While it is manifestly the major game in town for both local and foreign investors, Aboitiz Power Corporation is still seeing treacherous terrain when it comes to capital influx in the renewable energy (RE) sector.

In his presentation at the Smart Forum 2024 convened by the European Chamber of Commerce of the Philippines (ECCP), Aboitiz Power Chief Investment Officer Joseph Lacson highlighted that “while the potential benefits of a renewable energy future are immense, the path is fraught with many challenges.”

He similarly described the current RE business landscape to be characterized “by some degree of uncertainty, bureaucratic hurdles, and a shortage of skilled professional workers.”

Lacson thus emphasized that “a multifaceted approach is essential to our journey toward a renewable energy future.”

In particular, he called on the establishment of “a robust policy framework that encourages investment,” adding that such policy toolbox must integrate enticements for innovation so that these RE assets won’t just be relegated to technology obsolescence in the years ahead.

“Continuous research and development from the academe, scientists, and industry professionals are essential to enhance the competitiveness and efficiency of renewable energy technologies” he said.

Beyond that, the Aboitiz Power executive likewise cited the all-too-familiar hiccup of grid integration for RE capacities, which is now the focus of policy reinforcement and regulation improvements by relevant government agencies.

The project financing sphere, Lacson further noted, “plays a catalytic role in driving investments;” especially so since for the other technologies in the green energy sector -- primarily for gigawatt-scale floating solar and offshore wind projects -- banks and financial institutions are still navigating how to viably bankroll these developments.

Typically, lenders will just extend financing to projects with guaranteed revenue streams that are underpinned either by auction-linked tariffs or bilateral contracts with offtakers (capacity buyers); or those developments being advanced by companies that lean on the track record of cash-rich parent firms.

Lacson similarly reiterated the Aboitiz group’s continuous pitch for energy security, which at this time, is being addressed by the company with a new coal plant installation, especially for its investment play in the Visayas grid.

He expounded “with a projected annual growth rate of 5.19% in peak electricity demand and the need to sustain economic growth for development,” it remains highly necessary to have a “balanced utilization and maximization of traditional yet dispatchable energy sources like coal and natural gas.”

Aboitiz Power had cast 3,700 megawatts of additional RE installations until year 2030 – and what it delivered commercially versus target had been: the 159 megawatt-peak (MWp) Laoag solar and 94MWp Cayanga-Bugallon solar plants that are both sited in Pangasinan; then the 17MW Tiwi Binary geothermal facility in Albay; as well as its 24MW Magat battery energy storage system (BESS), which is its joint venture with Norwegian firm Scatec under subsidiary SN Aboitiz Power.

Next in its roll of RE projects completion are the 173MWp Calatrava solar project in Negros Occidental, the 45-MWp Armenia solar venture in Tarlac and the 212 MWp Olongapo solar farm in Zambales.

If reckoned from that list of RE projects, Aboitiz Power’s RE capacity addition to-date is just hovering at more than 700MW, hence, the company will still need to concretize roughly 3,000MW in its planned RE development pipeline for its targeted portfolio rebalancing.