PHILIPPINE ENERGY PLAN 2012-2030 1

OVERVIEW AND EXECUTIVE SUMMARY

Guided by the overall vision of providing Energy Access for More, the 2012-2030 Philippine
Energy Plan (PEP) seeks to mainstream access of the larger populace to reliable and
affordable energy services to fuel, most importantly, local productivity and countryside
development. The energy sector, mindful of its role in promoting better quality of life for the
Filipino people, will ensure the delivery of secure, sustainable, sufficient, affordable and
environment-friendly energy to all economic sectors. In pursuit of this goal, the government
will mobilize private sector participation and involvement of other stakeholders to make
power of choice a reality.

The 2012-2030 PEP is
crafted with due
consideration and premium
on the economic
parameters sourced from
the National Economic and
Development Authority
(NEDA), Development
Budget Coordination
Committee (DBCC),
National Statistics Office
(NSO) and international
references on energy such
as the World Energy
Outlook of the International
Energy Agency (IEA). For
the medium-term, the
2012-2030 PEP is basically
anchored on the policy framework set in place
with the formulation of the Energy Reform
Agenda (ERA). The ERA is consistent with
national development directives such as the
Presidents Social Contract and the 2011-2016
Philippine Development Plan; and, responsive
to long-term (beyond 2016) global policy
frameworks on energy such as the UN
Sustainable Energy for All Initiative and the
APEC Green Growth Goals.

Energy Reform Agenda

The ERA has outlined the following major
pillars as its overall guidepost and
direction: (a) Ensure energy security
through the development of indigenous
energy such as renewable energy and
hydrocarbon fuels (oil, gas, and coal); (b)
Achieve optimal energy pricing in
electricity and oil; and, (c) Develop a
sustainable energy system through the
formulation and update of national plans
and programs on energy development,
which are consistent with the countrys
economic development plans.

The Presidents Social Contract

The PEP is guided by the Presidents Social
Contract with the Filipinos. The plans and
programs of PEP are responsive to the
Social Contracts pillars: a) Anti-
corruption/transparent, accountable and
participatory governance through our
energy contracting rounds, Information,
Education and Communication (IEC) and
public consultation activities; b) Poverty
PHILIPPINE ENERGY PLAN 2012-2030 2
reduction and empowerment of the poor
through our programs on rural
electrification, energy efficiency and
conservation, and the provision of benefits
to host communities; c) Rapid, inclusive
and sustained economic growth through
basically all our programs especially in
improving the supply of energy products
and services (both oil and electricity)
nationwide to fuel the businesses and spur
countryside development; d) Just and
lasting peace and the rule of law starting
with the efforts of the Department of
Energy (DOE) in developing regional energy
plans such as the Mindanao Energy Plan
(MEP) to serve as the regions energy
roadmap; e) Integrity of the Environment
and Climate Change Mitigation and
Adaptation with our accelerated programs
on energy efficiency, renewable energy and
alternative fuels; and, f) Gender
Development, which is integrated in
relevant plans and programs.

Philippine Development Plan 2011-2016

The energy sector contributes to the PDPs
goals of promoting inclusive growth and
poverty reduction. The PEP programs on
ensuring energy supply security and
providing energization to the countryside
are integral components of the national
infrastructure development agenda as
contained in the PDP. These energy
commitments will support the PDPs
targeted outcomes of enhancing the
countrys competitiveness, reducing gaps in
basic services, and improving
environmental quality.

UN Sustainable Energy For All Initiative
Development

Cognizant of the fact that the energy sector
is the biggest contributor of greenhouse
gas (GHG) emissions, accounting for about
49.0 percent of the worlds total, the PEP
contains the policies, plans and programs
that will significantly contribute to the
countrys transition towards a low carbon
economy an economy that generates
minimal output of GHG emissions into the
biosphere.

In December 2010, the United Nations
General Assembly declared the year 2012
as the International Year of Sustainable
Energy for all. This global initiative engages
the support of all governments, the private
sector and civil society in ensuring
universal access to modern energy services,
double the global rate of energy efficiency
by reducing energy use (14.0 percent) in
2030, double the share of and/or increase
the share of renewable energy in the global
energy mix from the current share of 15.0
percent.

ASEAN Plan of Action for Energy
Cooperation (APAEC) 2010-2015

The PEP supports and contributes to the
regional action plans and targets as
espoused in APAEC 2010-2015. APAEC is
the regional framework of energy
cooperation highlighting the role of energy
under the ASEAN Economic Community
Blueprint 2015. It aims to enhance
regional energy security and sustainability
through aggressive implementation of
action plans of the different program
components (1) ASEAN Power Grid; (2)
Trans-ASEAN Gas Pipeline; (3) Coal and
Clean Coal Technology; (4) Renewable
Energy; (5) Energy Efficiency and
Conservation; Regional Energy Policy and
Planning (6); and, (7) Civilian Nuclear
Energy.

