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DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
DEVELOPMENTS IN THE PHILIPPINE ENERGY SECTOR
A Vision for the Future of Philippine Energy
SEC. VINCE S. PÉREZDepartment of Energy
22 August 2002
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
Local Oil2%
Imp. Coal 8%
Loc. Coal2%
Geo8% NRE
30%
Imp. Oil 45%
Hydro 5%
Total Energy: 243.4 MMBFOE Indigenous Energy Level: 45%Total Energy: 243.4 MMBFOE Indigenous Energy Level: 45%
Primary Energy Mix Y2000 Primary Energy Mix Y2002
INDUSTRY BACKGROUND
Overview of Philippine Energy Sector
Imp. Oil37%
NRE30%
Loc. Gas8%
Geo6%Local Oil
3%Hydro
4%
Local Coal2%
Imp. Coal10%
Total Energy: 266.9 MMBFOE Indigenous Energy Level: 52%Total Energy: 266.9 MMBFOE Indigenous Energy Level: 52%
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
UPSTREAM DEVELOPMENTS
Vast Potential in Hydrocarbons
836Reserves 137
Potential
2,848Mapped
5,074
Unmapped
Total Resources (million bbl o.e.)
• Recent studies show hydrocarbon resource potentials larger than previously projected
• 16 sedimentary basins representing an area of over 700,000 sq.km.
Sedimentary Basins
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
UPSTREAM OIL & GAS SECTOR
n Total Service Contracts awarded, 7
n Geophysical Survey and Exploration Contracts (GSEC) – 9
n Farm-in of Shell into South China Resources, Inc. for an offshore oil exploration project in Northeast Palawancovered by GSEC-99
n Awarded GSEC 101 in June ‘02 to Sterling Energy Limited Partnershipu Covers 1,036,00 ha. near Reed Bank offshore
Philippinesu First foreign exploration in the last 4 years
n Recently awarded GSEC to Japan Petroleum Exploration Co., Ltd. (JAPEX)u Covers 328,000 ha. Offshore of Tañon Strait
Petroleum Contracts
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
UPSTREAM DEVELOPMENTS
Malampaya Developments• Malampaya Deep Water-Gas-to-
Power Project now operationalsupplying fuel to:
– Ilijan (1,200 MW)
– Sta. Rita (1,000 MW)
– San Lorenzo (500 MW to commence 1st Q2002)
• Malampaya Oil Rim Find
– Yield increased to 23,000 barrels/day
– Test results under study for EWT2
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
DOWNSTREAM OIL & GAS SECTOR
• Batangas-Manila (BatMan)
• Pipeline to connect Manila with the Malampaya Nat Gas Reserve
• Multiple parties interested
• Numerous feasibility studies conducted
• Consortium still being eyed
Proposed Natural Gas Pipeline
Malampaya
BatMan
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
DOWNSTREAM OIL & GAS SECTOR
• Bataan-Manila 2 (BatMan 2)
• To receive LNG importation and supply industrial ecozones in Subic & Clark
• Potentially to supply fuel in Central Luzon and petrochemical plants located in the area
• Proposed site for LNG Terminal
Proposed Natural Gas Pipeline
MalampayaBatMan 2 or Robin
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
DOWNSTREAM OIL INDUSTRY
Pandacan Oil Depotn MOU among the City
Government of Manila,Caltex, Petron, Shell and the DOE signed last 26 June 2002
n Big 3 agreed to scale down area of operation to widen buffer zone to the surrounding residential community
n Joint operation of integrated facilities
n Creation of a Green Buffer Zone
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
n Potential development in ocean, solar and wind (OSW) energy
n Philippine wind energy potential could be as much as 70,000 MW
n Significant progress in wind farms:u 40MW wind farm project in Burgos,
Ilocos Norte by PNOC-EDC
u 25 MW wind farm project in Bangui Bay, Ilocos by Northwind Power funded by DANIDA
u Most popular OSW inquiries with DOE
RENEWABLE ENERGY
Wind Energy Potentials
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
RENEWABLE ENERGY
• Installed capacity of 1,931 MW
• 2nd largest user of geothermal energy resources for power generation
