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TRANSCRIPT
Regional Economic Managers’Regional Economic Managers Briefing and Dialogue,Malacañang, Manila
JOSE RENE D ALMENDRASJOSE RENE D. ALMENDRASSecretaryDepartment of Energyp gy
Power Sector Situationer2009 Power Supply2009 Power Supply--Demand, Luzon GridDemand, Luzon Gridpp ypp y ,,
Power Demand in Luzon, 1985 Power Demand in Luzon, 1985 –– 20092009
Luzon Power Demand and Supply Outlook, 2010‐2030Luzon grid needs a total additional capacity of 11,900 MW onwards to 2030
25,000
600 MW Coal-Fired
20,000
600 MW Coal Fired (GN Power);
33.55 MW BacMan II
40.8 MW BacMan I-2
10,000
15,000
MW4.6 % AAGR
5,000 Malaya (685.83 MW) Retirement
AAGR
0
Required Additional Cap 300 300 450 450 450 500 600 650 500 650 650 650 800 650 800 900 800 900 900
Committed 41 634
Existing Capacity 10,030 10,030 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Assumption: High Demand Forecasts
Required Reserve Margin 1,646 1,701 1,774 1,865 1,944 2,038 2,135 2,235 2,327 2,432 2,541 2,656 2,775 2,900 3,031 3,167 3,310 3,459 3,615 3,778 3,949 4,127
Peak Demand 7,036 7,270 7,582 7,934 8,309 8,710 9,123 9,553 9,945 10,393 10,860 11,349 11,860 12,39412,952 13,535 14,145 14,783 15,450 16,147 16,87517,636
Luzon Power Demand and Supply Outlook, 2010‐2030
35,000
Luzon grid needs a total additional capacity of 20,450 MW onwards to 2030
MW
25,000
30,000
600 MW Coal-Fired (GN Power);
33.55 MW BacMan II
MW
15,000
20,00040.8 MW BacMan I-2
6.0 % AAGR
5,000
10,000AAGR
Malaya (685.83 MW) R ti t
0
Required Additional Cap 900 600 750 650 800 800 800 900 950 1,000 1,100 1,500 1,150 1,250 1,400 1,450 1,500 2,500 800
Committed 41 634
Existing Capacity 10,030 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Retirement
Required Reserve Margin 1,794 1,901 2,015 2,136 2,264 2,400 2,544 2,697 2,859 3,030 3,212 3,405 3,609 3,826 4,055 4,299 4,556 4,830 5,120 5,427 5,752
Peak Demand 7,665 8,125 8,613 9,129 9,677 10,258 10,873 11,526 12,217 12,950 13,727 14,551 15,424 16,349 17,330 18,370 19,472 20,641 21,879 23,192 24,583
5Assumption: 6 Percent (%) AAGR
Luzon Power Demand and Supply Outlook, 2010‐2030
40,000
Luzon grid needs a total additional capacity of 27,250 MW onwards to 2030
25,000
30,000
35,000
40.8 MW BacMan I-2
15,000
20,000
25,000
MW600 MW Coal-Fired (GN Power);
33.55 MW BacMan II 7.0 % AAGR
5,000
10,000
Malaya (685.83 MW)
0
Required Additional Cap 1,200 750 750 1,000 800 1,000 1,100 1,150 1,250 1,300 1,400 1,550 1,600 1,750 1,900 1,900 2,150 2,250 2,450
Committed 41 634
Existing Capacity 10,030 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Retirement
Required Reserve Margin 1,828 1,956 2,092 2,239 2,396 2,563 2,743 2,935 3,140 3,360 3,595 3,847 4,116 4,404 4,713 5,042 5,396 5,773 6,177 6,610 7,072
Peak Demand 7,811 8,357 8,942 9,568 10,238 10,955 11,721 12,542 13,420 14,359 15,364 16,440 17,591 18,822 20,140 21,549 23,058 24,672 26,399 28,247 30,224
6Assumption: 7 Percent (%) AAGR
Energy Reform Agenda
“Energy Access for More” A key priority of government to mainstreamA key priority of government to mainstream
access of the greater majority to reliable energy services and fuel, most importantly, local productivity and countryside development
E Achieve D l
Good Governance thru stakeholder participation, transparency, multi-sectoral partnership and use of ICT
Ensure Energy
Security
Achieve Optimal Energy Pricing
Develop a Sustainable Energy Plan
Regional Economic Managers’Regional Economic Managers Briefing and Dialogue,Malacañang, Manila
JOSE RENE D ALMENDRASJOSE RENE D. ALMENDRASSecretaryDepartment of Energyp gy
Pillar I: Ensuring Energy Security
STRATEGIC DIRECTION
ACTION PLANS
Short-term (2010 2011)
Medium-term (2011 2013)
Long-term (2013 2016)
g gy y
(2010-2011) (2011-2013) (2013-2016)
Accelerate the exploration and development of
oil gas and
Operationalize a one-stop-shop for upstream investment promotion and assistanceAward of exploration and
Continue awarding of exploration and development contracts for coal and petroleum
Sustain promotion and implementation of upstream oil, gas and
coal resources Award of exploration and development contracts for petroleum
o Energy Contracting Round o Direct negotiations for
for coal and petroleum to identify /firm up reserves and complement fuel supply
o Energy Contracting
of upstream activities
Frontier Areas o Publication of nominated
areasCollection and reporting of complete accurate and
Round o Direct negotiations
for Frontier Areaso Publication of
nominated areascomplete, accurate and timely oil and gas data through the International Joint Oil Data Initiative (JODI).Prudent assessment of current S i C t t
nominated areasConduct of research on new technologies on hydrocarbon (i.e. CBM, EOR/IOR/CCS)
Service Contracts.
