Philippines geothermal sector seeks pricing reforms to drive investment

The Philippines' Energy Regulatory Commission (ERC) is implementing a Price Determination Methodology (PDM) to attract investment into the nation's geothermal sector. Presented during the 7th Philippine International Geothermal Conference, the framework aims to provide transparent, evidence-based pricing for projects under the Green Energy Auction Program (GEAP). The methodology, adopted under ERC Resolution No. 19, Series of 2024, accounts for project-specific parameters and distinguishes between new and binary geothermal projects to balance investor requirements with consumer protection.

However, geothermal developers are advocating for higher auction prices to increase industry participation. Jaime Jemuel Austria Jr., president of the National Geothermal Association of the Philippines (NGAP), noted that in a previous auction round (GEA-3), only 30 megawatts of a 100-megawatt capacity were taken due to pricing and incentive issues. The NGAP has formed a technical working group to identify barriers to participation ahead of the GEA-9 round.

This development is critical to the Department of Energy’s goal of achieving at least 35% renewable energy in the power generation mix by 2030 and 50% by 2040. To support these efforts, the government has established a de-risking facility providing P10.7 billion for exploration activities by qualified developers.