Philippine Energy Plan 2007 - 2014

PHILIPPINE ENERGY PLAN
2007-2014
ABOUT THE COVER
The cover design depicts the crucial role of energy in fuelling global development efforts and the necessary engine essential for sustained economic growth. It is in this light that the Department of Energy remains firm and resolute to aggressively pursue the energy agenda focused on enhancing the countrys access to energy. This is instrumental in reducing poverty as well as promoting social equity. The development of indigenous energy resources is critical in achieving greater energy supply security for the country. Likewise, the implementation of relevant energy reforms will encourage more investors to engage in energy projects in a business-friendly environment. The trickle-down effect is a wider range of economic opportunities in the countryside. This Plan Update outlines the strategies to ensure that energy requirements of future generations are provided adequately and in affordable manner in the context of an integrated energy-environment development approach. This is an affirmation to the countrys commitment to sustainable development.
PHILIPPINE ENERGY PLAN

2007-2014
Fuelling Philippine Development through Greater Access to Energy
PEP 2007 - 2014
TABLE OF CONTENTS
Message from the Secretary List of Tables and Figures OVERVIEW ENERGY SUPPLY AND DEMAND A. Situationer (2006) B. Outlook ENERGY INDEPENDENCE A. Revitalizing the Exploration and Development of Indigenous Resources B. Increase Use of Alternative Transport Fuels C. Energy Efficiency and Conservation Program POWER SECTOR REFORMS A. Power and Transmission Development Plans B. EPIRA Developments C. Expanded Rural Electrification D. Benefits to Host Communities DOWNSTREAM ENERGY INDUSTRY A. Oil Industry Deregulation B. Natural Gas Industry Development OTHER A. B. C. D. ENERGY PROGRAMS Environmental Management and Protection Fostering Strategic Alliances with Other Countries Consumer Welfare and Protection Nuclear Power as a Long-Term Energy Option ii iii 1
4 9 13 23 28 33 40 44 48 50 53 56 59 61 62 65 78 123 137 138 139 143 144
INVESTMENT PORTFOLIO Annex A: ANNUAL TARGETS Annex B: HISTORICAL PERFORMANCE Department of Energy Officials List of Units of Measurement List of Acronyms Conversion Table Acknowledgements
Energy is indispensable to our economic growth and to the countrys drive towards global competitiveness. It is crucial to sustaining a nations progress and prosperity and an instrument for poverty reduction and social equity. In recent times, the energy sector has been confronted with several challenges, which continue to be multi-dimensional. The specter of high energy prices brought about by depleting resources, mostly fossil fuelbased, is causing economies, both large-scale and fast developing ones, to scamper and compete for their equal share in the world energy resource pie to fund their own development agenda. An equally compelling concern which has reached universal proportions is to look for cleaner energy alternatives to mitigate the long-term effects of energy development to global warming. A countrys economic progress has thus become intertwined with the level of its energy security and environmental sustainability. In this context, the 2007 Philippine Energy Plan Update has been formulated to serve as a potent tool in carrying out the national economic plan of the government. The energy choices as indicated in the Plan are also biased to the overall thrust of the government to ensure an integrated energy-environment approach. With the 2005-2014 PEP as its reference plan as well as the actual accomplishments of the sector from 2006 to 2007 as bases, the 2007 PEP Update builds on existing plans and programs and incorporates new directives to reflect emerging developments. It remains focused on attaining a 60.0 percent self-sufficiency level by 2010 in the pursuit of energy independence and ensuring reasonably-priced electricity through the effective implementation of power sector reforms. Recent developments have been cited, to include: the passage of the Biofuels Act in January 2007 to provide the impetus to the countrys Alternative Fuels Program; the surge in the privatization level of the generation assets of National Power Corporation (NPC) from 11.0 percent in 2006 to 42.7 as of end-2007; and the 96.6 percent barangay electrification status resulting from a strong collaborative public-private partnership. The Plan provides specific directions for the accelerated exploration and development of indigenous energy resources to reduce our vulnerability to high oil prices, intensified use of renewable energy resources and alternative fuels for a cleaner environment, enhanced promotion of energy efficiency and conservation as a way of life, implementation of rural electrification projects to light up remote and far-flung communities in the countryside and continuous accomplishment of reforms in the power sector. A major addition to the Plan Update is the consideration of the viability of nuclear power as a long-term policy for clean energy option. In the immediate term, the emphasis will be on building the requisite human resource capability and preparing the substantive framework and technical aspects of a nuclear power program. The Department of Energy is confident that the goal to a brighter and cleaner energy future has been laid down in this Plan Update but all these initiatives will come to naught without the support and cooperation of everyone who has a stake on energy- the economic sectors composed of the consumers, transport, industrial, commercial and agriculture; national government agencies, non-government organizations, and civil society, among others. The government alone cannot single-handedly implement the imperatives of this Plan as these would require multi-sectoral commitment and engagement. We thus, enjoin and encourage every concerned and responsible Filipino to put his stake in this Plan and make this a reality. Maraming Salamat and Mabuhay!
ANGELO T. REYES Secretary
PEP 2007 - 2014 ii
MESSAGE FROM THE SECRETARY
PEP 2007 - 2014
LIST OF TABLES AND FIGURES