Among the regional targets set in APAEC to
be achieved in 2015 are: (a) 8.0 percent
(aggregate) energy intensity reduction
based on 2005 level; and (b) increase share
of renewable energy resources to total
installed power generating capacity of the
region by 15.0 percent.




PHILIPPINE ENERGY PLAN 2012-2030 3
APEC Green Growth

This Plan also adheres to the APEC Green
Growth Goals which include the following:
a) rationalization/phase out of inefficient
fossil-fuel subsidies that encourage
wasteful consumption; b) reduction of
aggregate (regional) energy intensity by
25.0 percent in 2030 and 45.0 percent in
2035 (based on 2005 level) as aspirational
goal; c) promote energy efficiency; and, d)
incorporate low-emissions development
strategies to economic development plans,
among others.

To contribute to the attainment of these broad
policy and program frameworks, the DOE will
work on ensuring the implementation of the
following plans and programs:

Power Sector Development

The development plans on power systems,
transmission highways, distribution facilities
and missionary electrification provide the
platform to put in place long-term reliable
power supply, improve the countrys
transmission and distribution systems and
attain nationwide electrification. Specifically,
the PEP highlights the implementation of
critical power infrastructures to address
possible power outages. Based on the Plan, the
government will concentrate its efforts on the
completion of committed power projects, as
well as attract local and foreign investors to
venture into indicative and potential power
projects to include electrification projects.

Fuelling Sustainable Transport Program

As one of the biggest user of energy, the energy
sector is mainly concerned on other alternative
options to fuel the transport sector. Thus, the
PEP will pursue the implementation of the
Fueling Sustainable Transport Program (FSTP)
which seeks to convert public and private
vehicles from diesel and gasoline to
compressed natural gas (CNG), liquefied
petroleum gas (LPG) and electric power. Under
the program, CNG buses are envisioned to ply
throughout the country. It also includes the
promotion of electric vehicles for public
transport and the increase in biofuels blends to
20.0 percent.

With the FSTP, the government hopes to reduce
the carbon footprint from road transport in the
Philippines. It has been estimated that road
transportation accounts for around 50.0
percent of the total air pollutants in the
country.

Indigenous Energy Development Program

As energy demand is anticipated to grow
significantly over the indicated planning period,
it is incumbent for the energy sector to pursue
all means to develop the countrys indigenous
resources. In view of this, the Plan looks into a
highly diverse energy mix to fuel the Philippine
economy within the planning period. Even with
the dawning of renewable energy development,
the DOE recognizes the fact that the country
will remain dependent on conventional fuels
for many years to come to address its growing
energy requirements. The Plan programs the
conduct of energy contracting rounds as an
effective strategy to bring in critical
investments for the exploration, development
and production of local energy resources.

National Renewable Energy Plan

With the global trend towards a clean energy
future, the Renewable Energy Act was passed in
2008 to fully harness the countrys renewable
energy potential such as geothermal, hydro,
wind, solar, biomass and ocean. To guide the
full implementation of the law, the National
Renewable Energy Program (NREP) was
launched on 14 June 2011 by President Aquino.
The PEP includes the targets set under the
NREP to strengthen its energy security plan.
Specifically, the NREP seeks to increase the
countrys renewable energy-based capacity by
2030.



PHILIPPINE ENERGY PLAN 2012-2030 4
Energy Efficiency and Conservation
Program

With the escalating prices of imported fuels, the
call for energy efficiency and conservation has
graduated from merely just a personal virtue to
that of a national commitment. The PEP
includes the National Energy Efficiency and
Conservation Program (NEECP) as one of the
centerpiece strategies in pursuing energy
security of the country and looks into it as a
major solution to the energy challenges of the
future. To lay the groundwork for a national
energy efficiency plan, the PEP recognizes the
need for an energy conservation law as a
critical measure in managing the countrys
energy demand. The proposed legislation aims
to incorporate policies and measures to
develop local energy auditors and energy
managers, establish the ESCO industry,
encourage the development of energy efficient
technologies and provide incentives for the
effective promotion of efficiency initiatives in
the energy market sector.