Pillar I: Ensuring Energy Security
STRATEGIC DIRECTION
ACTION PLANSShort-term (2010 2011)
Medium-term (2011 2013)
Long-term (2013 2016)
g gy y
DIRECTION (2010-2011) (2011-2013) (2013-2016)Intensify
development and utilization of rene able
Increase utilization of biofuelsIncrease domestic
bioethanol production
Increase utilization of biofuelsAdditional bioethanol
capacity of 100 million
Increase utilization of biofuelsContinue conduct of
R&D for other non food of renewable and
environment-friendly
alternative
capacity to 64 million litersIncrease use of locally-
produced alternative fuels/biofuels
Cond ct R&D for other non
capacity of 100 million litersContinue conduct of
R&D for other non-food feedstock in
R&D for other non-food feedstock in coordination with concerned agencies, academe & research institutions.
energy resources/
technologies
Conduct R&D for other non-food feedstock in coordination with concerned agencies, academe & research institutions.
coordination with concerned agencies, academe & research institutions.Conduct feasibility
Continue conduct feasibility of biofuels and blends for other modes of transport.Implement biofuels
Implement higher biofuelsblend from B2 to B5 and E10 to all gasoline and corresponding standards
Conduct feasibility study of biofuels and blends for air transport
Implement biofuelsblend beyond B5 and E10 and corresponding standards
Identify and promote the required infrastructure and logistics facilities to support biofuels program
Pillar I: Ensuring Energy Security
STRATEGIC DIRECTION
ACTION PLANSShort-term (2010 2011)
Medium-term (2011 2013)
Long-term (2013 2016)
g gy y
DIRECTION (2010-2011) (2011-2013) (2013-2016)Intensify
development and
Continuously promote the use of other alternative fuels (i.e.
Continuously promote the use of alternative fuels
Continuously promote the use of alternative fuels (i.e.
utilization of renewable
and environment-
friendly
compressed natural gas, auto liquefied petroleum gas) as well as other emerging energy technologies such as
(i.e. compressed natural gas, auto liquefied petroleum gas) and other emerging energy
compressed natural gas, auto liquefied petroleum gas) and other emerging energy technologies friendly
alternative energy
resources/ technologies
technologies such as electric vehicles in the transport sector.
emerging energy technologies
energy technologies
Expand the use of natural gas to all sectors by putting up technologies sectors by putting up natural gas infrastructure in NCR and CALABARZON.