LIST OF TABLES
Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 Table 9 Table 10 Table 11 Table 12 Table 13 Table 14 Table 15 Table 16 Table 17 Table 18 Table 19 Table 20 Table 21 Table 22 Table 23 Table 24 Table 25 Table 26 Table 27 Table 28 Table 29 Table 30 Table 31 Table 32 Table 33 Table 34 Table 35 Table 36 Table 37 Table 38 Table 39 Table 40 Table 41 Table 42 Table 43 Table 44 Table 45 Table 46 Table 47 Table 48 Table 49 Table 50 Table 51 Table 52 Table 53 Active Service Contracts, as of June 2007 Oil and Gas Measurable Targets Coal Measurable Targets Renewable Energy Installed Capacity Indicative Geothermal Capacity Additions Geothermal Measurable Targets Indicative Hydropower Projects Mini-Hydropower Projects On-Going Construction Indicative Biomass Projects Indicative Wind Power Projects Biodiesel Measurable Targets Bioethanol Measurable Targets Existing Capacity, as of December 2006 Power Generation, 2006 Electricity Sales (Actual vs. Forecast) Electricity Sales, by Sector Peak Demand, 2002-2006 Peak Demand Growth Rates Systems Loss System Capacity Addition Transmission Line Projects Privatized NPC Assets Status of Universal Charge Remittances and Disbursements, as of 30 September 2007 Status of Loan Condonation, as of 31 March 2007 WESM Registration Effective Settlement Prices Metered Quantities: Energy Consumption Average Energy Offers WESM Governance Committees Status of Electrification by Island Grid, as of 31 July 2007 Electrification Level by Region, as of 31 July 2007 Electrification by Franchise Holder, as of 31 July 2007 Timetable of Electrification Requirements Projected Infrastructure Requirements Summary of Approved Benefits to Host Communities per Project Type Total Number of New Players per Activity, 2006 Number of Gasoline Stations, 2006 Total Country Storage, 2006 Philippine CDM Project Activities CO2 Emissions from Energy Use, 2005 and 2006 Sectoral Investment Requirements, 2007 2014 Oil and Gas Investment Requirements Coal Investment Requirements Geothermal Investment Requirements Hydropower Investment Requirements Biomass Investment Requirements Wind Investment Requirements Alternative Fuels Investment Requirements Energy Efficiency and Conservation Investment Requirements Power Generation Investment Requirements Transmission Development Investment Requirements Barangay Electrification Investment Requirements Natural Gas Industry Investment Requirements
iii
LIST OF FIGURES
Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Framework of the PEP 2007 Update Energy Intensity, 2001-2006 Energy-to-GDP Elasticity, 2001-2006 Per Capita Consumption, 2001-2006 Primary Energy Mix, 2005-2006 Power Generation Mix, 2005-2006 Final Energy Demand by Sector, 2005-2006 Energy Consumption of the Transport Sector by Sub-Sector, 2006 Energy Consumption of the Residential Sector by Fuel Type, 2006 Energy Consumption of the Industrial Sector by Fuel Type, 2006 Energy Consumption of the Commercial Sector by Fuel Type, 2006 Energy Consumption of the Agriculture Sector by Fuel Type, 2006 Primary Energy Supply Mix, 2007 Primary Energy Supply Mix, 2010 Primary Energy Supply Mix, 2014 Final Energy Demand in Transport Sector Final Energy Demand in Residential Sector Final Energy Demand in Industry Sector Final Energy Demand in Commercial Sector Final Energy Demand in Agriculture Sector Power Generation Mix Natural Gas Infrastructure Projects Share of Nuclear In Global Electricity Generation Status of Nuclear Development in East Asia
PEP 2007 - 2014 iv
LIST OF TABLES AND FIGURES
Overview
I. Overview
The 2007 Philippine Energy Plan (PEP) Update is an affirmation of the states commitment to pursue the energy independence agenda under the Governments Five-Point Reform Package. The energy sectors agenda focuses on attaining a sustainable 60.0 percent energy self-sufficiency beyond 2010 and promoting a globally competitive energy sector. The first objective is anchored on the effective implementation of the following goals: (a) accelerating the exploration; development and utilization of indigenous energy resources; (b) intensifying renewable energy resource development; (c) increasing the use of alternative fuels; and, (d) enhancing energy efficiency and conservation. On the other hand, the continuing reforms in the power sector as well as the downstream oil and gas industries will pave the way in realizing a globally competitive Philippine energy sector. Those energy goals and the corresponding strategies support the Medium-Term Philippine Development Plan (2005-2010) and the Medium-Term Public Investment Program. The PEP is also consistent with international agreements such as the 2002 Johannesburg Summit and the 2000 UN Millennium Development Goals, specifically in addressing poverty, and ensuring environmental sustainability.
Figure 1. FRAMEWORK OF THE PEP 2007 UPDATE
ECONOMIC GROWTH AND JOB CREATION FIVE-POINT REFORM PACKAGE ENERGY SECTOR AGENDA ANTI-CORRUPTION THROUGH GOOD GOVERNANCE ENERGY SELF-SUFFICIENCY Increase resources of indigineous fossil fuels Aggressively develop renewable energy potential such as biomass, solar, wind, and ocean resources Increase use of alternative fuels Strengthen and enhance energy efciency and conservation program GLOBALLY COMPETITIVE ENERGY SECTOR Establish a transparent privatization process Create an investment climate attractive to investors
ENERGY INDEPENDENCE
SOCIAL JUSTICE AND BASIC NEEDS EDUCATION AND YOUTH OPPORTUNITY
The Update takes stock of the energy sectors accomplishments
in 2006 vis--vis the targets set in the 2006 PEP Update as Reference Plan. It also evaluates the extent to which the sector has responded to the challenges that have hindered the effective implementation of the plans and programs as identified in the Reference Plan. On the bases of these actual assessments, adjustments in targets and desired timelines were made in the Plan Framework. Indigenous fossil fuels and renewable energy were discussed based on geographical clustering under the Super Regions to highlight each cluster-regions energy resources potentials. Likewise, the current update takes into consideration the impact of recent energy developments, i.e., the landmark passage in January 2007 of Republic Act (R.A.) 9367 or the Biofuels Act of 2006, renewed interest in the upstream
development sector through the Philippine Energy Contracting Round (PECR), commitments to regional frameworks such as the ASEAN Plan of Action for Energy Cooperation (2004-2009) and the ASEAN initiative to move forward the harmonization of biofuel standards. Over the planning horizon, the Updates overall energy and power demand forecasts of annual growth rates are 3.3 percent and 5.2 percent, respectively. Essentially, it will also be guided by the same policy directions, planning horizon, sets of assumptions and sectoral plans and programs with due consideration to gender sensitive approaches. Some modifications, however, will include the amount of oil displacement resulting from the mandatory biofuels blend starting
in May 2007 for biodiesel and two years after for bioethanol. In the power sector, the list of indicative and committed projects has been revised. The line-up of transmission projects has also been updated consistent with the rulings of the Energy Regulatory Commission (ERC). The highlights of the sectors performance are as follows:
The country posted an energy self-sufficiency level of 55.4 percent in 2006. Among renewable energy resources, geothermal contributed the biggest share of indigenous energy of about 9.0 million tones of oil equivalent (MTOE) or 23.2 percent of the total primary energy mix, which is a slight improvement over its 2005 share of 21.6 percent. This is due to an increase of 5.7 percent in geothermal production. The share of imported fuels such as oil gradually declined in view of reduced consumption of oil in both power and non-power applications. Towards attaining the 60.0 percent primary energy self-sufficiency level by 2010, the Department of Energy (DOE) continued to promote intensive upstream exploration and development through the PECR. As of end-2006, there were 28 oil and gas service contracts (SCs) currently operating. Twenty-two of these SCs were granted during the period of 2004-2006. There are also 38 existing Coal Operating Contracts (COCs). The promulgation of the Biofuels Act of 2006 is expected to reduce the countrys dependence on imported fuels over the long-term by mandating the graduated use of biodiesel and bioethanol nationwide. Subsequently, in May 2007, the laws Implementing Rules and Regulations (IRR) was approved following a series of nationwide public consultations. Meanwhile, investments came in the form of infrastructure facilities to support the widespread dissemination of biofuels such as the launching of the Biofuels Center in Quezon City in February 2006. In power generation, the countrys self-sufficiency level rose to 66.0 percent in 2006 from the 65.0 percent level in 2005. Natural gas provided the largest contribution of 16,366 gigawatthours (GWh) or 29.0 percent of the total power generation while coal accounted for 27.0 percent. The 2.9 percent decrease on the use of natural gas in 2006 level was due to the 25-day scheduled maintenance of the Malampaya Gas-toPower project while the slight increase in power generation from coal-fired power plant came from the commercial operation of the 210-megawatt (MW) Mindanao coal-fired power plant.
To counter the effects of intermittent increase in the price of oil to the countrys economy, the DOE remained vigilant in ensuring consumer protection and healthy competition among the industry players. As a safety net, the DOE issued and implemented for a six-month period (June to November 2006) Executive Order (E.O.) 527 Temporarily Modifying the Rates of Import Duty on Crude Petroleum Oils and Refined Petroleum products Under Section 104 of the Tariff and Custom Code of 1978 as Amended. Likewise, various oil players offered price discounts for diesel sold at the pump nationwide for the public transport sector. For 2006, the energy conservation efforts of the government generated energy savings of about 0.88 MTOE with equivalent carbon dioxide (CO2) emission avoidance of 2.1 million metric tons (MMMT). This included savings accounted from the energy management activities conducted by DOE such as the spot check program of government agencies nationwide mandated by Administrative Order (A.O.) 126, the continuing energy standards and labeling program, and the conduct of energy audit of various commercial and industrial entities. The Wholesale Electricity Spot Market (WESM) started commercial operation in Luzon in June 2006 signaling an important phase in promoting open access in accordance with the Electric Power Industry Reform Act (EPIRA) of 2001. The governments continuing efforts to privatize the National Power Corporations (NPC) generation and transmission assets made significant headway with the successful bid-out of the 112-MW Pantabangan-Masiway Hydroelectric Plant in Nueva Ecija in September 2006, the 360-MW Magat Hydroelectric Plant in Ramon Isabela in December and the 600-MW Masinloc coal-fired plant in Zambales in July 2007. This resulted in a 24.8 percent privatization level.
Overview 2
The DOE continued to ensure the reliability of energy supply through the installation of new power plants and uprating of existing power projects. In the last months of 2006, the commissioning of the 210-MW Mindanao coal power plant located in Villanueva, Misamis Oriental brought significant improvement in the power supply in the grid. To further boost this effort is the ongoing capacity uprating of Units 1 and 2 of Agus 6 Hydroelectric Power Plants. In February 2007, the Philippine National Oil Company-Energy Development Corporation (PNOC-EDC) inaugurated the 49.4MW Northern Negros Geothermal Power Plant located in Bago City, Negros Occidental, adding to the capacity of the Visayas Grid.
Overview
The DOE has energized over 95.5 percent barangay of the country during the third quarter of 2007. Based on 2005 Census, only 1,894 barangays remain to be energized to achieve 100 percent barangay electrification target as committed in the ten-point legacy agenda of the Arroyo Administration. To provide timely, reliable and accurate energy data and information for the Department and its stakeholders, the Energy Information Management Program (EIMP) had been implemented under the theme One Database, One System, One DOE. The EIMP entails four Cs strategy, namely: Centralization, Computerization, Connectivity and Collaboration.
In its continuing effort to ensure energy supply security, institute market reforms, and promote consumer welfare and protection, the DOE will refile with the 14th Congress the following legislative measures:
Renewable Energy Bill to promote the development, utilization and commercialization of renewable energy resources such as geothermal, hydropower, wind, solar and ocean. Private sector participation will also be encouraged through the granting of additional fiscal and non-fiscal incentives; Natural Gas Bill to create favorable conditions for the establishment of the downstream natural gas industry by providing the necessary regulatory and non-regulatory measures, as well as the granting of additional fiscal and non-fiscal incentives that will encourage greater investments in the industry; Liquefied Petroleum Gas (LPG) Bill to provide monitoring and supervisory framework for the LPG industry, as well as address unfair trade practices which include underrefilling, unauthorized or illegal refilling, use of unbranded cylinders, use of unsafe and dilapidated cylinders, among others. Likewise, the DOE will be given additional powers to develop and implement a comprehensive program that will promote national consciousness on safety requirements and proper use of LPG including provision of appropriate penalties for violators; Energy Conservation Bill to institutionalize energy conservation and enhance the efficient use of energy in the country. The bill will also revitalize and strengthen the energy conservation programs developed such as the nationwide energy monitoring program, product labeling, energy efficiency promotion, etc.; and TransCo Franchise Bill to grant the National Transmission Company (TransCo) an assignable franchise to construct, install, operate and maintain a transmission system and the grid nationwide for a period of 50 years. It will also provide conveyance or transmission of electricity through the highvoltage backbone system of interconnected transmission lines, substation and related facilities, grid connections and ancillary services.
Way Forward
Given the severe impact of climate-altering greenhouse gas emissions and skyrocketing crude oil prices, the DOE has started a reassessment of nuclear energy as a long-term power option for the country. This reassessment also considers that many of our Asian and ASEAN neighbors are using or will use nuclear power to provide them with cheaper and more reliable electricity, making them even more economically competitive. Ultimately, the decision to tap nuclear power will have to be undertaken in a rational, informed and transparent manner. This requires consultation not only with all local stakeholders but with recent international partners such as the International Atomic Energy Agency (IAEA), ASEAN and others. To prepare for this eventuality, however, the training of nuclear scientists and experts who can help policy makers and authorities need to start immediately. Towards this end, the DOE in collaboration with the Department of Science and Technology (DOST)-Philippine Nuclear Research Institute (PNRI) and the University of the PhilippinesCollege of Science are preparing a long-term nuclear technology manpower development program.
An ongoing review of the governments privatization of its generation and transmission assets is aimed at responding to the various market needs and requirements with due consideration to timeliness and transparency. The Power Sector Assets and Liabilities Management Corp. (PSALM) is set to launch more aggressive marketing efforts with the goal of increasing the existing 24.8 percent privatization level to 50.0 percent by end-2007 and 70.0 percent by end-20081.
As of end 2007, actual privatization level reached 42.7 percent with the successful bidding of Calaca and Ambuklao-Binga power plants during the last quarter of 2007.
II. Energy Supply and Demand