Natural Gas Masterplan

A complementary initiative to ensure the
countrys energy security is the review and
update of the Master Plan Study for the
Development of the Natural Gas Industry in the
Philippines. Said update includes an evaluation
of the natural gas infrastructure requirements
in the Visayas and Mindanao regions in view of
the DOEs plan to implement a Natural Gas
Infrastructure Development Plan in these
regions. The Masterplan, with technical
assistance from Japan International
Cooperation Agency (JICA) and World Bank,
evaluates the opportunities, critical
infrastructures and required investments for
the development of the natural gas industry.

Energy Sectors Performance

The 2012-2030 PP provides the big picture on
how the energy sector will proceed towards
meeting its goals and mandate. Highlighted
below were the accomplishments of the sector
for the period 2011-2012.
There was an increase in primary energy
supply of 7.8 percent from 39.8 Million Ton
of Oil Equivalent (MTOE) in 2011 to 42.9
MTOE in 2012. However, the countrys
energy self-sufficiency level in 2012
declined to 56.3 percent from previous year
level of 59.6 percent. Such reduction was
attributed to a decreased share of natural
gas and an increased importation of oil to
meet the increasing domestic requirement
specifically for the transport sector.

Crude oil importation dropped by 6.7
percent from 69.61 million barrels (MMB)
in 2011 to 64.94 MMB in 2012. Of the total
imports, around 79.4 percent was sourced
from the Middle East, bulk of which or 45.9
percent came from Saudi Arabia. On the
other hand, finished petroleum product
imports posted an increase of 18.9 percent
or 54.75 MMB from 46.06 MMB in 2011.
Diesel fuel exhibited the largest growth at
35.7 percent.

Local refinery production decreased by
10.5 percent from 67.37 MMB in 2011 to
60.29 MMB in 2012. This was due to the
maintenance shutdown of the two (2)
refineries. Average refining output in 2012
stood at 164.7 thousand barrels (MB) per
day compared with 184.6 MB per day in the
previous year.

The countrys demand for petroleum
products went up by 4.0 percent to 111.0
MMB from 106.32 MMB in 2011. This could
be translated to an average daily
requirement of 303.3 MB, higher than
previous years level of 291.3 MB.

The power sector has always played a key
role in driving the countrys economy. Its
stability and reliability are always of
interest for a country that has an increasing
trend with respect to its power demand.





PHILIPPINE ENERGY PLAN 2012-2030 5
Installed Capacity

Total installed capacity of the country increased
by 6.0 percent in 2012 to 17,025.0 megawatts
(MW) from the 2011 level of 16,226.9 MW.

Among the major island grids, Luzon registered
the biggest increase in installed capacity at 5.4
percent from 11,881.1 MW in 2011 to 12,527.8
MW in 2012. For the same periods,
dependable capacity of the grid likewise
increased by 4.8 percent from 10,824.4 MW to
11,348.7 MW. Said increase was attributed to
the commercial operations of 651.6 MW coal
power plant of GN Power, the 21.3 MW CIP II
diesel power plant, and the 19.8 MW Green
Future and 1.2 MW Pangea biomass power
plants. The uprating of Binga Hydro Electric
Power Plant from 100 MW to 125 MW also
contributed to the increase.

In the Visayas, installed capacity stood at
2,448.0 MW, an increase of only 2.3 percent
from 2011 level of 2,393.8 MW. Meanwhile, the
dependable capacity went up by 3.3 percent
from 2,036.8 MW in 2011 to 2,103.3 MW in
2012.

In Mindanao, ensuring enough power supply
remained a major challenge with the island
grids ever growing demand and with not much
additional capacity coming in. In 2012,
installed capacity was recorded at 2,049.3 MW
with minimal increase of 27 MW in capacity
from previous year level of 2,022.0 MW. The
additional capacity was due to the commercial
operations of 3.2 MW King Energy (oil-based
power plant), the 9.2 MW Cabulig Hydro
Electric Power Plant, and the capacity
expansion of Crystal Sugar (biomass) from 21
MW to 35.9 MW.

The government also came up with immediate
and short-term measures to address the
capacity gap in Mindanao. One of the solutions
considered was the re-commissioning of the
Iligan Diesel Power Plant which has a rated
capacity of 100 MW.

The other immediate measures that the
government considered to address the short-
term supply gap were:

Interruptible Load Program (ILP). Designed
to entice greater participation from the
different distribution utilities (DUs) with
embedded generating capacities or those
large users within their franchise having
backup generating capacities to utilize such
capacities. Under this program, the DUs
with approved Energy Regulatory
Commission (ERC) power rates will operate
their embedded generating capacities,
while the large users running their backup
generator sets will be paid by the DU within
its franchise area. The reduction of the
power load requirements of the DUs with
embedded generator will be transferred to
other DUs requiring additional supply.

