Japanese companies are entering the Philippines' renewable energy sector one after another. A Japanese startup and a JFE-affiliated company will partner with local companies to develop solar power generation and electricity retailing businesses. The Philippines is highly dependent on fossil fuels, making decarbonization an urgent issue.
Japanese companies are making successive moves to enter renewable energy development in the Philippines, and a Japanese startup and a JFE-affiliated company have announced plans to join forces with local partners on solar power generation and electricity retailing businesses. Through efforts to develop the local market, Japanese companies are expected to build new supply chains for renewable energy. Attention is focused on the future structure of these partnerships and the expansion of their business scale.
The Philippines has a high proportion of fossil fuels in its energy mix, making decarbonization an urgent priority. Depending on government policy trends and market reception, the entry of Japanese companies could contribute to increasing the share of renewables. The development of a competitive environment and local demand trends will be key areas of focus going forward.
According to the view of the UK-based think tank Ember, fossil fuels are expected to account for approximately 80% of the Philippines' power mix in 2025, while renewable energy will remain at approximately 20%. Against this backdrop, the expansion of renewable energy supply chains by Japanese companies in the Philippines could help ease the country's dependence on fossil fuels.
Overall, the entry of Japanese companies can be seen as an effort to capture local demand for renewable energy. Details of partnership agreements with local companies, as well as the results of technical and cost evaluations ahead of the full-scale operation of solar power generation and electricity retailing businesses, are expected to emerge.