A. SITUATIONER (2006)
ENERGY-ECONOMY INDICATORS
The countrys economy kept its dynamic pace in 2006,2 registering a 5.4 percent growth in Gross Domestic Product (GDP). The Services sector continued to boost the economy with a 6.7 percent growth while the Agriculture, Fishery and Forestry sectors expanded by 3.8 percent. On the other hand, the Industry sector grew by 4.6 percent due mainly to the stable output of the manufacturing and construction sectors with respective growths of 4.6 percent and 7.3 percent each. On the demand-side, the strong GDP growth was backed up primarily by strong private and government expenditures which grew by 5.5 percent and 6.1 percent respectively, while exports rose by 14.9 percent.3 Philippine Peso (PhP) 100,000, a little lower than the 2005 level of 3.2 TOE/PhP 100,000, (Figure 2) due to the slowdown in energy use particularly of petroleum products. Evidently, oil-to-GDP intensity dropped to 1.08 TOE/PhP 100,000. The lower oil intensity level was due to the noted restraint in petroleum products consumption, as well as the decline in the utilization of oil-fired power plants during the year. This was triggered mainly by the continued increase in the prices of oil in the international market. This may likewise have been driven by improvements in energy efficiency through the introduction of new technologies, more efficient utilization of existing technologies, or construction of relatively less energy-intensive industries. Meanwhile, electricity-to-GDP intensity likewise plummeted to 0.31 TOE/Php 100,000.
Energy Intensity
The ratio of total primary energy supply (TPES) per unit of economic output or energy intensity in 2006 was recorded at 3.04 tonnes of oil equivalent (TOE)/
Figure 2. ENERGY INTENSITY, 2001-2006
4.5 4.0
Energy-to-GDP Elasticity
The GDP growth during the year did not translate to a corresponding increase in energy consumption as indicated by the negative 0.05 energy-to-GDP elasticity (Figure 3). As cited above, the economic growth was primarily triggered by the less energyintensive commercial or services sector. The declining trend in energy-to-GDP elasticity, notably from 2005, may be attributed to the effective energy efficiency
Figure 3. ENERGY-TO-GDP ELASTICITY, 2001-2006
2.50 2.00 1.50
TOE/PhP 100,000
3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0
2001
2002
2003
2004
2005
2006
Elasticity
1.00 0.50 0.00 -0.50 -1.00
Total Energy
Oil-to-GDP
Electricity-to-GDP
2001
2002
2003
2004
2005
2006
Estimated population was 86.97 million; GDP per capita was PhP14,650 per person. National Economic and Development Authority (NEDA), FY 2006 National Income Accounts
TPES
Petroleum
Electricity
Energy Supply and Demand 4
Energy Supply and Demand
and conservation measures that were implemented by the various economic sectors. This was evidently reflected by negative elasticity in Oil Consumption-toGDP at 1.2 in 2005 and 1.1 in 2006. Meanwhile, electricity consumption posted a positive elasticity of 0.2 during the period which was lower compared to the previous years level of 0.5 (Figure 3).
the share of indigenous coal accounted for 23.4 percent in the total coal supply. There was however, a notable decrease in indigenous coal supply by 18.2 percent from the year-ago level of 1.52 MTOE which was caused by the slow down in the production of Semirara brought about by a substantial decrease in the demand for local coal. Meanwhile, geothermal energy registered an increase of 5.7 percent from 8.52 MTOE last year. Its current level accounted for 23.2 percent in the overall primary energy mix (Figure 5). Hydro went up from 2.09 MTOE in 2005 to 2.47 MTOE in 2006. Its share in the primary energy mix increased from 5.4 percent in 2005 to 6.4 percent in 2006 (Figure 5). Total supply of other renewable energy, which includes fuelwood, charcoal, and other biomass (baggase and other agriwaste), reached 5.7 MTOE, about 2.0 percent lower than the previous years level. Of the total supply of biomass, fuelwood accounted for 62.4 percent share, charcoal for 12.1 percent share and other biomass for 25.5 percent share.
Per Capita Consumption

Similarly, per capita consumption of total energy, oil and electricity dropped to 0.45 TOE, 0.16 TOE and 0.05 TOE, respectively (Figure 4).
Figure 4. PER CAPITA CONSUMPTION, 2001-2006
0.60 0.50
TOE/person
0.40 0.30 0.20 0.10 0.00
Imported Energy
2001 2002 TPES 2003 2004 2005 2006 Petroleum Electricity
PRIMARY ENERGY SUPPLY