Interim Mindanao Electricity Market
(IMEM). The establishment of an electricity
market in Mindanao is seen as a mechanism
to provide for a central dispatch and price
for available capacities. Transaction in the
IMEM will only be undertaken during
supply shortfall. Power generating
companies with uncontracted capacities as
well as DUs and large users with available
embedded generating capacities may
nominate/bid to the IMEM their available
capacities for dispatch at approved bid
price.

It is expected that starting second half of
2014 onwards to 2015 and 2016, new
capacities from committed power projects
will be on commercial operations to
provide the needed power supply
requirement of the grid.

Power Generation

Gross electricity generation in 2012 went
up by 5.4 percent from previous years level
of 69,175.7 gigawatt-hours (GWh) to
72,299. GWh.

PHILIPPINE ENERGY PLAN 2012-2030 6
Luzon grid generation posted an increase of
4.6 percent, while Visayas demonstrated a
huge increase of almost 10.0 percent (15.0
percent in 2011) due to the 610 MW
additional capacities from coal-fired power
plants to the grid. On the other hand,
despite experiencing suppressed demand
from capacity constraints, the Mindanao
grid exhibited 4.9 percent improvement in
generation, which was attributed to the
relatively stable hydro facilities and from
contribution of biomass-based power plant.
Generation from oil-based power plants
also expanded on the same year.

The countrys total generation from oil-
based power plants accelerated by 25.2
percent from 3,397.6 GWh in 2011 to
4,254.0 GWh in 2012. The increase in
generation was evident in Luzon grid with
39.5 percent, followed by Mindanao with
20.8 percent and Visayas with only 7.5
percent. Oil-based power plants were
frequently dispatched in Luzon to provide
additional supply in view of the planned
outage of 612 MW (block A) Ilijan Natural
Gas Plant for about a month and to meet
supply requirement during summer
months. On the other hand, to reduce
supply constraints in the Mindanao grid,
generation from oil-based power plants
was expanded.

With additional generating capacity,
generation from coal increased by 11.5
percent from 25,342.2 GWh in 2011 to
28,264.9 GWh in 2012. Meanwhile,
generation from natural gas dropped by 4.6
percent in 2012 from 20,591.3 GWh in
2011 to 19,641.5 GWh. The decrease was
attributed to supply restriction from
Malampaya as a result of maintenance
shutdown in mid- July 2012, and the non-
operation of Ilijan Natural Gas Power Plant
due to scheduled outage on 18 November
18 December 2012. Contribution from
geothermal power plants improved by 3.1
percent, providing 10,250 GWh in 2012
from previous years level of 9,942.3 GWh.
This was despite the decommissioning of
the 49-MW Northern Negros Geothermal
Power Plant, On the other hand,
generation from hydroelectric power plants
registered an increase of 5.7 percent from
9,697.5 GWh in 2011 to 10,252.1 GWh in
2012. Such came from an increase in
generation in the Luzon grid by 9.4 percent
with the uprating of Binga Hydroelectric
Power Plant from 100 MW to 125 MW, and
Mindanao grid by 2.2 percent with the
commissioning of Cabulig Hydroelectric
Power Plant. Higher and relatively stable
water level during rainy months
contributed to increased generation.

Other renewable energy combined
generation, such as wind, solar and
biomass, likewise rose by 26.8 contributing
250.5 GWh. However, their combined share
only stood at 0.36 percent to the total
generation. The significant increase was
driven by the biomass generation with
additional capacities from the commercial
operation of 19.8 MW Green Future, 1.2
MW Pangea in Luzon and the capacity
expansion of Crystal Sugar in Mindanao.

The overall barangay electrification level in
2012 stood at 99.99 percent with only six
(6) remaining to be unenergized. These
barangays are located in the Autonomous
Region for Muslim Mindanao (ARMM),
specifically in the province of Maguindanao.

Further to the goal of increasing electricity
access, the government also focused its
electrification initiatives to cover
households as well as sitios. It is
envisioned that 90.0 percent household
electrification by 2017 and 100.0 percent
sitio electrification by 2015 will be
achieved. As of 2012, household
electrification stood at 78.75 percent
1
with
9,691,105 out of the 12,305,500 households

1
Household and sitio electrification level is based on NEAs
December 2012 Energization Status. The figure for HH only
reflects those covered by electric cooperatives (ECs) and does
not include those covered by private DUs.
PHILIPPINE ENERGY PLAN 2012-2030 7
already provided with electricity. In the
case of sitios, 79,279 out of the 113,002
potential sitios had access to electricity
posting electrification level at 71.13
percent.

