Will Renewable Energy Bring Our Electric Bills Down?
- June 4, 2026
Table of Contents
Speaking at the 2026 Energy Forum of the Economic Journalists Association of the Philippines (EJAP), Department of Energy (DOE) Secretary Sharon Garin underscored the growing role of energy in nation-building, calling it a cornerstone of resilience, economic stability, and inclusive development.
“Energy security is inseparable from national security,” she stated.
But the country’s energy security was tested from May 13 to 15, when yellow and red alerts were declared across Luzon and the Visayas, exposing the vulnerability of the power system amid tight supply conditions.
To prevent wider outages, grid operators implemented manual load dropping six times, resulting in rotating brownouts for affected consumers. During the same period, electricity prices in the Wholesale Electricity Spot Market (WESM) repeatedly reached the ₱32,000-per-megawatt-hour (MWh) ceiling.
The disruptions darkened homes, forced hospitals to switch to backup generators, and deprived small businesses of revenues they could not recover.
(Also read: Indonesia’s Coal Policy Shift Raises New Risks To Philippine Power Security)
Why Solar and Wind Costs More
According to Meralco, consumers may face higher electricity bills in June 2026 as a result of the power alerts, which further push prices higher by tightening supply and increasing demand. Because Meralco sources about 10 to 15% of its power requirements from WESM, spikes in spot market prices can affect generation charges, making another increase in June billing likely.
For Center for Energy Ecology and Development (CEED) Executive Director Gerry Arances, high electricity bills are largely driven by the country’s sourcing mix. “Dito pumapasok ang 50 to 70% ng bill natin—at ito yung pinaka-bill shock talaga” (This is where 50 to 70% of our bill comes in, and this is really what causes the biggest bill shock), he said during a radio interview.
In the Meralco franchise area, he noted, electricity supply remains heavily dependent on fossil fuels, particularly natural gas and coal, which account for more than 80% of the mix. Because much of this fuel is imported, Arances said fluctuations in the peso directly increase generation costs, ultimately pushing up consumer bills.
“Mare-reduce significantly ang presyo na andyan ngayon kung lahat yan ay ita-transition natin to renewable energy, (RE)” (The current prices can be reduced significantly if we transition everything to renewable energy), he insisted, adding a caveat. “Pero di ‘yun simple.” (But it’s not that simple.)
And it is precisely this complexity that led renowned energy economist Dr. Lars Schernikau to point out that “when it comes to the cost of energy, the answer is a simple one: electrification relying on wind and solar technology is the most expensive, and it gets more expensive the more wind and solar you utilize in the system.”
He referred to system costs as a key reason behind the overall expense, explaining that wind and solar can be expensive not just because of the technology itself, but because additional power system costs are needed to make their intermittent output usable for the grid. These include expenses for balancing supply and demand, backup capacity, and other infrastructure needed to ensure reliability.
Grid-ready electricity depends on several key conditions that ensure power can be safely and reliably delivered to users. These include stable voltage, which refers to the electrical pressure in the system, steady frequency that keeps supply and demand in balance, and proper phase alignment so generators work in sync at all times. It also requires controlled current, or the actual flow of electricity through the grid, as well as overall system strength, which determines how well the grid can handle fluctuations and disturbances.
Keeping these five requirements in mind, Schernikau argued that wind and solar power alone cannot consistently deliver grid-ready electricity. He said they depend on additional supporting systems to stabilize the grid and ensure reliability, and these added layers of infrastructure and services are what he calls “system costs” in integrating renewables into the power system.
“Even institutions such as the OECD (Organization for Economic Cooperation and Development) and UNECE (United Nations Economic Commission for Europe) now admit that as the share of wind and solar increases, total system costs rise,” Shcernikau wrote. ”These technologies require additional infrastructure such as vast overbuild, backup capacity, storage, and expanded grids, while also reducing system stability and market value… In other words, the more wind and solar are deployed, the more complex and costly systems become.”
During the congressional hearing on the red alerts, the National Grid Corporation of the Philippines (NGCP) cited the recent influx of RE as one of the factors placing additional strain on the grid.
“The incoming solar capacity is a welcome addition to our pool of energy sources,” said NGCP CEO Anthony Almeda. “But, as the sun begins to set, and solar power harvest starts waning, the system again loses much-needed capacity.”
The ERC also linked the red alerts to RE patterns, noting that solar output typically peaks around 2 p.m., helping support the grid during the hottest part of the day. But by 3 to 4 p.m., generation declines as sunlight fades, just as electricity demand rises in the evening.
