signifies approval by the relevant agency. This legislation does not affect all projects; only those with a capital investment of at least PHP 3.5 billion (USD $70 million), significant economic impact, significant impact on the environment, complex technical and engineering needs, and significant infrastructure requirements qualify. In general there are four categories of energy projects:

1. Environmentally Critical Projects, which have high risks associated with their development
2. Projects in Environmentally Critical Areas, which are located in sensitive areas
3. Projects not classified in either category above that directly address environmental concerns
4. Projects that are designated unlikely to cause adverse impacts

Environmental Impact Assessments (EIA) outline the existing environmental and social characteristics of a potential project location and analyzes how those conditions may change as a result of the project. The EIA also presents mitigation strategies and monitoring plans to minimize adverse impacts to the greatest extent possible.

Renewable energy projects undergo a slightly different permitting process than conventional energy sources. During the Registration and Application phase, project developers must collect a Certificate of Endorsement from the Department of Energy; Certificate of Registration of the Securities and Exchange Commission; Certificate or Registration from Bureau of Internal Revenue; and Barangay Clearance and Municipal Business Permits from local government units. Developers must also submit a Letter of Intent; application, processing, and signing fees; and multiple sets of application documents. During Pre-Development, projects must collect a renewable energy service or operating contract; a Certificate of Endorsements for other Agencies (besides DOE); a Certificate of Non-Overlap/Environmental Compliance Special Land Use Permit, Forest Land Use Agreement, and Tree-Cutting Permit; a Power Supply Agreement; a Certificate of Non-Overlap or Certificate Precondition; Land Use Conversion with endorsements from several agencies; a Resolution of Support; Availment of fiscal incentives; Water permits and water rights agreements; Right-of-Way agreements, and height limitation clearance as necessary. Projects must also complete a System Impact Study, a Facility Study, a Distribution Impact Study, and a Distribution Asset Study during this phase. During the Conversion phase, the developer must complete a Declaration of Commerciality and Application of Conversion, as well as receive a Certificate of Confirmation of Commerciality. The Development phase consists of construction and commissioning. During Development, a developer must collect a Renewable Energy Development Service Contract and Certificate of Endorsement; Building, Electrical, and Location permits; a Connection Agreement; a Certificate of Compliance; a Renewable Energy Payment Agreement; and a Power Purchase Agreement and Renewable Energy Supply Agreement. Developers must also complete a Transmission Service Application and WESM Registration and must be OSH compliant.

In early 2024, The Energy Regulatory Commission (ERC) of the Philippines announced measures to streamline the permitting process for solar home systems (SHS), ahead of this year's El Niño season. The ERC is rolling out a one-stop-shop and a partnership with the Landbank of the Philippines to provide financing support.

Lengthy permitting timelines, often multiple years long, are a major obstacle to renewable energy development, and several pieces of legislation have been passed in an effort to make the process easier. The Ease of Doing Business and Efficient Government Service Delivery Act mandates the use of a one-stop-shop and standardized business application forms to streamline permits and clearances. The Energy Virtual One Stop Shop is an online platform that allows developers to submit, and regulators to process and monitor, permit applications. Even off-grid projects must undergo this process.

Transmission

Transmission system updates, specifically construction and operation of both transmission and distribution components, are governed by the Electric Power and Industry Reform Act of 2001, or EPIRA. TransCo holds a monopoly over the high-voltage network in the Philippines, with NGCP as the Transmission Network Provider (TNP).

Current transmission resources

The Albay Electric Cooperative (ALECO) manages all distribution services within Albay. ALECO took over these responsibilities from the Albay Power and energy Corporation (APEC) following an audit detailing the latter's "deficiencies in performance," namely large system losses and inefficiencies.

Distribution utility profile for the Albay Electric Cooperative (ALECO) and Albay Power Energy Corporation (APEC), as of 2016. Originally published by the Department of Energy of the Republic of the Philippines.

New transmission needed for renewables

Grid upgrades affecting Albay

The Transmission Development Plan 2023-2040 lists the following projects impacting Albay:

• The Eastern Albay 69kV transmission line project aims to increase grid reliability and support eco-tourism developments along the eastern coast. The project has two phases: Stage 1 will see the development of the of load-end substations (LES) along with a 10 MVA, 69/13.8 kV transformer and Single-Circuit 69 kV transmission line. Stage 2 will involve developing an 18-km Single-Circuit transmission line rated at 69 kV. The project is expected to be complete by September 2024.
• South Luzon 230 kV Substation upgrade 1 will address existing overload by replacing older power circuit breakers and reconfiguring the existing substation for increased flexibility.
• South Luzon 230 kV Substation upgrade 2 will prepare for expected load growth by installing transformers, capacitors, and power circuit breakers.
• The Daraga-Bitano 69 kV Transmission Line, once completed in late 2030, will accommodate industrial and commercial load growth in Albay. It includes the construction of a Single-Circuit 69 kV transmission line and will stretch for 6 kilometers. Finally, three substations in Albay will be upgraded to improve system reliability and prepare for expected load growth.
• The Luzon Voltage Improvement Project 4 will address undervoltage challeges by installing capacitor banks throughout South Luzon.
• Tower Resiliency of Bicol Transmission Facilities will replace all existing steel towers of Naga–Tiwi– Daraga, Daraga–Tublijon and Naga–Labo transmission lines to better withstand typhoons.
• The Naga–Tublijon 500 kV Transmission Line Project will improve resiliency by upgrading the existing 230 kV system transmission line to 500 kV.
• The South Luzon 69 kV transmission line and South Luzon substations will be upgraded.