• Potential of 730 MW from 11 explored prospect areas
Geothermal Power
Malitbog Facility in Leyte:Largest Geothermal Power Plant in the World
Visayas
Luzon
Mak-Ban, Laguna425MW
Mindanao
Tiwi, Albay330MW
Sorsogon/Albay
150MW
Mt. Apo 100MW
Tongonan, Leyte 710MW
Palinpinon, So. Negros
198MW
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
n Development of additional 1,299 MW for the period 2002-2011
n Installed capacity anticipated to increase to 3,820 MW by 2011
RENEWABLE ENERGY
Hydropower Development
NALATANG HYDRO
BUGUIAS, BENGUET75 MW
AGBULU
KABUGAO, APAYAO 360 MW
SAN ROQUE HYDRO
SAN ROQUE, PANGASINAN345 MW
VILLA SIGA HYDRO
BUGASONG, ANTIQUE
32 MW
TAGOLOAN HYDROSUMILAO, BUKIDNON
68 MW
KALAYAAN 3 & 4 PSKALAYAAN, LAGUNA
350 MW
PACUAN HE
NEGROS ORIENTAL33 MW
PULANGI V HYDRO
ROXAS, NORTH COTABATO225 MW
BAKUN A/C HYDRO
LA UNION, ILOCOS SUR, BENGUET70 MW
CASECNAN HYDROPANTABANGAN, NE
140 MW
DIDUYON HYDROALICIA, QUIRINO
332 MW
KANAN HYDROINFANTA, QUEZON
113 MW
TIMBAHAN HYDROMADALAG, AKLAN
29 MW
LEGEND:
s INDICATIVE
COMMITTED
BINONGAN HYDROBANGUED, ABRA
175 MW
ABUAN HYDROILAGAN, ISABELA
60 MW
ILAGUEN HYDROSN. MARIANO, ISABELA
60 MW
ADDALAM HYDRO
CABARROGUIS, QUIRINO46 MW
AGUS III HYDROLANAO DEL NORTE & SUR
225 MW
BULANOG - BATANG HYDRO
TALAKAG, BUKIDNON132 MW
Projected Hydro Power Plants
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
n Priority dispatch of small renewable energy under WESM Rules
n Allocate a minimum amount of generation capacity from renewable energy
n Promotion of Green Renewable IPPs (GRIPPs)
n Introduce Green Pricing Program mechanism to promote consumer choice of power supply
RENEWABLE ENERGY
Upcoming Policies
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
Promotion of as alternative transport fuels :
n Compressed Natural Gas (CNG) in Luzon
n LPG in the Visayas
n Coco-diesel in Mindanao
ALTERNATIVE FUELS
Upcoming Policies
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
MACRO-ECONOMIC GOALS
• Economic Growth
• Poverty Alleviation
• Market-based Industry
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
ELECTRICITY DEMAND AND SUPPLY PROFILEActual vs. Forecast Demand
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Megawatt EO 215 implementedPower Reform Act of 2001
FPCA formula introduced
Power Crisis
Financial Crisis
Electric Power Crisis Act of 1993Creation of DOE
BOT Law
First IPP (Hopewell 210 MW)
New BOT Law
Only limited capacity was added during 1986-1991
Installed Cap.
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
ELECTRICITY DEMAND AND SUPPLY PROFILEActual vs. Forecast Demand
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Megawatt EO 215 implementedPower Reform Act of 2001
FPCA formula introduced
Power Crisis
Financial Crisis
Electric Power Crisis Act of 1993Creation of DOE
BOT Law
First IPP (Hopewell 210 MW)
New BOT Law
Only limited capacity was added during 1986-1991
Dependable Cap.
Installed Cap. 6,503
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
ELECTRICITY DEMAND AND SUPPLY PROFILEActual vs. Forecast Demand
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Megawatt EO 215 implementedPower Reform Act of 2001
FPCA formula introduced
Power Crisis
Financial Crisis
Electric Power Crisis Act of 1993Creation of DOE
BOT Law
First IPP (Hopewell 210 MW)
New BOT Law
Only limited capacity was added during 1986-1991
Dependable Cap.
Installed Cap. 6,503
PDP 1993
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
ELECTRICITY DEMAND AND SUPPLY PROFILEActual vs. Forecast Demand
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Megawatt EO 215 implementedPower Reform Act of 2001
FPCA formula introduced
Power Crisis
Financial Crisis
Electric Power Crisis Act of 1993Creation of DOE
BOT Law
First IPP (Hopewell 210 MW)
New BOT Law
Only limited capacity was added during 1986-1991
Dependable Cap.