The countrys total primary energy supply in 2006 reached 38.7 MTOE, lower by 0.3 percent from the 2005 level of 38.9 MTOE. Total indigenous production increased by 1.2 percent from the previous years level of 21.2 MTOE. Net imports4, on the other hand, slightly increased by 2.1 percent from the yearago level of 17.6 MTOE. Oil accounted for the biggest share of 35.5 percent in the supply mix (Figure 5) despite the decrease in total oil supply from 14.5 MTOE in 2005 to 13.8 MTOE in 2006. Share of indigenous oil slightly went down by 0.1 percentage points over the previous years 1.6 percent. This was attributed to the shut-in of Nido and Matinloc wells which are now in near-depletion state. Year-to-date production of natural gas reached 2.5 MTOE or 6.5 percent of the total energy supply (Figure 5). This level is lower by 0.17 MTOE from last years 2.7 MTOE caused by the 25-day scheduled maintenance of the Malampaya Gas-to-Power project. Coal supply increased from 5.23 MTOE in 2005 to 5.32 MTOE in 2006. While majority of our coal requirements were sourced through importation,
In 2006, 44.6 percent of the TPES was imported energy (Figure 5). This level was 0.83 percentage point lower than the previous years level. Net oil importation reached 13.2 MTOE, 5.3 percent lower from 2005 level. On the other hand, coal imports increased by 9.8 percent from the 3.71 MTOE level in 2005.
Figure 5. PRIMARY ENERGY MIX
Imported Coal 9.5% Ethanol 0.0%
Oil 1.6% Natural Gas 7.0% Coal 3.9% Geothermal 21.6% Hydropower 5.4% Solar, Wind, Mini-hydro 0.0% Biomass, etc. 14.8% CME 0.0%
Indigenous Energy 54.6% Imported Oil 35.9% Total Supply: 38.9 MTOE Imported Coal 10.5% Ethanol 0.0%
2005
Indigenous Energy 55.4% Imported Oil 34.1% Total Supply: 38.7 MTOE
Oil 1.4% Natural Gas 6.5% Coal 3.2% Geothermal 23.2% Hydropower 6.4% Solar, Wind, Mini-hydro 0.0% Biomass, etc. 14.6% CME 0.0%
2006
Less export, bunkering and (+/-) stock change
Oil Refining
Out of the 10.05 MTOE crude refinery input, about 96.8 percent of various petroleum products were produced. This indicates a 0.3 percentage point improvement from the previous years production notwithstanding the decline in the total refinery input by 0.6 percent. The improvement in the production ratio was due to an increased output in diesel (8.4 percent), jet fuel (5.2 percent) and LPG (1.2 percent). Moreover, the refinery capacity utilization remained at 72.9 percent,5 suggestive of refining efficiency.
Power Generation
The countrys total power generation in 2006 reached 56,784 GWh, slightly higher by 0.4 percent from last years level of 56,568 GWh. Generation from natural gas-fired power plants dominated the power generation mix with 28.8 percent share (Figure 6). However, compared to its year ago level, power generation from natural gas-fired power facilities decreased by 2.9 percent due to the 25-day scheduled maintenance of the Malampaya Gas-to-Power project resulting in the interruption of natural gas supply to Ilijan, Sta Rita and San Lorenzo power plants.
Figure 6. POWER GENERATION MIX
Natural Gas 29.8% Solar and Wind Oil-Based 0.0% 10.9% Hydro 14.8%
On the other hand, geothermal energy contributed 18.4 percent share to the generation mix while hydroelectric power plants accounted for a 17.5 percent share (Figure 6). Generation from oilbased power plants dropped by 24.0 percent from 6,141 GWh in 2005 to 4,665 GWh in 2006 due largely to restraint in oil consumption triggered by the continued increase of oil prices in the international market. Meanwhile, renewable energy sources such as solar and wind, contributed 0.1 percent share to the generation mix.
Fuel Input
The total amount of fuel used for power generation in 2006 reached 18.6 MTOE, which was 0.6 percent lower than the 2005 level of 18.7 MTOE. Coal remained as the major fuel for power generation with total usage of 3.71 MTOE, which was 10.1 percent lower than the previous years level of 4.13 MTOE. The use of natural gas for electricity generation likewise went down by 7.3 percent, compared with last years 2.5 MTOE. Power generation from oil (diesel and fuel oil) reached 1.04 MTOE, 26.9 percent lower than the 2005 level of 1.42 MTOE.
FINAL ENERGY CONSUMPTION

Total final energy consumption (TFEC) reached 22.5 MTOE in 2006, registering a decline of 3.0 percent from the 2005 level of 23.2 MTOE. Most sectors of the economy experienced a down trend in terms of energy utilization. The pattern of energy demand for the period can be attributed to the continuing increase in the costs of petroleum products which turned consumers in more prudent ways of utilizing energy. Out of the total energy demand in 2006, the transport sector remained the largest energy-consuming sector of the economy with 37.2 percent share, followed by the residential sector at 28.4 percent (Figure 7). Energy consumption of industry sector represented 24.0 percent share while commercial and agricultural sectors accounted for 9.1 percent and 1.3 percent, respectively (see Figure 7).
Coal 27.0% Total Generation: 56,568 GWh Natural Gas 28.8%
2005
Geothermal 17.5%
Solar and Wind Oil-Based 0.1% 8.2%
Hydro 17.5%
Coal 26.9% Total Generation: 56,784 GWh

5
Geothermal 18.4% 2006
Oil Supply/Demand Report FY 2006
TRANSFORMATION SECTORS
Power generation from coal-fired power plants reached 15,294 GWh, ranking second with 26.9 percent share to the power mix (Figure 6). The slight increase in the generation from coal-fired power plant may be attributed to the commercial operation of the 210-MW Mindanao coal power plant of Steag in the last quarter of 2006.
Figure 7. FINAL ENERGY DEMAND BY SECTOR

Commercial 8.5% Agriculture 1.4% Industry 22.9%
Figure 8. ENERGY CONSUMPTION OF THE TRANSPORT SECTOR BY SUB-SECTOR, 2006

