Renewable energy sources like solar and wind are intermittent: electricity generation dips when the sun isn’t shining, or the wind isn’t blowing. Unlike traditional coal-fired plants that operate at a constant load for long periods—making them less adaptable to fluctuations in renewable output—balancing power plants can start, stop, and adjust their output rapidly to fill gaps in energy production. This flexibility is critical as the share of renewables grows, enabling the grid to function reliably and efficiently.

They do support renewable energy, but they are not just idle backups. Balancing power plants can operate multiple times a day, typically for fewer hours overall (with capacity factors of around 20–30%). Because they only run when necessary, project developers avoid overinvesting in solar or battery capacity, ultimately reducing both costs and land-use requirements.

A system that relies exclusively on solar, wind, and battery storage can be more expensive and less efficient. Wärtsilä’s Crossroads to net zero report shows that without balancing power plants, countries risk generating more energy than can be stored and used, leading to waste. The system would also require significantly more battery capacity, which increases costs and takes up additional space.

Wärtsilä’s modelling suggests that using a combination of solar, energy storage, and balancing power plants could save the Philippines around USD 9 billion per year compared to relying solely on renewables and storage. It can also reduce emissions by up to 75% by the mid-2030s.

Yes. Countries like the United States and Australia have been early adopters of balancing power plants. These nations integrated large amounts of renewable energy into their grids and quickly realized the need for balancing technologies to prevent energy shortages and maintain grid stability.

Under the Philippine Energy Plan 2020-2040, the Philippines targets:

• 35% renewable energy by 2030
  
• 50% renewable energy by 2050

To reach these ambitious goals, it is essential to accelerate the deployment of solar and wind power. Currently, the installed solar capacity is below the desired target (with about 3.5 GW installed when roughly 5 GW are needed each year). A balanced approach that includes flexible power plants will be key to bridging this gap and ensuring the efficient use of generated renewable energy.

The Philippines should take several key steps:

• Accelerate renewable energy deployment: As we aim for around 5 GW of solar capacity additions annually to meet or exceed NREP target, policies should be designed to incentivise renewable energy projects, facilitate land acquisition for RE developers, and improve grid access for renewable installations.
• Plan for balancing capacity: Introduce market mechanisms and incentives that encourage investments in flexible power plants.

According to multiple independent studies (e.g., by BloombergNEF), solar and wind have become among the cheapest sources of electricity. While upfront costs for large-scale solar farms or LNG infrastructure can be substantial, the long-term savings in fuel costs, plus reduced carbon emissions and lower environmental impact, make renewables and balancing plants highly competitive. Proper regulations, economic incentives, and strategic technology choices will be key to mitigating financial risks and ensuring both investors and end-users benefit.

Natural gas serves as an important transitional fuel that provides flexibility and reliability as the Philippines increases its use of renewables. Recent legislation, such as the Natural Gas Industry Act, is a positive step toward securing gas supplies and attracting investments in LNG infrastructure, enabling the country to import gas from overseas. To ensure fair competition, market mechanisms should be introduced that appropriately reward companies supplying gas.

However, new gas power plants should be flexible rather than traditional baseload units, so they can eventually shift to sustainable fuels and enable deeper penetration of renewables.

Looking ahead, hydrogen and other sustainable fuels are projected to become cost-competitive by the mid-2030s. By deploying flexible gas plants today that can later transition to hydrogen, the Philippines can prepare for a cleaner energy system without risking long-term reliance on fossil fuels.