Philippines hydropower developers seek to fast-track projects amid El Niño risks

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Philippines hydropower fast-tracking

Highlights

PhilHydro urges the Department of Energy to fast-track hydropower construction during the El Niño period, leveraging lower water levels to accelerate delayed projects.
The seventh Green Energy Auction program targets 175 megawatts of run-of-river hydropower in Mindanao for 2028–2031, with further auctions requested for Luzon, Visayas, pumped-storage, and impounding-dam projects.
Hydropower constitutes 12% of generation capacity as of December 2025, but potential output could drop up to 40% due to El Niño, pressuring renewable targets of 35% by 2030 and 50% by 2050.

Construction push and auction requests

As reported by BusinessWorld Online, PhilHydro Association President Francis Joel Arrieta Sayre urged the Department of Energy to help developers accelerate hydropower construction during the expected El Niño period. He said lower water levels are unfavorable for operating plants but could make construction work easier, creating an opening to advance delayed projects.

PhilHydro, which represents developers, owners, operators and technology providers including Aboitiz Power Corp. and First Gen Corp., also backs the Department of Energy's planned seventh round of the Green Energy Auction program. The round is set to include run-of-river hydropower projects, with an installation target of 175 megawatts in Mindanao for delivery from 2028 to 2031.

Mr. Sayre also calls for similar auctions in Luzon and the Visayas next year, followed by separate auctions for pumped-storage hydropower and impounding-dam baseload hydropower within the next two years. He says a medium- to long-term hydropower development roadmap aligned with the Philippine Energy Plan 2023-2050 would help companies plan new projects and expansions around future electricity offtake opportunities.

Power supply pressure and renewable energy targets

Hydropower remains an important part of the Philippines' power mix, accounting for about 12% of total installed generation capacity as of December 2025, based on Department of Energy data. But the department has previously said warmer temperatures could reduce hydropower generation by as much as 40%, as reservoirs and river systems face lower water availability.

The association argues that stronger policy support is needed as developers contend with global pressures including wars, oil market strains and political conflict that have inflated project costs and slowed unfinished developments. Mr. Sayre says hydropower can help the government reach its renewable energy targets of a 35% share by 2030 and 50% by 2050, if the sector receives enough support to move projects forward.

In our earlier article on Philippine sovereign bond market reforms, we outlined how the shift to a new pricing convention and the planned inclusion in J.P. Morgan’s government bond index could broaden the investor base and improve liquidity. We also noted that cheaper funding and stronger market activity won’t automatically translate into productive investment unless fiscal credibility holds and the government channels any savings into well-executed infrastructure and other competitiveness-boosting priorities.

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