Missionary electrification is one of the
major undertakings in the power sector.
The Qualified Third Party (QTP) program is
implemented to open unviable areas for
private sector investment and provide
integrated generation and distribution
electric services to households without
access to power. In December 2012,
Powersource Philippines, the first QTP
project in Barangay Rio Tuba, Bataraza in
Palawan installed and commissioned a
biomass gasifier system and began
operating eight (8) hours per day.
Evaluation of the second QTP application by
the same energy company has been
completed for the Malapascua Island, Daan
Bantayan in Cebu. The project will be
providing 24/7 electricity services to about
800 households in the island.

Ongoing coordination has been conducted
for the third QTP project under the
Semirara Mining Corporation. The project
is expected to provide electricity to about
3,884 households in three (3) barangays in
the island.

Crude oil production in 2012 stood at 1.64
MMB, 90.5 percent of which came from the
Galoc Field (producing about 1.48 MMB for
the year). On the other hand, natural gas
production from Malampaya for the same
year stood at 134.56 BCF with associated
condensate of about 4.75 MMB.

During the 4
th
Philippine Energy
Contracting Round (PECR) held in June
2011, the DOE received 20 bid proposals
for petroleum exploration from the 15
offered areas. Of the 20 bid proposals, five
(5) have been recommended for approval.
Currently, the DOE is monitoring and
supervising 27 Petroleum Service
Contracts.
Considering that coal remains to be a
leading contributor to the countrys energy
supply, the government continues to
optimize the exploration, development,
production and utilization of indigenous
coal reserves. In 2012, indigenous coal
production (run-of-mine) was recorded at
7.4 million metric tons (MMMT). Of the
total coal production, Semirara Mining
Corporation provided the largest share of
about 7.0 MMMT or 95.0 percent.

Following the launching of PECR 4 for coal
in December 2011 which offered 38
prospective coal areas, 57 out of 69
proposals were accepted. The Review and
Evaluation Committee has recommended
the approval of new coal operating
contracts (COCs) for 18 areas. As of 2012,
the DOE monitors and supervises 68 COCs
and issued a total of 84 small-scale coal
mining permits (SSCMPs).

The NREP launched in June 2011 is the
energy sectors roadmap in the next 20
years to develop sustainable energy system
and access to clean and green energy. It is
aimed at increasing the renewable energy
installed capacity to 9,525 MW (as
aspirational target), which is more than
double the 2010 level as base year.

In 2012, the DOE awarded 101 RE service
contracts with total installed capacity of
2,565.94. Of the total, five (5) service
contracts are for conversion (with total
installed capacity of 1,061 MW) to avail of
the incentives under the Renewable Energy
Act. These RE Service Contracts are broken
down as follows:
o Geothermal with eight (8);
o Hydro with 53;
o Biomass with seven (7);
o Wind with six (6); and,
o Solar with 27.

For the period 2010-2012, service contracts
awarded already reached 258 comprising of
215 new service contracts and the
remaining were for conversion.
PHILIPPINE ENERGY PLAN 2012-2030 8
As of 2012, after 14 years under a
deregulated downstream oil industry
environment, there is a total of 1,908
players engaged in various activities like
marketing, distribution and storage Total
investment was estimated at PhP 42.60
billion.

The DOE has been continuously monitoring
the activities of the sector to ensure that
there is adequate and stable supply of
petroleum products in the country.
Information on the sectors activities such
as crude and product imports, exports and
costs, price movements, refinery
production, industry demand, distribution
and inventory levels have also been
maintained to promote fair and healthy
competition in the sector.

An Independent Oil Price Review
Committee (IOPRC) was formed in 2012 to
study if there is accumulation of excessive
profits and unfair pricing. The final report
of the study was submitted to DOE in
August 2012 with the following major
findings, among others:

o Oil Deregulation Laws goals of
increased competition and fair price
(lower than in an oligopoly) are being
achieved;
o Deregulation has resulted in increased
responsiveness of local pump prices
(Metro Manila prices) to world oil
prices;
o Pump price response to changes in the
world oil prices have been symmetrical;
and,
o Oil companies profits are reasonable.

To develop the downstream natural gas
industry, Pilipinas Shell conducted a
technical feasibility on the installation of a
Floating Storage Regasification Unit (FSRU)
in Batangas through a Memorandum of
Understanding (MOU) signed with DOE in
June 2012. The viability of the proposed
FSRU is linked with the implementation of
the Batangas-Manila (Batman 1) pipeline
network. The results of the study will be
available in the first semester of 2013
2
. On
the other hand, the Philippine National Oil
Company (PNOC) with assistance from JICA
is conducting a feasibility study for Batman
1 in 2013.