Pillar I: Ensuring Energy SecuritySTRATEGIC DIRECTION
ACTION PLANSShort-term (2010-2011)
Medium-term (2011-2013)
Long-term (2013-2016)
Intensify development and utilization of renewable
and
Increase RE-based generation capacities Finalize all policy mechanisms
and guidelines under R bl E A t f
Increase RE-based generation capacitiesContinuing conduct of
RE resource assessment to increase potential
Increase RE-based generation capacities Continuing conduct of
RE resource assessment t i t ti l and
environment-friendly
alternative energy
Renewable Energy Act of 2008.oRenewable Portfolio Standard (RPS)oFeed in Tariff (FiT)
to increase potential sites for capacity addition Continuing conduct of
Open and Competitive
to increase potential sites for capacity addition Continuing conduct of
Open and Competitive resources/
technologiesoFeed-in-Tariff (FiT)oNet-meteringoGreen Energy Option (GEO)oRE Market (REM)/RegistrarC d t RE
Selection Process (OCSP) of awarding RE Service ContractsConvert RE Service
Contract (Pre-
p pSelection Process (OCSP) of awarding RE Service ContractsConvert RE Service
Contract (PreConduct RE resource assessment to determine potential sites for capacity additionConduct Open and
Contract (Predevelopment to commercial stage)
-- Wind (103 sites)-- Solar (4 sites)
G th l (21
Contract (Pre-development to commercial stage)
-- Wind (103 sites)-- Solar (4 sites)Conduct Open and
Competitive Selection Process (OCSP) of awarding RE Service Contracts
-- Geothermal (21 sites)
-- Hydro (392 sites)
-- Geothermal (21 sites)
-- Hydro (392 sites)
Pillar I: Ensuring Energy Security
STRATEGIC DIRECTION
ACTION PLANSShort-term (2010 2011)
Medium-term (2011 2013)
Long-term (2013 2016)
g gy y
DIRECTION (2010-2011) (2011-2013) (2013-2016)Enhance energy
efficiency
Achieve energy efficiency lighting system market transformationRationalize public utility vehicles in
Promote the green building rating system
and conservation
p ymajor roads, particularly EDSA.Promote energy efficient lighting technologies (Philippine Energy Efficiency Project)
Promote adoption of Energy Management St d d i Monitor the implementation of
Administrative Order 126, requiring government buildings to reduce electricity and fuel consumption by
Standard in industries under ISO 50001 framework.
10%.
Pillar I: Ensuring Energy Security
STRATEGIC DIRECTION
ACTION PLANSShort-term (2010 2011)
Medium-term (2011 2013)
Long-term (2013 2016)
g gy y
DIRECTION (2010-2011) (2011-2013) (2013-2016)Enhance energy
efficiency and
Conduct energy audit of DOE attached agencies.Promote and strengthen Energy
conservationg gy
Service CompaniesEstablish energy benchmark in the manufacturing and building sector.Explore market transformation towards energy efficiency for refrigerators and air-conditioners.Expand the coverage of the p gEnergy Labeling Program.
Pillar I: Ensuring Energy Security
STRATEGIC DIRECTION
ACTION PLANSShort-term (2010 2011)
Medium-term (2011 2013)
Long-term (2013 2016)
g gy y
DIRECTION (2010-2011) (2011-2013) (2013-2016)Put in place
reliable power supply
Address pricing and non-pricing (competitive and regulatory) issues to encourage investment
Implement WESM in Mindanao
Increase demand-side participation
More efficient use of electricity through DSMDevelop policy framework for Develop policy framework for distributed generation projects• Tap embedded generators
to augment power supplyto augment power supply• Participation of ECs in
SPUG areas
Pillar I: Ensuring Energy Security
STRATEGIC DIRECTION
ACTION PLANSShort-term (2010 2011)
Medium-term (2011 2013)
Long-term (2013 2016)
g gy y
DIRECTION (2010-2011) (2011-2013) (2013-2016)Put in place
reliable power supply
Update Power Supply Contingency Plan
o Interim policy on the unprivatized
Pursue the development of non-power
assets for contingency purposes o Re-commission power plants under
preservation (e.g. Sucat, Duracom, Power Barge/Navotas)Transfer PB 101 102 and 103 to
hydro projects in Mindanao
o Transfer PB 101,102 and 103 to Mindanao once CEDC, PEDC and KEPCO power plants in the Visayas are fully operational
Initiate the upgrade/rehabilitation of Initiate the upgrade/rehabilitation of NPC plantsImplement heat rate improvement in power plants
Pillar I: Ensuring Energy Security
STRATEGIC DIRECTION
ACTION PLANSShort-term (2010 2011)
Medium-term (2011 2013)
Long-term (2013 2016)
g gy y
DIRECTION (2010-2011) (2011-2013) (2013-2016)Put in place
reliable power supply
Establish and strictly monitor industry compliance to reliability standardso Develop monitoring and disclosures
Create an Independent Reliability p pp y p g
on status of generating facilitieso Reduce the forced outages rate of
generating unitso Enforce strict compliance of power
