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In late 2025 and early 2026, the Department of Energy (DOE) intensified its review of renewable energy (RE) service contracts, ultimately canceling and relinquishing hundreds of projects that failed to deliver their committed capacity. Between 2024 and 2025 alone, the agency terminated 163 contracts with a combined potential output of 17,904 megawatts (MW), citing non-performance, lack of responsiveness, and failure to meet contractual milestones.
A significant portion of the affected capacity was tied to Solar Philippines Power Holdings Inc. (SPPHI), founded by Batangas 1st District Representative Leandro Leviste. The company’s largely solar portfolio accounted for more than 11,427 MW, or about 64% of the total capacity covered by the terminations.
DOE Secretary Sharon Garin maintained that the agency followed due process by issuing show cause orders, requiring the renewal of performance bonds, and pressing developers to demonstrate progress before terminating the contracts. She added that Solar Philippines repeatedly failed to respond to the department’s notices and directives.
“We waited until last minute, hoping that they will deliver. They have failed to deliver. The last deadline was on December 25, 2025,” explained Garin, prompting the DOE to pursue up to ₱24 billion in penalties against the company, covering forfeited performance bonds and other financial obligations tied to the contracts.
This large-scale removal of undeveloped capacity sparked broader concerns within government and industry about how RE projects were awarded and implemented, raising questions about competition, auction design, and the overall mechanics of renewable energy development in the country.
(Also read: 8 Hard Lessons from Electric Cooperative Inefficiencies in Visayas)
Competition Impact Assessment of GEAP
According to a The Manila Times editorial, the DOE probably requested guidance from the Philippine Competition Commission (PCC) as its contract review drew public attention and raised potential competition concerns.
The PCC is an independent government agency that enforces the Philippine Competition Act to protect fair markets by preventing anti-competitive practices and reviewing mergers that could harm competition.
In January 2026, the PCC conducted a Competition Impact Assessment (CIA) of the Green Energy Auction Program (GEAP).
The GEAP was launched to help raise the share of RE in the Philippines’ power mix to 35% by 2030 and 50% by 2040, while mobilizing private sector participation to deliver competitively priced electricity. Launched in 2022, the program has held multiple rounds of bidding to secure new RE capacity, often targeting particular technologies and regional grids in each cycle. Four rounds have been completed, with a fifth currently ongoing. The program has drawn significant interest and helped expand the country’s RE portfolio, but it has also faced challenges from speculative or non-serious bids.
A significant share of the stalled or noncompliant RE contracts has been linked to Solar Power Philippines Holdings Inc. (SPPHI) and its affiliates. Founded in 2013, the company dominated the first GEAP round in 2022, securing over 83% of the total capacity awarded. However, delays and abandoned projects under SPPHI have sparked questions about the program’s oversight and the balance of opportunities for other developers.
Meanwhile, the PCC’s CIA identified certain design elements that could have hindered competition and potentially limited bidder participation:
Geographic segmentation by island group
The GEAP offered RE capacity in separate blocks for Luzon, Visayas, and Mindanao. While this structure reflected the realities of the country’s grid and regional supply needs, it may have inadvertently limited competition. Smaller developers, for instance, might have preferred larger or cross-island packages, reducing the number of active bidders in each round. At the same time, the approach appeared to favor companies with established regional footholds, which prevents the auction framework from allowing for a more balanced and competitive field across the national market.
Representative plant designation
PCC economists highlighted the potential weakness in the selection of “representative plants” used to set reserve prices. If these benchmarks favor specific technologies or plant configurations, developers with different cost structures could be at a disadvantage, potentially discouraging participation. Ensuring a diverse and balanced set of representative plants is critical not only for fair pricing but also for maintaining a level playing field that allows a wider range of bidders to compete on equal terms.
Publication of price caps and pre-bid conference practices
The design of the GEAP also underscored how price signals and market information can shape bidder behavior. Restrictive or poorly set price caps could discourage competitive bidding, limiting the program’s ability to reflect true market costs. At the same time, the timing and conduct of pre-bid conferences were crucial for helping developers—particularly smaller or newer entrants—understand auction rules and requirements. Insufficient guidance or delayed engagement could reduce participation and give an advantage to more established companies with greater experience and resources.