Meanwhile, the PNOCEnergy Corporation
(PNOC-EC) will replace the Mamplasan CNG
Refueling facility and put up a new one in
the Port Area of Batangas City under the
Natural Gas Vehicle Program for Public
Transport (NGVPPT) pilot project. Said
CNG refueling stations are expected to be
operational by 1
st
quarter of 2014.

In the promotion of alternative fuels for the
transport sector, total production of
biodiesel in 2012 reached 137.88 million
liters, while that of bioethanol was at 32.44
million liters. The DOE issued a Certificate
of Registration to one (1) biodiesel plant
(Philippine Biochem Products, Inc.) in May
2012 with total capacity of 12 million liters
per year.

In terms of utilization on the mandatory use
of 2.0 percent biodiesel blend and 10.0
percent bioethanol blend, total actual sales
in 2012 for biodiesel stood at 137.47
million liters, while for bioethanol about
38.89 million liters (including inventory).

The DOE collaborated with the academe on
several biofuels projects to wit:

1. With Mariano Marcos State University
(MMSU) in May 2012 on Village Scale
Production of MMSU Hydrous Ethanol as
Feedstock for R & D in Biofuel Trials and
Anhydrous Ethanol Production;

2. With Xavier University in July 2012 on
Bioethanol Production Potential of
Different Cassava Varieties under
Northern Mindanao Condition and

2
Completed in July 2013
PHILIPPINE ENERGY PLAN 2012-2030 9
Development of a Pilot-scale Cassava
Bioethanol Plan; and,

3. With the University of Philippines
Visayas Foundation, Inc. in August 2012
on the project Bioethanol Production
from Macro-algae and Socio-ecological
Implementations.
There are 41 CNG public utility buses
commercially operating along South Luzon
routes. To enhance incentives for CNG bus
operators, the Department of
Transportation and Communication (DOTC)
signified its preferential approval of
franchise applications for CNG-fed buses
except for routes that pass along Epifanio
Delos Santos Avenue (EDSA). Likewise, the
Metropolitan Manila Development (MMDA)
granted exemption to CNG buses under the
the Unified Vehicle Volume Reduction
Scheme.

Meanwhile, the Auto-Liquefied Petroleum
Gas (Auto-PLG) Repowering Program has
benefitted the public transport through
lower fuel cost of about PhP15.00/liter
(LPG cost compared with conventional
gasoline fuel). The program was able to
facilitate the establishment of 321
accredited auto-LPG conversion shops.

On the Electric Vehicle Program, there are
20 e-trike units in Mandaluyong City as
pilot project to assess the techno-economic
viability of electric-powered tricycles.
Under the ADB Loan Assistance Program,
100,000 e-trike units will be purchased to
replace two-stroke tricycle units thereby
reducing petroleum consumption and
achievjng lower emission level. In
November 2012, the loan negotiation
between the government and ADB was
concluded. Subsequently, the said loan was
approved by the ADB Board on 11
December 2012.

A silver lining in energy management is the
promotion of energy efficiency and
conservation (EE&C) as a way of life for
Filipinos. Under the governments NEECP,
the country was able to save 4.79 MTOE in
2012. This is about 14.6 percent higher
than the 2011 level of 4.10 MTOE. Several
sub-components of the program have all
contributed to the increase in energy
savings, such as the use of energy labelling
and efficiency standards, implementation of
the government energy management
program, conduct of IEC activities and the
calibrated phase-out of inefficient energy
technologies promoted by the Philippine
Energy Efficiency Program (PEEP).

As part of the PEEP, the DOE completed the
distribution of 3.6 million compact
fluorescent lamps (CFLs) through the 188
congressional districts and 51 party list
representatives. Further, CFLs were also
distributed to the disadvantaged
individuals, families and communities
under the Department of Social Welfare and
Developments (DSWD) National Poverty
Reduction Strategy and Countryside
Partnership.

As part of the Bright Now! Do Right! Be
Bright! Campaign, the DOE in partnership
with ADB launched the Watts Out! TV
Olympics in August 2012 to demonstrate
the most energy efficient technologies
available in the local television market. The
Watts Out! activity sought to demonstrate
the impact of the appliances power
consumption to the monthly electricity bill.
Television manufacturers participated in
the activity and displayed their most
efficient 32-inch CCFL- and LED-backlit
Liquid Crystal Display (LCD) models. The
power consumption of each of the
television model was monitored during the
course of event.