yCouncilImplement Open AccessImplement p p
plants with their annual preventive maintenance program
Rationalize NPC Supply ContractUndertake preparatory activities to
pprepaid metering
determine readiness to open access
Pillar I: Ensuring Energy Security
STRATEGIC DIRECTION
ACTION PLANSShort-term (2010-2011)
Medium-term (2011-2013)
Long-term (2013-2016)
Attain nationwide
electrification (Implement 90
Pursue Sitio Energization Program – on-grid
On-grid energization of 17,287 sitios
On-grid energization of 13,637 Sitios
Energize 4,000 Households using RE percent
household connection)
energization of 2,466 SitiosEnergize 4,000 Households using RE system
Energize 4,000 Households using RE
system
Improve transmission
using RE system using RE systems
Undertake the Leyte-Mindanao interconnection project transmission
and distribution systems
interconnection project Consider extending the 500-kV transmission backbone to Western Luzon and looping it with Southern Luzon via Kadampat – Hermosa –Zapote – Dasmarinas corridorPursue ASEAN Power Grid Interconnection
Pillar I: Ensuring Energy Security
STRATEGIC DIRECTION
ACTION PLANSShort-term Medium-term Long-term
g gy y
DIRECTION (2010-2011) (2011-2013)g
(2013-2016)Ensure industry compliance to
quality
Operationalize marker technology to address smuggling
quality standards for products and
facilities
Expedite procurement and operation of mobile testing laboratory
Expedite procurement of LPG testing equipment
Strictly enforce importation rules
Pillar I: Ensuring Energy SecuritySTRATEGIC DIRECTION
ACTION PLANSShort-term (2010-2011)
Medium-term (2011-2013)
Long-term (2013-2016)
Promote Oil Supply Security
Update oil supply contingency plano Develop emergency
response mechanism to
Develop/establish strategic oil stockpile.Provide additional oil distribution infrastructure.
Provide climate
respond to local oil supply disruptions
Improve guidelines to
Expand/upgrade oil refineries
Provide climate conducive to
investments and fair and orderly competition (to
Improve guidelines to encourage competition (e.g. GSTLF, operation permits)Clarify taxation on competition (to
expand local refining/storage/handling/distribution capability)
Clarify taxation on imported vs. locally refined petroleum products (jet fuel, intermediate products)
Pillar II: Achieving Optimal Energy Pricing
STRATEGIC DIRECTION
ACTION PLANSShort-term (2010 2011)
Medium-term (2011 2013)
Long-term (2013 2016)(2010-2011) (2011-2013) (2013-2016)
Develop/ Institute optimal price setting in
Upstream/Downstream
Develop a framework for
Upstream
Develop methodology for the energy and power industries
the pricing of indigenous energy - Implement capacitybuilding to institute framework
the pricing of indigenous energy sources.
framework
Review tax issues affecting energy prices (e.g. VAT, real estate, (e.g. VAT, real estate, local taxes)
Review incentives in the upstream sector
Pillar II: Achieving Optimal Energy Pricing
STRATEGIC DIRECTION
ACTION PLANSShort-term (2010 2011)
Medium-term (2011 2013)
Long-term (2013(2010-2011) (2011-2013) (2013-2016)
PowerRevisit fuel supply contracts in the upstream e.g.
t l hi h i b h k d ith
PowerEstablish R M k tnatural gas which is benchmarked with
international prices of oil.Resolve imposition of VAT to power rates including the impact of the LGU Code to the existing and future operations and projects of
Reserve MarketImplement of Open Accessand Retail Competitionexisting and future operations and projects of
the power stakeholders.Revisit the EPIRA provisions on :
- Lifeline rates- Mandated Rate Reduction
CompetitionStandardization of bilateral contracts
- Loan Condonation - Cross-subsidy removal
Coordinate with DILG to implement DILG-DOE Joint Circular 95-01 on the use of the National Wealth TaxReview power supply contracting/power purchasing practices of distribution utilities.
Pillar II: Achieving Optimal Energy Pricing
STRATEGIC DIRECTION
ACTION PLANSShort-term (2010 2011)
Medium-term (2011 2013)
Long-term (2013 2016)(2010-2011) (2011-2013) (2013-2016)
PowerReview and validate the operation of distribution utilities and NGCP vis-à-vis the applicable rate methodology being adopted.Monitor compliance of NGCP to the terms and conditions of its Concession AgreementImplement Time of Use Rates and Demand Side Management (DSM) Program at the distribution Management (DSM) Program at the distribution level.Monitor and enforce market share cap for generators.Review NPC’s existing Special Rates to various Review NPC s existing Special Rates to various customers.Revisit privatization program of PSALM.Strengthen monitoring and enforcement of rules on anti-competitive behavior and unfair trade practices.
