Danel Aboitiz: A new generation of energy leadership

Aboitiz Power President and CEO Danel Aboitiz

After over two decades of deregulation, the Philippine power sector remains a complex challenge—marked by unreliable service, high costs, and persistent darkness in many islands and remote areas. This underscores the fact that industry restructuring hasn't yet delivered universal access to electricity, and consumers continue to grapple with high electric bills.

The Philippine energy sector feels trapped in a cycle of talk without action, perpetually awaiting industry players and government leaders to deliver on promised reliable infrastructure and real solutions.

Aboitiz Power Corporation, the country’s largest power producer, acknowledges these challenges. Under the leadership of its young President and CEO, Danel C. Aboitiz, the company is pivoting its next wave of investments. Their vision: to address the energy struggles burdening Filipino consumers. This involves not only conventional solutions like coal and gas-fired generation but also technological breakthroughs in renewable energy (RE), energy storage systems, artificial intelligence (AI), and even exploring future innovations.

The Aboitiz Power chief admits the country’s power system remains troubled. His approach recognizes that solutions won't come from a single player, technology, or quick fix. Industry-wide improvement requires a collective, multi-stakeholder effort, with the Department of Energy (DOE) and other government agencies taking the lead.

“The general sentiment that electricity in the Philippines is still expensive is correct,” Aboitiz affirms. “I think it’s right, and I think we should take steps to reduce the cost of electricity.”

He believes the finger-pointing between government and the private sector needs to stop. It's time for unified action.

“If you look at the Philippine Energy Plan, the way we crafted it, we have multiple objectives, and energy affordability does not sit at the top—it’s not the first priority,” he notes. “I think the DOE has been directed to balance sustainability, security, self-sufficiency, and affordability—I think we need to focus more on affordability; and we should have started on that yesterday. I think that’s the right approach, and they should tell us, the industry players, what’s the right thing to do.”

More affordable electricity will not only benefit consumers but also stimulate the Philippine economy. Lower energy costs will attract investment, particularly in manufacturing, boosting industrial growth and creating jobs. This, in turn, will fuel economic development.

“The right thing to do for the Philippines is produce cheaper electricity—enabling people’s livelihoods, helping attract economic activity for direct investment,” he says.

Beyond power generation, Aboitiz emphasizes the importance of exploring untapped indigenous resources, including oil and gas extraction (particularly at the Malampaya gas field) and strategic mining of indigenous coal reserves. These are crucial for both energy security and long-term affordability.

“Let’s build our coal mines, let’s tap our gas resources and let’s use these in order to provide us with cheap stably-priced and locally sourced fuel for electricity,” he advocates.

Achieving balance energy mix

As one of the Philippines’ largest energy producers, Aboitiz Power is committed to providing the nation with reliable, affordable, and sustainable power sources.

While many emphasize renewable energy, Aboitiz acknowledges the continuing necessity of baseload coal plants, especially given the current state of the power system. He argues that the transition to renewables cannot happen overnight, and coal remains essential until the transition is complete.

“Coal still has its place in our grid—and no one wants to talk about it,” he states. “I think we should build coal where it makes sense—that does not mean that we shall not build other sources of electricity.”

Aboitiz Power is expanding its Therma Visayas coal plant in Cebu, adding 150 megawatts. Aboitiz defends this move, citing the country’s current power needs. He argues that they cannot be met by intermittent RE technologies alone.

“I’m not surprised by that oversimplification—nor does it bother me,” he says. He emphasizes that Aboitiz Power’s ultimate goal is to move away from coal, but not at the expense of reliability and affordability.

The expanded 1,200MW Ilijan gas plant, a joint venture with Meralco PowerGen and SMC Global Power, is expected to provide a significant capacity buffer this summer, mitigating potential supply shortages. Gas is seen as a crucial flexible technology during the energy transition.

“The fact is: Aboitiz Power has the largest RE capacity of any company in this country—and we’re also the first to move into RE (hydro generation) in 1978—so these are facts. And we have a solid target for our RE investments,” he clarifies.

Beyond its current 1,200MW RE capacity across hydro, solar, and geothermal technologies, plus battery energy storage system (BESS) ventures, Aboitiz highlights the company’s commitment to its target of a 4,600MW diversified RE portfolio by 2030.

Forward investment strategies

The Aboitiz Group’s rich history spans a century of hard work and involvement in the Philippine power sector, making us one of the most established energy providers in the country. 

Aboitiz Power is actively seeking opportunities, including assets slated for privatization by the Power Sector Assets and Liabilities Management Corporation (PSALM), such as the Caliraya-Botocan-Kalayaan (CBK) hydropower complex.

Building on their successful partnership, the company is expanding projects with Norwegian firm Scatec (formerly SN Power), including the multi-phased 390MW Alimit hydropower plant.

“Both Scatec and Aboitiz Power, our Aboitiz Renewables, are very interested in developing SNAP as a growth platform—so we’ve asked the management team to start growing that business for us—apart from other opportunities that we have,” he explains.

Another key strategy is the company’s push into distributed generation, integrating solar power and electric vehicles (EVs) to provide sustainable solutions while alleviating strain on grid capacity.

“We’re putting a little more focus into the distribution space, we also have renewed and more intensified focus on distributed energy generation—so we’re looking at the EV space, we’re looking to serve residential, small commercial facilities to rooftop solar,” he says.

“There are many models on how to participate in distributed energy generation,” he continues. “I think the Philippines is ripe for that—as you know, we have transmission limitations; and reducing the cost of electricity is imperative across the business sector.”

He notes that the DOE is considering a policy for embedded generation, allowing smaller renewable energy sources to connect directly to distribution utilities.

