Manila, Philippines – A significant shift is underway in the Philippines' energy landscape as the nation embraces pumped-storage hydroelectric power (PSHP) to bolster its energy security and meet rapidly growing demand. Once a relatively overlooked sector, PSHP is now attracting substantial investment from the country's leading business magnates and international players, signaling a new era for renewable energy in the archipelago.

At the heart of this burgeoning interest is the 797-megawatt Caliraya-Botocan-Kalayaan (CBK) hydropower complex in Laguna province. This facility, commissioned in 1983, holds the distinction of being Southeast Asia's oldest operational pumped-storage plant. Its impressive infrastructure includes two six-meter diameter penstocks stretching 1,300 meters from Caliraya Lake in Quezon to Laguna Bay, a massive freshwater lake larger than Singapore. These penstocks harness the significant elevation drop to drive powerful turbines, providing a reliable source of clean, renewable electricity to the Luzon grid for the past four decades.

Now, the government-run Power Sector Assets and Liabilities Management Corp. (PSALM) is moving to privatize the CBK complex, sparking a fierce competition among nine major contenders. The pre-proposal conference for the auction saw a packed room of industry heavyweights, including local conglomerates such as Ayala-led Giga Ace 11 Inc., First Gen Prime Energy of the Lopez Group, San Miguel Global Power under Ramon Ang, Semirara Mining and Power of the Consunji family, and Enrique Razon Jr.'s Prime Infrastructure Capital Inc. The auction has also drawn significant foreign interest from Tokyo-based Marubeni Corp., Korea Water Resources Corp., I Squared Capital-backed Hexa Philippines Holdings Inc., and the formidable Thunder Consortium, a strategic alliance between Aboitiz Renewables Inc., Japan’s J-Power, and Sumitomo Corp.

The privatization of CBK is expected to generate up to Php100 billion ($2 billion) for the Philippine government, funds earmarked to help alleviate the national budget deficit. The winning bidder will take over the existing facilities in Lumban, Majayjay, and Kalayaan on an "as is, where is" basis, inheriting both the opportunities and challenges of an asset whose build-rehabilitate-operate-transfer (BROT) contract is set to expire in 2026. The deadline for bid submissions is June 16th.

Why the Sudden Surge in Interest?

Several factors are driving this renewed focus on pumped-storage hydropower in the Philippines:

Legislative Reforms: Recent government initiatives have created a more favorable environment for investments in the power sector, particularly in renewable energy.

Abundant Water Resources: With over 400 rivers and numerous mountain streams, the Philippines possesses significant untapped hydropower potential.

Growing Energy Demand: The country is experiencing a surge in electricity consumption driven by expanding data centers, increased domestic demand for cooling, and a rise in manufacturing activity.
Energy Security: Pumped-storage hydro offers a crucial solution for grid stability by storing excess renewable energy generated during periods of low demand and releasing it when needed, ensuring a more reliable power supply.

Ambitious Expansion Plans Underway

Beyond the privatization of CBK, the Philippines is actively pursuing several new pumped-storage hydro projects through public-private partnerships:

Pakil Pumped Storage Hydroelectric Power Project (Laguna): Slated for operation by 2030, this ambitious project is expected to become one of Asia's largest PSHP facilities, boasting a storage capacity of 14,000 MWh per day and a generating output of 1,400 MW.
Wawa Pumped Storage Hydroelectric Power Project: With a targeted commercial operation date of 2029, this project will offer a storage capacity of 6,000 MWh per day and a generating output capacity of 600 MW.
Aklan Pumped-Storage Hydro Power Plant Project: Developed by Strategic Power Development Corp. (SPDC), this proposed 300 MW project aims to further enhance the country's renewable energy infrastructure.
Seawater-Based Pumped-Storage Hydropower Plant (Real, Quezon): Repower Energy Development Corp. (REDC) is pioneering a unique 320 MW project that will utilize seawater for pumped storage, a first for the Philippines.

These initiatives underscore the Philippines' strong commitment to diversifying its energy mix, reducing reliance on fossil fuels, and enhancing energy storage capabilities. By harnessing its abundant water resources and embracing innovative technologies like pumped-storage hydropower, the Philippines is positioning itself as a rising force in clean energy generation in the Southeast Asian region. The current "energy gold rush" is not just about seizing valuable assets; it's about powering the nation's future with sustainable and reliable energy.