Pillar II: Achieving Optimal Energy Pricing
STRATEGIC DIRECTION
ACTION PLANSShort-term (2010-2011)
Medium-term
Long-term (2013-2016)( )
(2011-2013)( )
PowerProvide regulatory certainties to investors e.g. timeliness and appropriateness of rate approvals.timeliness and appropriateness of rate approvals.Upgrade PEMC facilities (hardware and software).Upgrade and improve NGCP’s transmission line facilities and DU distribution lines .Strictly enforce WESM Rules e.g. Real-time dispatch.Launch WESM in the VisayasMonitor technical regulation of players in the
t ( f i t t d d i b
Promote transparency
power sector (referring to standards in sub-station)
Downstream OilReview oil price formulas and methodologiestransparency
of oil pricesReview oil price formulas and methodologies
- Improve transparency of pricing (basis, methodology, among others)
Pillar II: Achieving Optimal Energy Pricing
STRATEGIC DIRECTION
ACTION PLANSShort-term Medium-term Long-term DIRECTION (2010-2011) (2011-2013) (2013-2016)
Downstream OilResolve taxation issues (DOF/BIR/BOC) e.g. duty, excise, VAT on petroleum g y, , pproducts (finished and intermediate), the biofuel chain, imported ethanol, real estate tax per BOI incentives
Advocate passage of Competition/Anti-Trust Law
Mitigate impact of high oil prices
Minimize economic leakage on the oil and public transport sectors
Pillar III: Develop a Sustainable Energy PlanSTRATEGIC DIRECTION
ACTION PLANSShort-term (2010-2011)
Medium-term (2011-2013)
Long-term (2013-2016)
P E R d t OP d C Pursue Energy Legislative Agenda
•Recommend to OP and Congress the certification of Energy Bills as “Urgent” legislative measures:
- Energy Efficiency &Conservation- LPG Bill- Natural Gas BillNatural Gas Bill- Amendments to EPIRA,
Downstream Oil IndustryDeregulation Law and Biofuels
Act Review of Water Code of the Philippines with regards to protocols of water use for energy
Formulate/update energy plans and programs
Formulate and promote the Energy Reform Agenda Formulate regional energy plans
Update the Energy Reform Agenda Complete the formulation
Update Philippine Energy Plan Develop/update the p g
consistent with national and
local development
plans
g gy p(Region IV-A, Region VI and Region XI)Develop/update the National Renewable Energy Program (NREP)Update National Biofuels Program
pof other regional energy plans Develop/update the National Renewable Energy Program (NREP)
d i l i f l
p/ pNational Renewable Energy Program (NREP)Update National Biofuels ProgramC d l Update National Biofuels
ProgramConduct Plan Implementation Review
Conduct Plan Implementation Review
Pillar III: Develop a Sustainable Energy Plan
STRATEGIC DIRECTION
ACTION PLANSShort-term (2010-2011)
Medium-term (2011-2013)
Long-term (2013-2016)
Strengthen policy
researches and studies in
•Conduct of policy research on nuclear energy for power generation
•Conduct a climate change
•Implement a National Nuclear Power Program
•Facilitate the operation of a 2,000 MW nuclear power plant in 2025
aid of executive
and legislative
action
vulnerability assessment of energy resources and facilities.
•Formulate an energy sector-wide climate change adaptation strategy
•Monitor the implementation of the Climate Change Adaptation Strategy
action strategy Revitalize partnership with the Affiliated Renewable Energy Centers (ARECs) and
th t t ll d other state colleges and universities for continuing research , development and deployment of emerging renewable energy renewable energy technologies (wind, solar, ocean, etc.)
Pillar III: Develop a Sustainable Energy Plan
STRATEGIC DIRECTION
ACTION PLANSShort-term Medium-term Long-term DIRECTION (2010-2011) (2011-2013)
g(2013-2016)
Interface with Stakeholders for
a more
Enhance stakeholders’ participation in all energy initiatives
Establish Energy-sector Knowledge
Empower the LGUs to manage their own power-generating a more
participative delivery of
energy service
initiatives
Remove Red Tape by streamlining issuance of permits and licenses and
Knowledge Management portal
power generating requirements in support of their respective economic development
institutionalizing the Citizens’ Charter
- Issues on RDC/LGU endorsement
I DENR/NCIP
agenda
- Issues on DENR/NCIP certification
- Issues on Energy SalesAgreement