Water Transport 8.5% Domestic Air Transport 2.9% International Civic Aviation 9.1% Railway 0.1%
Residential 28.8% 2005 Total Demand: 23.2 MTOE Commercial Agriculture 1.3% 9.1%
Transport 38.6% Total Consumption: 8.37 MTOE Industry 24.0% Road Transport 79.3%
Fuel usage for air transport posted a 12.0 percent share of the total transport sectors consumption, slightly higher by 0.4 percent than the 2005 level of 1.01 MTOE. Water transport, on the other hand, accounted for a 8.5 percent share of the sectors fuel consumption, which decreased from 0.84 MTOE in 2005 to 0.71 MTOE in 2006.
Residential 28.4% 2006 Total Demand: 22.5 MTOE
Transport 37.2%
Transport Sector
The transport sectors overall energy consumption posted a 6.4 percent decrease from 8.94 MTOE in 2005 to 8.37 MTOE in 2006. Petroleum products (diesel oil, gasoline and aviation fuel) constituted the bulk of energy consumed by the sector with electricity representing only about 0.1 percent of the total (see Figure 8). The continued increase in oil prices in the world market has significantly caused the decline in oil consumption. Meanwhile, the substantial increase in the consumption of autoLPG, coco-methyl ester (CME) and ethanol has been triggered by the governments drive to promote alternative fuels for transport. The consumption of CME increased to 0.54 thousand tonnes of oil equivalent (kTOE) while ethanol used during the period reached 1.41 kTOE. Due to the significant price differential with gasoline, the use of LPG for transport has significantly increased, reaching 4.03 kTOE. AutoLPG has gained popularity among taxi fleets and to some extent privately-owned cars. Almost 79.3 percent of the total fuel consumption of the sector was used for road transport (Figure 8). However, this is 6.3 percent lower than the year ago level of 7.09 MTOE to 6.64 MTOE in 2006. The sectors demand for electricity is attributable to the growing ridership of the Light Railway Transit 1 and 2 (LRT 1 and 2) and the Metro Rail Transit (MRT). Electricity used for the transport sector registered an increase of 5.9 percent from 7.84 KTOE in 2005 to 8.30 KTOE in 2006.
Residential Sector
The residential sector remained as the countrys second major consumer of energy in 2006. Its utilization level reached 6.4 MTOE or 28.4 percent of the countrys total final energy demand. Volume-wise, energy usage of the sector dropped by 4.3 percent from last years 6.7 MTOE. This can be attributed to the sectors lesser usage of petroleum products (LPG and kerosene) and traditional fuels (fuelwood, charcoal and other biomass) (Figure 9). Obviously, the demand pattern of household between 2005 and 2006 was affected by soaring retail prices of oil products. Other factors such as the lesser sales of household appliances in 2006 and the governments advocacy on energy efficiency and conservation may have also contributed to the level of the sectors energy use.
Figure 9. ENERGY CONSUMPTION OF THE RESIDENTIAL SECTOR BY FUEL TYPE, 2006
Electricity 21.4% Biomass 64.3% LPG 11.3% Kerosene 3.1% Total Consumption: 6.37 MTOE
Charcoal 8.5% Fuelwood 50.6% Agriwaste 5.1%
As shown in Figure 9, there is still continued reliance on traditional fuels in terms of fuel requirement for household activities. Biomass (fuelwood, charcoal, agriwaste) represented 64.3 percent of the sectors total demand due to its availability and abundance. Household consumption of biomass, however, decreased by 3.8 percent compared to last years level. Among the biomass fuels, fuelwood was the primary household fuel for cooking which gained the highest demand level at 3.2 MTOE, followed by agriwaste and other biomass at 0.33 MTOE and 0.54 MTOE, respectively. LPG and kerosene usage dropped by 7.3 percent and 21.4 percent, respectively. On the other hand, electricity consumption stood at 1.4 MTOE, down by 1.3 percent from last years level of 1.3 MTOE though its share to the total sectors demand slightly went up to 21.4 percent compared to its share of 20.7 percent in 2005.
The industry sector grew by only 1.9 percent because of the routinary performance of the mining industry. The manufacturing sector, however, remained stable, accelerating by 2.0 percent particularly on account of food and beverages, electrical machinery, iron and steel and non-ferrous metals.7 The reduction in the sectors energy consumption however, was indicative of the decline in its energy intensity. On the other hand, the mining sub-sectors energy consumption rose by 28.4 percent particularly on the use of diesel, fuel oil and LPG. Surprisingly, its production decreased by 6.8 percent due to lower yields of major mines and various small scale mines (e.g. gold, copper, and crude oil).8 In contrast, there was a notable decrease in the energy intensity of the construction sub-sector with 10.7 percent decrease in energy consumption vis--vis 4.7 percent growth in the gross value added (GVA).
Industrial Sector
Final energy consumption of the industrial sector reached 5.39 MTOE in 2006, comprising almost one-fourth of the total energy consumption during the year. Majority of which, or about 96.4 percent was consumed by manufacturing industries. The remaining 3.6 percent were used by construction and mining (Figure 10).
Figure 10. ENERGY CONSUMPTION OF THE INDUSTRIAL SECTOR BY FUEL TYPE, 2006
Electricity 24.9% Kerosene LPG 0.3% 1.4% Diesel 9.0%
Commercial Sector
Production performance of the commercial or service sector based on the GVA of 2005 and 2006 showed that private services, trade and finance contributed the highest growth to the overall performance of the sector.9 In 2006, final energy consumption of the sector increased by 4.7 percent from 1.96 MTOE in 2005 to 2.05 MTOE in 2006. Electricity (57.2 percent) showed the highest share of the sectors energy consumption with petroleum products (28.1 percent) having the second largest share and biomass (14.7 percent) as fuel substitutes (Figure 11). Electricity continued to provide the fuel requirements of the commercial sector primarily for lighting and space cooling. Electricity consumption of the sector grew by 3.9 percent from 1.13 MTOE in 2005 to 1.17 MTOE in 2006. As the price of crude oil in the world market remained volatile, the sectors consumption of LPG declined by 2.6 percent in 2006. Diesel consumption on the other hand, rose by 35.9 percent from 0.12 MTOE in 2005 to 0.17 in 2006. Similarly, fuel oil increase by 3.4 percent during the period. The
7
Fuel Oil 18.4%
Biomass 23.3% Total Consumption: 5.39 MTOE
Coal 21.8%
Natural Gas 1.0%
Petroleum product consumption fell by 7.3 percent due to the lower use in the manufacturing and construction sub-sectors. Meanwhile, electricity use went up by 1.4 percent. On the other hand, coal consumption rose by 11.2 percent mainly due to the
6
Based on 2005-2006 data on sales of major appliances of the Philippine Electrical Electronics and Allied Industries Federation published in National Statistical Coordination Boards (NSCB) Economic Indicators.
8 9
Statement of Socio-economic Planning Secretary Romulo L. Neri on the release of the FY 2006 National Income Accounts. Note: basic metals and metals industries are termed as iron and steel and non-ferrous metals, respectively in this report. Ibid Philippine National Accounts, NSCB
Total sales of major appliances6 in 2006 was recorded at 4,736,800, about 20.7 percent lower than the 2005 volume. Notably, the sales of cooking appliances dropped by 50.5 percent during the period.
increased demand of the cement and food industries. In terms of share, petroleum products remained the most consumed fuel of the sector at 29.0 percent followed by electricity at 24.9 percent and almost equally the rest is shared by coal (21.8 percent) and biomass (23.3 percent).
Figure 11. ENERGY CONSUMPTION OF THE COMMERCIAL SECTOR BY FUEL TYPE, 2006
LPG 10.4% Diesel 8.3% Fuel Oil 9.4% Electricity 57.2% Total Consumption: 2.05 MTOE
modernization of the machines used for crop raising and harvesting, the total consumption of petroleum products of the agriculture sector will be expected to grow in the next couple of years. Meanwhile, consumption of electricity for irrigation pumps and other agricultural activities posted a 2.2 percent decrease compared to the previous year.
Biomass 14.7%
B. OUTLOOK
PRIMARY ENERGY SUPPLY
Total primary energy supply is expected to grow at an annual average rate of 3.3 percent, translating to a yearly average volume of 48.93 MTOE across the entire planning period. Primary energy supply will comprise of 58.0 percent annual average share of indigenous energy and around 42.0 percent annual average share of imported energy. Indigenous energy, likewise, is projected to register an annual average volume of 28.38 MTOE while an average volume of 20.55 MTOE is expected to be sourced from other countries during the planning period.
increase may be attributed to the additional power back-up requirement of the commercial buildings and the mobility needs of trading services. Among the biomass resources, fuel wood utilization increased by 1.0 from last years level of 0.15 MTOE. This can be attributed to the increased activity in commercial establishments like food chains, restaurants and hotels, spurred by the dynamic developments in the tourism sector.
Agriculture Sector
The agriculture sector remained the least energy intensive among the countrys economic sectors, accounting for merely 1.3 percent share of the countrys total final energy demand in 2006. The sectors total energy consumption dropped considerably by 10.0 percent from last years 0.31 MTOE to 0.28 MTOE in 2006.
Figure 12. ENERGY CONSUMPTION OF THE AGRICULTURE SECTOR BY FUEL TYPE, 2006
Indigenous Energy Supply

Indigenous energy will be comprised of fossil fuels such as oil, gas and coal, and renewable energy like geothermal, hydro, wind, solar, and other biomass. From 2007 to 2014, indigenous energy will account an annual average share of 29.0 percent production of fossil fuels and 71.0 percent annual average share of renewable energy sources. Local production of oil and condensate is projected to increase by an average of 10.4 percent from 2007 to 2010 on account of the expected production from Malampaya field by 2010 and an additional production from Galoc by 2009. The combination of these fields will yield an estimated average annual production of 2.69 MTOE during the planning period. Natural gas, being the largest indigenous fossil fuel source, is estimated to account for around 10.6 percent share of the total indigenous energy
Figure 13. PRIMARY ENERGY SUPPLY MIX, 2007
Imported Coal 11.0% Indigenous Energy 57.2%
Kerosene 1.7%
Electricity 14.6%
Petroleum Products 85.4%
Diesel 77.1% Fuel Oil 6.0% Gasoline 0.6%
Total Consumption: 0.28 MTOE
Petroleum products and electricity were the fuels used by the sector with 85.4 percent and 14.6 percent share, respectively (Figure 12). Total petroleum products used by the sector decreased by 11.2 percent from 0.27 MTOE to 0.24 MTOE for the period in review. Among the petroleum products, diesel was the most consumed fuel for commercial fishing which is used to fuel fishing boats, crop production, and other agricultural activities accounting for 90.3 percent of the total petroleum product share. Due to the ever-growing need for technological advancements as well as the
Imported Oil 31.8%
Local Oil 5.7% Local Coal 4.3% Natural Gas 4.5% Hydropower 4.8% Geothermal 21.5% Biomass 16.0% Solar, Wind Mini-hydro 0.2% CME 0.1%
Total Supply: 43.5 MTOE
Local coal supply will register an average volume of 2.56 MTOE and is estimated to increase by 8.8 percent. The bulk of local coal supply with 90.0 percent share of the total indigenous coal will come from Semirara, Antique while a significant amount will be sourced from prospective fields in Cebu as well as other areas of Luzon and Mindanao.
Following the implementation of the Biofuels Act of 2006, appropriate programs in plantation, fertilization and/or expansion for coconut and sugarcane and other development requirement shall be implemented to increase the indigenous supply source potential for biofuels. To date, there are already nine accredited CME producers in the country while application for accreditation of one company is still under review. The aggregate capacity of these plants is estimated at 287,620,000 liters per year. Meanwhile, the San Carlos Bio-energy in Negros Occidental, which has a production capacity of 100,000 liters of ethanol per day, is expected to be operational in early 2009. The growth of bio-ethanol industry requires setting up of additional facilities and providing additional services related to bio-ethanol utilization. The combined increasing demand for ethanol and CME will require an annual average volume of 0.34 MTOE or an annual average increase in production of 40.0 percent over the planning period.
Imported Oil 29.6%
Geothermal production will increase at an annual average growth of 2.0 percent or 10.24 MTOE average volume. Geothermal will account for around 21.0 percent average share of the total energy supply. Hydropower will remain to make a significant contribution in the total primary energy supply for the planning period. Production will grow by an average of 1.3 percent with an estimated average volume of 2,25 MTOE.
Imported Energy Supply