In September 2012, a total of 223
households were energized in the provinces
of Antique (61), Aklan (29), Palawan (57)
and Davao del Norte (76) through the free
installation of efficient technology
demonstration package. The package
includes six (6) pieces of LED lamps,
lockable battery, mounting structure,
PHILIPPINE ENERGY PLAN 2012-2030 10
charge controller with built-in AM/FM
radio and outlets for mobile phone charger
using photovoltaic solar home systems in
lieu of kerosene and candles.

The DOE, in partnership with JICA,
conducted the Development Study on Energy
Efficiency and Conservation for the
Philippines. The study provided a concept
design for the proposed legislation.

Energy Outlook

For this PEP Update, two (2) scenarios were
developed for the supply side the Business-
as-Usual (BAU) and the Low Carbon Scenario
(LCS). The BAU scenario simulates the future
energy supply based on market forces
interaction. On the other hand, LCS scenario
considers the policy interventions and
aggressive implementations of plans and
programs for clean and environment-friendly
energy fuels and technologies. On the demand
side, the LCS scenario serves as the reference
case with inclusion of the sectors goal of 10.0
percent energy savings on the total energy
demand of all economic sectors by the end of
the planning period.

Over the planning period, the total final energy
consumption (TFEC) will exhibit an annual
average growth rate of 2.8 percent. TFEC will
reach 39.1 MTOE by the end of the planning
period.

The transport sector will account the biggest
share at an annual average of 35.5 percent to
the total energy consumption, and will post an
annual average growth rate of 2.9 percent. The
industry sector follows next with an average
share of 34.1 percent and will exhibit the
fastest growth at 5.1 percent annual average
rate. Commercial, agriculture and residential
sectors will post average growth rates of 2.7,
0.8 and -0.6 percent, respectively, for the
planning horizon.

Oil will still be the major fuel accounting for an
average share of 43.5 percent of the total
energy demand. Such share of oil is lower than
2011 level of almost 50.0 percent share. This is
attributed to target increase in biofuels blends
20.0 percent for biodiesel by 2025 and
bioethanol by 2020, the increase in the number
of CNG buses and taxis, and the entry of electric
vehicles starting with e-trikes.

For the transport sector, about 42.0 percent of
the total energy demand of the sector is diesel
followed by gasoline with 28.4 percent average
share. With increased biofuels blends and the
target increase in the number of CNG buses and
taxis to 15,000 and 16,000 units, respectively,
and e-vehicles to 230,000 units nationwide by
the end of the planning period, significant
amount of oil consumption (diesel and
gasoline) will be displaced. The LPG for
transport is also seen to increase over the
planning period registering an annual average
share of almost one (1) percent. For the 16
th

Congress, an LPG Industry Bill will be proposed
to regulate the utilization and safety
requirement of the said fuel for transport.

Electricity consumption comes next with 22.9
percent average share and growing annually at
3.8 percent. The growth in electricity
consumption has also factored in the 10.0
percent efficiency improvement with the
aggressive implementation of the NEECP. The
passage of an EE & C Law, which will likewise
be filed in the 16
th
Congress, will further
strengthen the NEECP and vital to realizing the
target efficiency improvement.

Coal consumption will also continue to grow at
an annual average rate of 7.8 percent. On the
other hand, biomass consumption is projected
to decrease over the planning period due to
shift in more efficient fuel.

Total primary energy supply will grow at
annual average rate of 3.4 percent to reach 77.5
MTOE in 2030 under the BAU. In comparison,
the growth rate of total energy supply in LCS
will be higher by 2.0 percentage points. Such is
due to the utilization of more RE resources,
such as hydro, geothermal, wind and solar,
contributing about 37.3 percent average share
to the total energy supply.
PHILIPPINE ENERGY PLAN 2012-2030 11
Oil and Oil Products

For the planning period, oil will still be the
primary fuel source with an average share of
28.2 percent to the total energy supply and
with an average growth rate of 2.1 percent in
the BAU scenario. However, under LCS, the
share of oil is expected to decline contributing
an average of 27 percent share at an annual
moderate growth rate of 1.9 percent on the
average. This is attributed to increased
penetration of alternative fuels and renewable
energy.

The domestic upstream sector targets to
harness potential oil and gas fields through the
awarding of 61 Service Contracts from the
conduct of the PECR during the planning
period.

Natural Gas

Natural gas is seen to contribute an average
share of 9.0 percent to the total primary supply
increasing at an annual average growth rate of
of 4.9 percent under BAU. The supply of gas
will be basically sourced from Malampaya and
additional gas (uncontracted gas) from other
potential fields.