Installed Cap. 6,503
PDP 1993
PDP 1996 (High)
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
ELECTRICITY DEMAND AND SUPPLY PROFILEActual vs. Forecast Demand
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Megawatt EO 215 implementedPower Reform Act of 2001
FPCA formula introduced
Power Crisis
Financial Crisis
Electric Power Crisis Act of 1993Creation of DOE
BOT Law
First IPP (Hopewell 210 MW)
New BOT Law
Only limited capacity was added during 1986-1991
Dependable Cap.
Installed Cap. 6,503
Actual Demand 3,228
PDP 1993
PDP 1996 (High)
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
Energy Demand-Supply OutlookMacro-Economic Parameters
GDP Growth 2000-2012
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
Year
LowHigh
‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
SYSTEM PEAK DEMAND FORECAST
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
MindanaoVisayasLuzon
Low GDP Scenario
Annual Growth:7.6%
High GDP Scenario
Annual Growth: 8.2%
2002 2003 2007 2012 2002 2003 2007 2012
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
INSTALLED GENERATING CAPACITY
Fuel Type Luzon Visayas Mindanao TOTAL
Oil-Thermal 650 - 109 759
Diesel 911 492 438 1,840
Gas Turbine 930 - - 930
Coal 3,758 205 - 3,963
Hydro 1,510 12 997 2,518
Geothermal 907 919 104 1,931
Natural Gas 2,263 - - 2,263
TOTAL 10,929 1,604 1,647 14,204
In MW, as of June 2002
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
M I N D A N A O
N E G
R O
S
L U Z O N
P A N A Y
S A M A R
Region II
230 kV550 kV
69 kV
INTERCONNECTION PROJECTS
NEGROS-PANAY (1990)Capacity: 100 MWVoltage: 138 KV
LEYTE-LUZON (1998)Capacity: 440 MWVoltage: + 350 HVDC
LEYTE-CEBU (1997-2004)Capacity: 400 MWVoltage: 230 KV
LEYTE-BOHOL (2004)Capacity: 100 MWVoltage: 138 KV
NEGROS-CEBU (1993)Capacity: 100 MWVoltage: 138 KV
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
CAPACITY ADDITIONS
YEAR COMMITTEDINDICATIVE
BASELOAD INTERMEDIATE
2004 430 - -
2005 385 - 300
2006 200 - 502007 - 150 -
2008 - 250 -
2009 - 1,050 1002010 - 1,700 -
2011 - 1,450 -2012 - 800 -
TOTAL 1,015 5,400 450
In MW, TOTAL PHILIPPINES
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
INDIGENOUS RESOURCES FOR ADDITIONAL GENERATION CAPACITIES
PLANTS LUZON VISAYAS MINDANAO COUNTRY
Nat Gas - - - -
Geothermal 310 700 120 1,130
NRE 587 50 - 637
Coal 380 400 400 1,180
Hydro 1,611 94 806 2,511
TOTAL 2,888 1,244 1,326 5,458
In MW, 2003 – 2012
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
ENERGY SECTOR REFORM
• Creation of National Transmission Company (“TRANSCO”)
• Creation of Power Sector Asset and Liabilities Management Corporation (“PSALM”)
• Creation of new Energy Regulatory Commission (“ERC”)
• Creation of Wholesale Electricity Spot Market (“WESM”)
• Privatization of the National Power Corporation (“NPC”)
• Open Access subject to Pre-Conditions
R.A. 9136 provides for the:
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
ENERGY SECTOR REFORM– Promulgation of Distribution Code in Dec. 2001
– Promulgation of Grid Code in Dec. 2001
– Approval of the Implementing Rules and Regulations (“IRR”) on 27 February 2002
– Signing of EO 100 on Tax Equalization of Indigenous Source of Energy on 03 May 2002
– Unbundling of NPC Rates on 26 June 2002
– Promulgation of WESM Rules on 28 June 2002
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
ENERGY SECTOR REFORM– Promulgation of Interim Rules & Regulations for
downstream natural gas
– Department Circular on penalties for LPG violators
– Proposed Department Circular on penalties for delayed IPO by oil majors
– Proposed EO for loan condonation of Electric Cooperatives (ECs)
– Proposed Investment Management Contracts (IMC) for ECs
DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY
ENERGY SECTOR GOAL
• Stable & secure energy supply
• Wider access to energy supply
• Fair & reasonable energy prices
• Clean & efficient energy fuels & infrastructures
• Enhanced consumer welfare & protection
• Technology transfer & manpower development
• Job creation from energy activities