To meet the escalating energy requirements of a growing economy, the country will continue to rely partly on imported fuel, particularly fossil fuels such as oil and coal. Imported oil and oil products will account for the bulk share of 75.0 percent of total imports with an annual average growth of 3.8 percent over the planning period. Meanwhile, with coal currently being the leastcost option for power generation, coal importation is projected to increase at an average annual rate of 1.8 percent which will translate to a yearly average volume of 5.22 MTOE.
Imported Oil 32.9%
As part of other renewable energy, the aggregate supply of energy from wind, solar, mini-hydro, biofuels and other biomass will account for an annual average volume of 7.34 MTOE. Biomass will constitute an average share of 14.8 percent of the total energy supply and is foreseen to grow annually by 1.2 percent.
FINAL ENERGY DEMAND

The countrys total final energy demand is projected to increase annually by 3.3 percent from 2007 to 2014. The countrys energy consumption is expected to reach 30.69 MTOE by 2014 from 24.53 MTOE in 2007, averaging an annual requirement of 27.44 MTOE.
production with the foreseen addition of small gas fields from the North Luzon Agribusiness Quadrangle as well as the Visayas area. This will provide an annual average volume of 2.96 MTOE, posting growth in supply at an average rate of 12.0 percent annually.
Wind, solar and mini-hydro will collectively contribute an average volume of 0.09 MTOE to the total energy supply. During the planning period, production of these resources will post an average growth rate of 0.5 percent.
Oil will continue to dominate the countrys energy requirement despite its unabated price increase in the world market. Over the reference period, oil consumption is projected to increase annually by 3.1 percent, with its annual average share of 49.3 percent in the total energy demand. Likewise, the growing population and burgeoning local industries is expected to trigger increased electricity consumption which is projected to grow by 5.2 percent annually. Meanwhile, propelled by the industrial sector such as cement manufacturing, slightly higher coal consumption is expected, recording an average increase of 1.2 percent annually.
the reference period. Biomass such as fuelwood, charcoal and agriwaste will remain the primary household energy sources. During the reference period, however, the use of biomass in the residential sector is foreseen to decline by 0.6 percent yearly owing to the continuing fuel shift to LPG particularly for domestic cooking. By this, consumption of LPG and kerosene is expected to rise at an average rate of 2.9 percent annually over the next ten years.
Figure 17. FINAL ENERGY DEMAND IN RESIDENTIAL SECTOR (MTOE)
9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0 2007 2008 2009 2010 2011 2012 2013 2014 Oil
Energy Demand by Sector

MTOE
Transport Sector
Energy consumption for transport, the largest energy consuming sector, is projected to grow at an annual average rate of 3.2 percent over the planning period. The sector is expected to use up 34.3 percent of the countrys total energy demand.
Figure 16. FINAL ENERGY DEMAND IN TRANSPORT SECTOR (MTOE)
10.0 8.0 MTOE 6.0 4.0 2.0 0 2007 2008 2009 2010 2011 2012 2013 2014 Electricity
Biomass
Electricity
With the growing trend towards urbanization and technological revolution, the influx of electrical appliances in households is expected to impact on the sectors electricity consumption pattern increasing at an annual average rate of 5.7 percent over the planning period.
Industrial Sector
The industrial sector is the countrys third largest energy consumer accounting for 25.4 percent share of the countrys total energy demand during the reference period. With a yearly average consumption of 6.98 MTOE, the sectors energy requirement is projected to increase annually by 4.1 percent. Oil will continue to be the primary fuel of the sector, comprising more than 32.2 percent of its total energy demand. Meanwhile, in terms of growth, demand for CME and natural gas
Figure 18. FINAL ENERGY DEMAND IN INDUSTRY SECTOR (MTOE)
9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0 Oil 2007 Biomass 2008 2009 2010 Coal 2011 2012 2013 2014 CME/Ethanol
Oil
Natural Gas
CME/Ethanol
Oil remains to be the dominant fuel of the sector, accounting for 96.4 percent share in the total consumption, primarily for land transport use. With the passage of the Biofuels Act of 2006, mandating specific biofuels blend, demand for CME and ethanol is projected to grow with a combined annual average growth rate of 42.1 percent during the reference period. This projection is based on the average annual growth rate of diesel and gasoline demand from 2007 to 2014.
Residential Sector
Households, the second largest energy-consuming sector, is foreseen to use up 27.8 percent of the countrys total energy requirement over the planning period. The total energy demand of the sector is projected to grow by 1.6 percent yearly with an average consumption of 7.63 MTOE spread over
11
Electricity
SWMh Natural Gas
Commercial Sector
Energy consumption in the commercial sector is forecasted to increase by 5.7 percent and account for 10.9 percent of the countrys total energy consumption during the planning period. Electricity will be the sectors primary fuel with a 60.0 percent share in the sectors total energy requirement followed by oil which will account for 27.7 percent.
Figure 19. FINAL ENERGY DEMAND IN COMMERCIAL SECTOR (MTOE)
4.0 3.5 3.0 MTOE 2.5 2.0 1.5 1.0 0.0 0 2007 2008 2009 Oil 2010 2011 2012 2013 2014 CME/Ethanol SWMh
Electricity
Biomass
Agriculture Sector
Agriculture, being the least energy-intensive sector in the economy, is projected to use up 1.6 percent of the countrys total energy consumption during the reference period. Energy requirement for agriculture will grow at an annual average of 2.4 percent, equivalent to 0.45 MTOE yearly consumption. Oil will be the main fuel for agricultural activities during the planning period.
Figure 20. FINAL ENERGY DEMAND IN AGRICULTURE SECTOR (MTOE)
0.50 0.45 0.40 0.35 0.30 0.25 0.20 0.15 0.10 0.05 0.00
MTOE
2007 Oil
2008
2009
2010
2011
2012 2013 2014 Electricity
SWMh
will register the highest at average rates of 14.4 and 13.3 percent annually, respectively.
Energy Independence
III. Energy Independence

A. REVITALIZING THE EXPLORATION AND DEVELOPMENT OF INDIGENOUS RESOURCES
OIL AND GAS
The petroleum sector continues to work in attracting additional investments to develop more productive oil and gas fields. Thus, the 2007 Plan Update focuses on the sectors goals of increasing the countrys oil and gas resources by 20.0 percent at the end of the planning period and increasing local production from other indigenous energy sources. Increasing production from indigenous hydrocarbon resources is a major pillar of the nations energy independence agenda. Malaysias Petronas Carigali Overseas Bhd. to drill one exploration well in offshore Mindoro; Galoc Production Company to drill two horizontal production wells within the Galoc sub-block or SC14C in Northwest Palawan between August and October; and, Japan Petroleum Exploration Philippines, Ltd. (JAPEX) is committed to drill one exploration well over offshore Taon Strait under SC 46.
Performance Assessment
With the launching of the PECR, there is a resurgent interest on the countrys upstream petroleum sector among local and foreign investors. As shown in Table 1, the country now has 28 service contracts (SC). Four of these were approved under PECR 2005 and three negotiated SCs were firmed up in 2006. Work programs under contracts awarded in 2005 and 2006 have committed investments of about US$ 155.1 million and US$ 46.2 million, respectively. Thus, the countrys active service contracts will enhance the possibility of new commercial resource discoveries. A 10.0 percent likely success ratio of these contracts would also yield substantial reduction in crude oil importation and bring the country closer to meeting its goal of higher energy independence. Based on work program commitments for 2007, five wells will be drilled in Northwest Palawan, Visayas, Ragay Gulf, Mindoro-Cuyo and the East Visayan Basin by four service contractors, to wit:
In view of the positive results of the PECR, the DOE conducted another bidding round in December 2006. Offered in PECR 2006 were nine areas covering 72,639 square kilometers (sq. kms.) for exploration and development. These sites are located in Central Luzon, Cagayan, Mindoro-Cuyo, East Palawan and Agusan-Davao. The DOE expects to award the PECR 2006 service contracts before the end of 2007.
Exploration and Production