Juan said the resulting red alerts, which stretched from late afternoon into midnight, point less to a lack of power plants and more to a lack of flexibility in the system. While the grid can manage peak solar output, it struggles to replace that supply once it drops. “We are not simply facing an afternoon and early evening shortage; we are facing a flexibility shortage in the hours after the sun goes down,” he explained.
In the Netherlands, grid congestion has become a major obstacle to the energy transition as solar PV capacity expanded fivefold between 2018 and 2023. Grid development has lagged behind rising electricity demand and distributed generation, leaving around 10,000 large users, including consumers and batteries, waiting for connection to the network by early 2025.
Additionally, in April 2025, Spain and Portugal experienced a major power outage that also affected parts of southern France, after a voltage imbalance triggered a cascading failure. At the time, Spain was generating about 59% of its electricity from solar, highlighting the operational challenges of managing grid stability in systems with high shares of intermittent renewables.
(Also read: Lawmakers Challenge DOE’s Energy Roadmap As Power Shortages Persist)
Renewables Driving Higher Electricity Bills
Electricity bills reflect not only power consumption but also government-mandated charges linked to energy policy, including RE.
Among these are the Feed-in Tariff Allowance (FIT-All) and the Green Energy Auction Allowance (GEA-All), both universal fees collected from all electricity users. The GEA-All funds RE development, while FIT-All supports earlier renewable projects through guaranteed rates. Under this system, developers are offered fixed prices often above market levels to encourage investment, with the difference recovered from consumers through their bills, effectively shifting price risk to end users while ensuring stable returns for investors.
“Yung GEA naman, in the next few years, maaaring tataas nang tataas as we try to encourage more investments in RE, particularly yung mga offshore and other technologies na malakihan, and which would mean na kakailanganin mo ng additional funds to be able to guarantee yung there will be any shortfall between what they earn sa market at saka yung what their price is based on the results of the auction,” (The GEA, in the coming years, may continue to increase as we try to encourage more investments in RE, particularly offshore and other large-scale technologies, which would mean needing additional funds to cover any shortfall between what they earn in the market and their auction-determined price) Juan explained.
The next phase of RE expansion, particularly offshore wind (OSW), highlights the cost pressures of the energy transition. The ERC has set a ₱11.00/kWh ceiling price under GEA-5, higher than the earlier ₱10.3859/kWh benchmark, reflecting updated cost assumptions and the demands of offshore development. Industry assessments also note that OSW is significantly more capital-intensive than other renewables due to its higher upfront infrastructure requirements.
During the congressional hearing on the red alerts, the National Grid Corporation of the Philippines (NGCP) warned that the system will remain vulnerable without sufficient baseload capacity and that continued shortfalls could lead to more frequent red alert conditions.
Baseload capacity refers to continuous, round-the-clock power generation that keeps the grid consistently supplied, serving as a critical backbone for maintaining stability and reliability in the electricity system.
Electrification Drives Power Demand
The future is clearly electric, shown by the rise of data centers and electric vehicles (EVs). In the Philippines, the Department of Energy (DOE) reported a 150% surge in EV adoption, alongside a sharp expansion in charging infrastructure, with registered EV charging points growing from 847 to 1,569.
But how can we power this future if a growing share of renewables is straining the grid, driving up electricity costs, and raising concerns over energy reliability?
The NGCP warned that the power system will remain vulnerable without sufficient baseload capacity, adding that continued shortfalls could trigger more frequent red alerts. Baseload capacity refers to steady, round-the-clock power generation from sources such as coal and gas, which serve as the backbone of the grid by ensuring a stable and reliable electricity supply.
Schernikau emphasized that coal, gas, nuclear, and hydro remain central to electricity systems because they provide the physical stability required for reliable grid operation, which he described as one of the most complex systems on earth. He added that these thermal power plants use large, synchronously rotating generators that deliver the key technical characteristics needed to keep the grid stable.
“The central takeaway is simple and often overlooked,” he declared. “Electricity is not just about producing kWh, but rather about delivering peak-power service, reliable, grid-ready power at all times 24/7/365. Any serious discussion about cost must reflect this reality.”
This is also why concerns are raised over integrating higher shares of variable RE without sufficient system flexibility. When supply becomes more intermittent and requires costly backup resources to maintain balance, short-term price volatility can increase, reflecting tighter supply conditions and system constraints in electricity markets.
As columnist Bienvenido Oplas put it, “the most expensive electricity is no electricity, a blackout.”
Sources:
DOE Sec. Sharon Garin, keynote address at the Economic Journalists Association of the Philippines (EJAP) Energy Forum 2026, Manila, Philippines, May 26, 2026.
ERC Chairman Francis Saturnino Juan, speech at the Economic Journalists Association of the Philippines (EJAP) Energy Forum 2026, Manila, Philippines, May 26, 2026.
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