Aboitiz also mentions opportunities to expand baseload facilities, with the exception of geothermal plants. He suggests maximizing existing geothermal resources but acknowledges their limited potential for significant expansion.

Regarding oil-to-power facilities, he mentions plans for hybridization, coupling them with batteries to provide ancillary services.

Aboitiz Power is also exploring technological innovations, including generative AI for business operations and the potential of nuclear and hydrogen energy.

“I think we have to keep an eye on emerging technologies,” he says. “For AI, there are indefinite possibilities. The immediate and obvious ones are predictive maintenance…I think less obvious, maybe in the future, is demand management.”

Climate, food production in the equation

Danel, who is most known in the power industry for his forward-thinking and progressive mindset, argues that the burden of decarbonization should not fall disproportionately on vulnerable countries like the Philippines. He suggests a measured path to decarbonization while industrialized nations take the lead.

“I think that global warming is a global problem, and we should really try to solve this as a global community in the most efficient way—and the Philippines is not an efficient place to reduce carbon emissions,” he states. “There are other countries that are better positioned for that.”

He emphasizes the need to balance energy generation and food production, acknowledging the challenge of competing land use.

“Here in the Philippines, you’re displacing arable lands,” he points out. “My perspective [is that] we might be able to solve global warming with a global view in the most efficient way we can—and for a country like the Philippines, considering its current endowment, which is [its] economic situation, [and] our demographic landscape, [we] should focus on energy affordability.”

Aboitiz admits to some reservations about their SaCaSun solar plant in San Carlos City, Negros Occidental, which was built on land previously used for sugarcane production. This experience has led them to prioritize mountainous terrain for future projects.

“After SaCaSun, what we’ve started to do is actually build on mountainous terrains rather than building them on arable lands,” he explains. “We’re looking at desert or sandy areas in the north—but again they’re occupying a sand dune, so we try to be mindful of our impact.”

He adds, “We avoid irrigated land—because that’s clearly better used for the production of food, which I think is another challenge for the Philippines—we lack food security.”

He also emphasizes the need to address poverty alongside climate change.

Aboitiz Power believes that practicing good governance is the most sustainable way of moving forward as an enterprise. Not only does it ensure the welfare of stakeholders but also creates value for the company and its businesses. 

International expansion

While some Filipino companies have already expanded overseas, Aboitiz Power is taking a more methodical approach, carefully weighing each potential investment. International diversification is a key goal for the young CEO.

“Honestly, we’re just getting started,” he admits. “There’s capacity building that needs to be done—research that needs to be done. And we’re in the process of trying to figure out how to do this.”

He confirms that international expansion has long been part of their plan, but previous hesitation stalled progress. “We still lacked the conviction back then—but we have that now, and the momentum is getting on our side,” he says.

The timeline remains fluid, but he reveals, “It’s a medium-term goal. My hope is: before 2030, we will have some investments in the international market already.”

While no specific prospects have materialized, he notes potential opportunities in neighboring markets like Vietnam and Indonesia, though he acknowledges the complexities of navigating the latter.

“I’m a little concerned about concentration in one jurisdiction—Aboitiz Power is all in the Philippines, so it would be wise to diversify a little bit—geographically, that will be one,” he explains. “Then we also have high concentration in coal, so I would be eager to diversify from that—we just have to improve that—both the geography and technology.”

Views on synergizing leadership and teamwork

Danel Aboitiz

As a fifth-generation Aboitiz leading the family’s power business, Danel recognizes the challenge of following in the footsteps of his predecessors. He believes his experience within the company has prepared him for the role.

“I’ve been in this industry for a long time, and I’ve come up through the ranks, so I know this business,” he says. “There’s no secret sauce, but the time-tested values of hard work, perseverance, and persistence will really take you a long way.”

He relies heavily on his team, delegating tasks and trusting their abilities. “I prefer to delegate—there’s just so much to do, so I delegate everything I can as much as possible, but as little as necessary,” he explains. “However, if for some reason I sense that we don’t have the capacity to have it done and I need to step in; then I step in.”

While most fourth-generation Aboitizes are involved only at the board level, he emphasizes the support of his uncle, Aboitiz Group CEO Sabin Aboitiz, and the expertise of his cousins in other key positions.

“Most of them (fourth-generation Aboitizes) are retired, the only one left is Sabin—and he’s been a tremendous supporter, so he’s actually making things easier,” he says. “Over time, I’ve learned what to elevate (to the Aboitiz elders) and what I can do on my own—because it’s a question of getting to know each other well and over time, [building] confidence and trustworthiness.”

The young Aboitiz also values the diverse expertise of his board of directors. “I have a very capable board of directors with diverse capabilities, diverse talents, and we vet investment opportunities very, very thoroughly—in fact, that’s probably where I spend most of my time—looking for opportunities to grow the business; and really strategizing and thinking through the consequences of these decisions—not just short-term consequences, but long-term consequences—what are our customers going to want; what will the future energy landscape look like.”

He recognizes the importance of collaboration in large-scale energy projects. “It’s abundantly clear to me with my 15 or 16 years in this industry that: to successfully build an energy project of international significance, you really need everybody’s cooperation,” he emphasizes. “So your mindset has to be where you consider all these different angles: where you care for the local environment and make sure that your facility does consider the livelihood, jobs that you create, consider the taxes that you pay, see where we can localize a lot of our supply chain; and if we can provide electricity at more competitive rates.” He adds that a major part of his role is to “really understand customer goals either way to win the business, rather than behaving like a natural monopoly.”

Aboitiz's leadership focuses not only on business growth but also on the company’s long-term contribution to national development.