The year 2006 saw significant increases in production of oil, gas and condensates. Production of crude oil reached 0.18 million barrels (MMB) for the year or a 7.1 percent increase from its 2006 target of 0.17 MMB. On the other hand, production of natural gas reached 108,606 million cubic feet of gas (MMCFG) equivalent to a 23.0 percent gain from its 2006 target of 88,323 MMCFG. Simultaneous with the production of natural gas, the Malampaya gas field also produced condensate with actual output reaching 5.1 MMB for the year. Acquisition of geophysical, principally seismic data was conducted throughout the year to determine and delineate underlying structures that could hold significant amount of hydrocarbon resources. For 2006, a total of 640 sq. kms. of 3-D seismic data and 11,296 line kilometer of 2-D seismic data were acquired.
13
Singapore-based Premiere Oil to drill one exploration well in Ragay Gulf under SC No. 43, in December 2007;
Table 1. ACTIVE SERVICE CONTRACTS, as of June 2007

Operator North Luzon Agribusiness Quadrangle PNOC-EC Aragorn Power and Energy Corp EF Durkee and Associates Metro Luzon Urban Beltway Pearl Oil (Ragay) Ltd. PNOC-EC Central Philippines Forum Energy Philodrill/OPMC Philodrill Corp. Shell Philippines Exploration B.V. Forum Exploration, Inc. Gas2Grid Pte. Ltd. JAPEX Phils. Ltd. Ranhill Bhd. NorAsian Energy Ltd. NorAsian Energy Ltd. Laxmi Organic Industries Nido Petroleum Phil NorAsian Energy Ltd. PNOC-EC Nido Petroleum Phils. Shell Philippines Exploration B.V. Burgundy Global Exploration Corp. Burgundy Global Exploration Corp. PNOC-EC Mindanao Agribusiness Tap Oil (Phils.) Pty. Ltd. South Sea Petroleum Mitra Energy Ltd. PNOC-EC Ranhill Bhd. Contract Number SC 37 SC 48 SC 52 SC 43 SC 47 GSEC 101 SC 6A/B SC 14 SC 38 SC 40 SC 44 SC 46 SC 49 SC 50 SC 51 SC 53 SC 54 SC 55 SC 57 SC 58 SC 60 SC 61 SC 62 SC 63 SC 41 SC 45 SC 56 SC 59 SC 64 Location Cagayan Valley Cagayan Valley Cagayan Valley Ragay Gulf Offshore Mindoro Reed Bank Northwest Palawan Northwest Palawan Northwest Palawan Northern Cebu Central Cebu Offshore Tanon Strait South Cebu NW Palawan East Visayan Basin Onshore Mindoro NW Palawan West Palawan Calamian Block, NW Palawan West Calamian Northeast Palawan Northeast Palawan Southeast Palawan Southwest Palawan Sulu Sea Agusan-Davao Sulu Sea West Balabac Sulu Sea Area (has.) 36,000 748,000 96,000 806,550 1,466,700 1,036,000 164,838 70,888 158,526 458,000 100,000 328,000 265,000 172,000 444,000 660,000 537,616 900,000 720,000 1,344,000 1,008,000 1,356,000 1,302,000 1,056,000 832,386 748,000 862,000 1,476,000 1,264,900 Effective Date 18 Jul 1990 22 Feb 2005 08 Jul 2005 14 Jan 2004 10 Jan 2005 13 Jun 2002 01 Sep 1973 17 Dec 1975 23 Feb 1989 19 Feb 1994 28 Jan 2004 21 Dec 2004 01 Mar 2005 11 Mar 2005 08 Jul 2005 08 Jul 2005 05 Aug 2005 05 Aug 2005 15 Sep 2005 12 Jan 2006 10 Feb 2006 07 Jul 2006 07 Jul 2006 24 Nov 2006 10 May 1996 15 Dec 2004 05 Aug 2005 13 Jan 2006 28 Nov 2006
The DOE, in collaboration with various petroleum exploration companies, has started the study and evaluation of previously marginal fields such as the Galoc and Octon fields in offshore Palawan. The exploration firm, Galoc Production Company will commence the development of Galoc oilfield in the Northwest Palawan basin in 2007. The work plan includes the committed drilling of two horizontal wells and one optional well. Likewise, oilfields in current state of suspended operations (West Linapacan and Cadlao) are being considered for rehabilitation.
Measurable Sectoral Targets

The exploration program of active SCs is expected to increase the countrys proven oil and gas resources to 20.0 percent within the planning period 2007 to 2014. Likewise, a total of 40 wells are programmed for drilling, majority of which are offshore wells. Recent developments led to some adjustments in the exploration and production targets set in the Reference Plan. Specific amendments to the 2007 Plan Update include the following:
a) Oil production from the Malampaya oil leg shall commence by 2010 to run up to 2013. b) Cadlao field shall be reactivated and production is seen to start by 2012 at 1,700 barrels of oil per day (BOPD) for ten years. c) Galoc field shall be developed to commence production by 2009. d) Daily gas production of 1 million standard cubic feet (MMSCF) from the San Antonio gas field will be enhanced with the scheduled replacement of the current gas turbine into a more efficient one. e) Libertad gas field will be developed and production is expected by 2009. In view of the above, production targets (Annex A.1.5) show that the countrys existing oil and gas fields will yield about 37.4 MMB of oil and 1,138 BCF of gas for the planning period. Oil production from the Malampaya oil leg is expected to commence by 2010 with an initial production of 8.76 MMB. On the other hand, its daily gas production of 400 MMSCF will run for 20 years.
Energy Independence 14
Energy Independence
The highest level of oil production is seen by 2010 with the entry of production from the Malampaya field. On the other hand, annual gas production is estimated at about 146.0 billion cubic feet (BCF) for the period 2008-2014. Acquisition of new geophysical data over the planning period is expected to cover 22,400 linekilometers of 2D seismic data and 3,600 sq.kms. of 3D seismic data.
the development of hydrocarbon discoveries and the conduct of independent field development and reservoir studies will be pursued as long-term activities to determine economic viability of newly discovered oil and gas fields.
Development Challenges
Enhance fiscal incentives through the review of existing laws on oil and gas exploration and development. Likewise, special incentives shall be formulated for investors willing to further assess/ develop marginal or less prospective basins. Improve information database through the enhancement of the DOE webpage on petroleum to ensure information accessibility by foreign exploration companies.
Promotion/marketing of marginal fields or those fields with resources considered less profitable for development such as those found in the Maniguin in Panay Island, Calauit and West Linapacan in Palawan and South Cebu and Libertad fields in the Visayas. Isolated but lingering opposition by some NGOs to oil exploration has complicated and delayed seismic surveys. Worldwide boom in hydrocarbon exploration has made it difficult for some service contractors to acquire drilling rig and seismic boat services in time.
Table 2. OIL AND GAS MEASURABLE TARGETS

