Why Developing Countries Go through an Unsustainable Energy Transition Pathway? The Case of the Philippines from a Political Economic Perspective

A shift toward a sustainable energy system takes place when renewable energy technologies become much more appealing energy options. However, political factors deter many developing countries from deploying renewable energy. This paper aimed to elucidate how exogenous actors and regime incumbents exercise power to block renewable energy technologies from emerging in developing countries, using the Philippines as a case study. This work uses a combination of a multi-level perspective in socio-technical transitions with power exercises as the analytical framework. The results show that in the Philippines three types of power exercises have moved the country toward a coal-based energy system. First, multilateral banks and foreign investors exercised a transformative power to pressure the government to liberalize the energy system, and currently exercise this power to support the development of both coal and renewable energy, albeit more indirectly. Second, “energy oligarchs” exercise reinforcive power to create and reproduce a new private oligopolistic energy structure by acquiring energy assets, building coal power plants, and dominating the energy supply chains. Lastly, the government exercises the constitutive and transformative power to induce these foreign investors and energy oligarchs to continue investing in coal power unless renewables can sufficiently contribute to energy security and affordability of electricity prices. These findings imply that in developing countries the liberalization of the electricity market can result in a change to the dominant power structure from a government monopoly to a private oligopoly and accelerate the transition to a coal-based energy system.