The liquefied natural gas (LNG) importation is
seen to provide additional gas supply
requirement for the country in the LCS
especially if no new gas fields will be
discovered during the planning horizon. The
share of natural gas in LCS is about 10.3 percent
with a projected annual growth rate of 6.9
percent. Thus, it is critical to put in place vital
infrastructures such as gas pipelines and LNG
terminals for the development of the natural
gas industry.

The updating of the Master Plan Study for the
Development of the Natural Gas Industry in the
country has been completed in March 2012
through the technical assistance of JICA.
Meanwhile, a complementary study was
conducted by World Bank on the feasibility of
supplying natural gas in Mindanao, which was
completed in June 2012. The WB study
reviewed the current and existing LNG
transportation, receiving, storage and
regasification approaches, including analysis of
a suitable LNG terminal site in the region.
Further, the WB study also revisited the
identified LNG sites in the Bataan peninsula.
Another WB complementary study titled
Mindanao Natural Gas Development Strategy
was also conducted with the primary goal of
determining the regions possible access to the
international gas market.

A Downstream Natural Gas Industry Law will
also be filed in the 16
th
Congress to provide the
regulatory framework and incentives to
prospective investors. Infrastructure
development is strategic to ensure the supply of
gas that will fuel prospective capacity additions
from natural gas power plants, industry uses,
and the CNG buses and taxis.

Coal

Coal will contribute an average share of 30.1
percent to the countrys primary energy supply
under the BAU and will increase at a rate of 7.2
percent annually during the planning period.
The government targets to increase indigenous
coal production by 100.0 percent. Increasing
the contribution of indigenous coal would
reduce coal importation. Imported coal
contributes around 70.0 percent average share
to the countrys supply requirements.

A much lower average growth rate of 4.8
percent is seen in the LCS with equivalent
contribution of 25.2 percent average share to
the primary energy supply. This is due to the
utilization of more RE resources in the power
generation, which will displace some capacities
from coal.

Renewable Energy

Under the BAU, contribution from RE will grow
at an annual average rate of 0.8 percent (and
with average share of 32.0 percent) with only
the committed RE power projects coming into
the system.

PHILIPPINE ENERGY PLAN 2012-2030 12
The passage of Renewable Energy Act of 2008
strengthens the policy of the government to
accelerate the exploration and development of
RE resources in the country. With this, around
9,300 MW from indicative and potential RE
resources (geothermal, hydro, wind, solar,
biomass, and ocean) have been identified as
aspirational targets, which could be harnessed
within the planning period.
For LCS, RE will grow at an annual average of
3.2 percent and will contribute an average
share of 37.0 percent to the total energy supply.
Geothermal will grow at an average rate of 4.2
percent contributing an average share of 64.0
percent of total RE. Meanwhile, hydro will
exhibit 3.5 percent average growth rate and
with an average share of 15.0 percent (total RE)
within the planning period. Biomass will
demonstrate 11.2 percent average share of RE.
However, biomass supply will be on a
downward trend by the end of the planning
period. Combined share of solar and wind will
be almost 1.0 percent and will exhibit an annual
average growth rate of 20.0 percent

Alternative Fuels

Biofuels

Under both scenarios, the mandated 2.0
percent biodiesel blend (which started in 2009)
will have to increase to 20.0 percent by 2025,
and the 10.0 percent bioethanol blend (started
in 2011) will be accelerated to 20.0 percent by
2020. With the required mandated blends,
biodiesel will grow at an annual average
growth rate of 15.5 percent, while bioethanol
will increase by 9.5 percent.












Power Sector

The countrys peak demand for power will
grow at an annual average rate of 4.3 percent
over the planning period. The country will
need about 13,166.7 MW of new capacities to
meet domestic power requirement energy
demand and reserve margin. From the needed
capacity, 1,766.7 MW will be provided by
committed power projects, while the remaining
11,400 MW will be available for private sector
investment. Of the 11,400 MW, 8,400 MW will
be baseload plants, 2,100 MW mid-range plants,
and 900 MW peaking plants.

The investment requirement to pursue and
undertake the sectoral targets for this plan
update is estimated at Php 2.80 trillion. As
such, the government must intensify its
initiatives to promote and showcase the various
energy investment opportunities with the
private sector.

Considering the vulnerability of the energy
sector to conditions like extreme weather
patterns, an energy sector-wide climate change
adaptation strategy is envisioned to be put in
place. Said framework aims to address the
climate change impacts in energy systems, such
as power transmission and distribution
systems, fuel distribution and renewable
energy systems.