The CIA did not provide detailed recommendations but emphasized the need for scrutiny of future auction frameworks. Analysts said that upcoming designs should balance two key objectives: securing the most competitive energy tariffs for consumers and accelerating the growth of RE within the country’s power generation mix. By aligning policy goals with practical auction mechanics, regulators can help ensure that future rounds attract genuine participation while optimizing cost efficiency and market fairness.
However, The Manila Times questioned the CIA’s critique of the GEAP, noting that “these features of the GEAP are necessary to carry on the program” and that even in setting baseline rates, DOE’s role is one “where even here DOE’s hands are tied to some extent.”
The editorial further argued that geographic segmentation is justified, with DOE focusing on certain areas “to address local supply needs and reduce service delivery concerns,” reflecting the practical realities of RE siting.
On the matter of price caps and pre-bid conferences, the editorial emphasized that transparency is essential, calling it “unfathomable how an auction could take place without those” to ensure bidders can make informed decisions.
“All of this raises a troubling question: Is the GEAP, which has been a good driver of RE development in the country, fundamentally anticompetitive?” ended the commentary.
Offshore Wind Complexities
Another controversy in the local RE sphere is the GEAP 5, which targets bottom-fixed offshore wind (OSW). The editorial noted that “the Philippines does not as yet have anything that can be used as a benchmark,” highlighting the challenges of setting reference points for a technology still new to the country.
OSW stands out as the most capital-intensive renewable energy technology. The Global Wind Energy Council (GWEC) estimates that developers must invest $3 to $4 million per MW of installed capacity. In the Philippines, the Energy Regulatory Commission (ERC) reports OSW costs at around ₱14 per kilowatt-hour (kWh)—nearly three times higher than some solar PPAs.
Bureaucratic hurdles remain a major challenge for OSW. Developers must navigate more than 80 permits, often coordinated across over 25 different government agencies, creating a complex and time-consuming process that slows project rollout.
Additionally, OSW requires substantial technical and infrastructure preparation, from port readiness and specialized installation equipment to coordinated grid integration planning, adding layers of cost and logistical challenge compared with onshore renewables. The DOE recently released a guidebook for OSW developers, covering everything from regulatory approvals to best practices in marine spatial planning, environmental impact assessments, and community consultations to help ensure projects meet both legal and social requirements.
Another challenge is the lack of established domestic pricing benchmarks for OSW, with regulators only recently proposing a draft auction reserve price for GEA‑5—a step that highlights lingering uncertainties in cost expectations for this nascent sector.
(Also read: Offshore Wind’s Reckoning: Why this RE Is Faltering)
Why Competition Matters in Energy Markets
Competition in energy markets is central to securing cost-efficient power, driving innovation in generation technologies, and protecting consumers. Without competitive pressures, a handful of dominant players can capture capacity without guaranteeing delivery or exploit pricing power to extract higher returns. In RE auctions, broad participation not only improves price discovery but also diversifies project ownership, reducing the risk that delays or nonperformance by a single entity will disrupt supply.
The challenges seen in previous GEAP rounds, including stalled capacity and the DOE’s subsequent contract terminations, underscore the importance of transparent, well-designed auctions. Ensuring healthy competition is critical if the Philippines is to meet its RE targets while keeping tariffs fair and encouraging responsible, reliable project execution.
Expanding competition within the GEAP remains a complex task. While broader participation could improve price discovery and project diversity, the program must also balance this with the national goal of raising RE’s share to 50% of the power mix by 2040.
Sources:
https://manilastandard.net/business/314690779/doe-cancels-leviste-firms-33-contracts.html
https://www.phcc.gov.ph/about-us/about-the-pcc
https://www.pna.gov.ph/articles/1243893
https://mb.com.ph/2025/12/08/who-wants-to-pay-14kwh-for-offshore-wind
https://solaren-power.com/solar-energy-philippines-future-of-energy
https://www.philstar.com/business/2026/01/19/2501877/why-green-energy-way-harder-it-looks
https://context.ph/2025/12/14/erc-sets-reserve-price-for-offshore-wind-auction