Social and environmental impacts of new transmission

Blackouts and brownouts are fairly common in Albay, due largely to corrective maintenance, significant debt owed by the Albay Electric Cooperative, and aging infrastructure. Strategic and well-planned transmission additions and upgrades would reduce incidences of outages.

Ownership

Major owners of current fossil capacity

No utility-scale coal-fired generation is located within Albay, though across the Philippines, a few entities own the majority of operating coal power plants. These entities are:

• Aboitiz Power Corporation
• DMCI Holdings Inc.
• Manila Electric Co.
• Power Partners Ltd Co.
• San Miguel Corporation
• Vivant Corporation

Similarly, the majority of utility-scale oil and gas-powered generation in the Philippines is owned by a select few companies:

• Aboitiz Power Corporation
• First Generation Holdings Corporation
• Millennium Energy Inc.

Major owners of prospective renewables

The Philippine Geothermal Production Co. Inc. (PGPC) owns the announced Mt. Malinao geothermal power plant and is experienced in navigating local permitting and engagement processes.

While Albay lacks utility-scale wind and solar installations, several companies own significant renewable capacity across the Philippines, namely:

• AC Energy Corporation
• CleanTech Global Renewables
• Copenhagen Energy
• Copenhagen Infrastructure Partners
• Energy Development Corporation
• Skyborn Renewables
• Triconti ECC Renewables Corporation
• UPC Renewables

Finance

The Philippines is one of four recipients of Japan’s Asia Zero Emission Community initiative, which will provide USD$8 billion for energy projects by 2030.

In 2016, the Philippine Ministry of Finance released a directive against investing in companies wherein more than 30% of their income is from power production and more than 30% of their income is from coal-fired generation. Many companies operating in the Philippines manage to evade this regulation by nature of their being conglomerates with large, diverse business interests. BlackRock and Norges Bank Investment Management both fall into this category.

Potential providers of wind/solar finance

A collective ₱84 billion, approximately USD $1.5 billion, was pledged across six investors to support development of 1,250 MW of renewable energy, consisting of 200 MW solar in Pio Duran, 20 MW solar in San Miguel, 100 MW wind in the Albay Gulf, and 50-60 MW wind in Pio Duran. Investors included in the pledge are AltEnergy Corporation, Mantex Services, SPIC China Corporation, Power Energy Corporation, Energy China, and Santa Clara International.

The World Bank, International Finance Corporation (IFC), and Asian Development Bank (ADB) are all active in the Philippines's efforts to transition away from coal.

• The Asian Development Bank has several active projects in the Philippines, such as a technical assistance cluster intended to transition to low-carbon health systems and technical assistance to support decarbonization in maritime and industrial sectors. A proposed project would see the ADB help the Government of the Philippines strengthen public-private partnerships. The ADB committed over USD $4.5 billion to the Philippines in 2023, with cumulative loans, grants, and technical assistance packages totaling USD $34.3 billion since the ADB began working in the country.
• The World Bank has provided financing via the Philippines First and Second Sustainable Recovery Development Policy Loans. Totaling USD $1.5 billion, both loans are intended to boost sustainable economic growth and improve climate resilience and environmental protections. The program was designed in alignment with the Philippine Development Plan 2023-2028.
• The International Finance Corporation has collaborated with international actors like the European Union on their Global Gateway Initiative, which includes the Green Economy Programme for the Philippines (GEPP). Through GEPP, IFC and the EU are working to mobilize local private capital and achieve four primary goals: 1) enhance waste management, 2) advance the Philippines toward a circular economy, 3) accelerate renewables development, and 4) promote energy efficient technologies.

Southeast Asia Energy Transition Partnership

The Philippines is part of the Southeast Asia Energy Transition Partnership, which aims to leverage philanthropic and government funding to accelerate the energy transition in the region. ETP is providing funding to nine projects in the Philippines:

• Demand Side Management Policy
• ESCO-in-a-Box
• Investment Grade Audit Program
• Offshore Wind Development
• Philippines Grid Diagnostic and Roadmap for Smart Grid Development
• Power Sector Development Roadmapping in Bangsamoro Autonomous Region in Mindanao
• Smart Grid Transformation in the Power Distribution Sector
• Upgrading Design and Implementation of the Energy Battery Storage Market Mechanism of the Philippines Electricity Market Mechanism
• Upgrading Energy Regulations for the Energy Regulatory Commission of the Philippines

The Philippines has also indicated that leaders are meeting with Just Energy Transition Partnership donor countries.

Additionally, in 2016, the Philippines received financial support from the Swedish International Development Cooperation Agency and the Regular Budget Supplementary Account of the International Labour Organization to roll out the "Guidelines on Just Transition towards Environmentally Sustainable Economies and Societies" pilot project, which was intended to coordinate government agencies and other stakeholders to build capacity and conduct analysis on green jobs and their environmental, economic, and labor impacts. Ghana and Uruguay were also sites of this pilot project.

Other

The Feed-in Tariff System (FiT), established by the Renewable Energy Act of 2008, guaranteed a fixed purchasing price for energy generated by new renewable projects. While it is considered a non-fiscal incentive mechanism, FiT provides assurance to potential renewable energy developers that their projects will be financially feasible.

The Monetary Board of the Central Bank of the Philippines (Bangko Sentral ng Pilipinas) approved the creation of the Sustainable Finance Framework in 2020. The Framework encourages financing institutions to value potential climate and transition risk, as well as the resilience and carbon reduction value that may be generated through the proposed activity.

The Development Bank of the Philippines also operates the Financing Utilities for Sustainable Energy Development (FUSED) Program, which finances upgrades to the power generation and distribution system. FUSED provides funding for projects focused on development and construction of energy generation and mini grids, distribution and transmission projects, equipment upgrades, and increasing reliability and efficiency of rural power systems.