Field Exploration Well Drilling Production Oil (MMB) - Nido - Matinloc - Malampaya - Cadlao - Galoc Gas (BCF) - Malampaya - San Antonio - Libertad Condensate (MMB) - Malampaya Total Imported Fuel Oil Displacement in MMBFOE in MTOE 2007 5 0.19 0.12 0.07 113.88 113.51 0.37 5.15 2010 5 10.27 8.76 1.51 146.30 146.00 0.18 0.12 4.93 2014 5 0.56 0.56 146.12 146.00 0.12 4.22
Action Plan
For the 2007 Plan Update, the upstream petroleum sector goal has been modified to focus on achieving a 20.0 percent increase in oil and gas resources instead of reserves as stipulated in the 2006 Plan Update. The modified target is more quantifiable since it is verified through the acquisition, processing and interpretation of new/additional seismic data. To meet the twin goals of increasing resources and boosting indigenous oil and gas production, the DOE has identified the following courses of action:
25.51 3.68
40.61 5.86
30.79 4.45
Note: Please refer to Annex A.1.5
Increase oil and gas production
Increase oil and gas resources by 20.0 percent
15
Improve prospectivity to increase acreage for offer under the PECR to draw more investment interest in the countrys petroleum resources. This will be done through the evaluation of prospective areas to be offered in the bid rounds, promotion of the bid rounds in international promotion activities. The DOE shall also assist petroleum contractors by closely monitoring and supervising agreed geological and geophysical work commitments stipulated in the SCs. This would include the conduct of seismic activities to cover 30,000 line-kilometers, basin evaluation/assessment for the identification of leads and prospects using the Departments geological, geophysical and engineering data. Furthermore,
To meet the production target of 10.36 MMB of oil and 2.24 BCF of gas from undeveloped marginal fields, there is a need to further evaluate and assess previously discovered marginal fields or existing oil fields, which have been considered as noneconomic. Along this context, the medium and long-term activities would include encouraging service contractors/investors to undertake the application of innovative technologies in the development of these fields. In due course, the DOE will work on amending Presidential Decree (P.D.) 87 or the Oil Exploration and Development Act of 1972 to provide additional incentives to prospective investors. Production from the Nido, Matinloc and Malampaya fields shall be pursued as an immediate measure to help improve the countrys indigenous energy production. In the medium-term, the DOE shall
A case study on the cost-effective development scheme for marginal fields shall also be conducted to improve the economic viability of such fields. The DOE is also looking at the possible development/ rehabilitation of Galoc and Cadlao oilfields as part of its long-term activities. Assistance will be provided by the Department on the implementation of the Enhanced Oil Recovery (EOR) and Improved Oil Recovery (IOR) projects for existing/producing fields and newly discovered fields.
COAL
The government will continue to develop the countrys indigenous coal resources to fuel the countrys energy requirements. Environmental concerns will be addressed through regular and proper monitoring of coal mines and the promotion of emerging clean coal technologies.
Under the PECR 2006, 14 coal prospective areas were offered to investors for exploration and development. Areas for offer are found in the following sites: (a) Bayawan City, Negros Oriental; (b) Bunawan, Agusan del Sur; (c) Calatrava, Negros Occidental; (d) Danao City, Cebu; (e) Gen. Nakar, Quezon; (f) Cagwait-Marihatag, Surigao del Sur; (g) Gigaguit, Surigao del Norte; (h) Kitcharao, Surigao del Norte; (i) Naga, Cebu; (j) Siay, Zamboanga Sibugay; (k) San Agustin-Lianga, Surigao del Sur; (l) Tandag-Tago, Surigao del Sur; (m) Tarragona, Davao Oriental; and (n) Trento, Agusan del Sur. The DOE started the drafting and subsequently initiated consultations on the amended Small-Scale Coal Mining (SSCM) Circular, the Coal Mine Safety Rules and Regulations, as well as the circular on Coalbed Methane (CBM). The revision on these circulars governing coal mine operations in the country is timely in view of the increased interest in the use of coal in the power generation sector and the cement manufacturing industry. Operations of small-scale coal mining are also being encouraged as these provide employment and livelihood opportunities for host communities. Representations made with the Environmental Management Bureau (EMB) of the Department of Environment and Natural Resources (DENR) led to modified requirements for the grant of Environmental Compliance Certificate (ECC) to coal mining operations. As a result, the Procedural Manual for the implementation of DENR Department A.O. No. 30, Series of 2003 was effectively amended through the issuance of Memorandum Circular No. 005. The circular provides that small-scale coal mining operations (or those with annual production of 20,000 MT and below) need only to provide an Initial Environmental Examination (IEE) checklist to secure their ECC. Coal mining operations with annual coal production of more than 20,000 MT but not exceeding 70,000 MT will just be required to provide an IEE Report. A full blown EIA is required only for coal mine operations with annual committed production of more than 70,000 MT. To effectively monitor the countrys coal flow and update the coal market database, research works were conducted with various coal end-users. Results of the database update facilitated energy planning and policy formulation for the upstream coal sector.
The Philippines has about 19 coal districts that contain significant coal deposits. Such deposits are found in the areas of Batan Island, Bukidnon, CagayanIsabela, Catanduanes, Cebu, Davao, Maguindanao. Masbate, Mindoro Negros, Quezon-Polilio, SamarLeyte, Sarangani, Semirara, Sorsogon, Surigao del Sur, Sultan Kudarat, Quirino, and Zamboanga Sibugay. Total coal resources in these areas are estimated at about 2.3 billion metric tons. In 2006, the countrys in-situ reserves stood at 323.3 million metric tons (MMMT), registering a 3.0 percent increase from its 2006 target of 313.2 MMMT. This is mainly due to the exploration activities conducted by the new coal exploration contractors of the DOE. As of December 2006, the country has 38 active coal operating contracts (COCs) with development, production and exploration commitments. A new COC to develop and explore the coal resources in Negros Occidental was issued in 2006. This is in addition to 15 COCs awarded to 11 local companies in 2005 for the exploration and development of coal areas in Southern Luzon, Cebu and Mindanao. The countrys coal operating contractors produced 2.3 MMMT or about 1.0 MMMT less than the targeted 3.3 MMMT. Contribution came largely from largescale coal mines as it accounted for 97.0 percent of the total production. Production from small-scale coal mines, on the other hand, increased by 12.2 thousand metric tons (MMT) as it reached 70.6 MMT in 2006.
evaluate the possibility of rehabilitating oil and gas fields with suspended operations such as West Linapacan and Cadlao fields.
Meanwhile, the reduced operation of the Semirara Mining Corporation due to maintenance and repair of its power plant, as well as mine accidents in the coal mining areas of Cebu and Albay, and the damages wrought by typhoons Milenyo and Reming during the last quarter of 2006, contributed to the drop in production.
Energy Independence

The countrys in-situ reserves will reach 420.8 MMMT by 2014, the bulk of which will be sourced from Mindanao, particularly in Region XII. Production is estimated to maintain its 3.0-MMMT level for the period 2007-2008. This is expected to gradually reach the 5.0-MMMT mark by 2011 due to increased contribution from coal-producing areas in Central Philippines and the Mindanao Super Regions. Region VI remains the biggest source of the countrys indigenous coal. By 2014, production is expected to hit a record high of 6.6 MMMT to contribute to the sectors goal of increasing its self-sufficiency target level. Projected coal production will fuel the coal-fired power plants located in Antique, Sultan Kudarat, Surigao, Cagayan and Isabela, which are scheduled to be commissioned within the planning period.
Table 3. COAL MEASURABLE TARGETS
In-Situ Reserves (MMMT) North Luzon Agribusiness Quadrangle Metro Luzon Urban Beltway Central Philippines Mindanao Super Region Production (@10,000 BTU/lb MMMT) North Luzon Agribusiness Quadrangle Central Philippines Mindanao Super Region Imported Fuel Oil Displacement In MMBFOE In MTOE
Implementation of Plans and Programs
2007 318.81 38.42 0.79 84.14 195.46 3.67 0.02 3.36 0.28 12.96 1.87
2010 318.82 41.14 0.79 79.40 197.49 4.78 0.31 3.79 0.68 16.85 2.44
2014 420.82 40.27 0.79 71.85 307.91 6.60 0.67 4.92 1.01 23.30 3.36
A major undertaking is the project on Potential Coalbed Methane and Related Coal Resources in the Philippines to be conducted jointly by the DOE and the U.S. Geological Survey of the Department of Interior under the Memorandum of Understanding (MOU) signed between the United States and the Philippines on 07 March 2007. Coalbed methane is natural gas found in coal beds and used for a variety of purposes ranging from domestic, commercial and industrial to electric power generation. Methane is generally considered a cleaner form of energy and cost-effective as well, considering that exploration and extraction costs are low. Initially, the project will collect, analyze, compile, synthesize, interpret, and publish critical new data on coalbed methane and coal resources in the coalfields and on recoverable coal mine methane (CMM) and abandoned mine methane (AMM) reserves in the coal mine areas of the Philippines. The project is ultimately intended to assist coal operating contractors in identifying their estimated coalbed methane resources. In addition, it will provide technical assistance and technology transfer on the use of coalbed methane for the contractors own power requirements.
Another project to be implemented is the Mine Safety, Rescue and Emergency Preparedness in Coal Mining Project which promotes safety in mining operations. Among its main objectives is to minimize the occurrence of mine accident particularly methane gas explosion. It will also implement a program aimed at promoting safety among coal operators and coal mine workers in the country. A continuing activity of the DOE for the planning period is the Coal to Market Linkage Program which aims to update database on coal specifications of end-users and supplier technologies on coal utilization and handling. This would serve as basis for future development studies, policies and plans on coal. To sustain the projected demand for coal during the planning period, coal blocks will continue to be offered in the PECR. Activities attendant to the conduct of contracting rounds include the prioritization of coal areas to be offered, evaluation of submitted proposals vis--vis the PECR criteria, and the subsequent awarding of development/ exploration contracts to qualified bidders. Likewise, the DOE will identify and promote small-scale coal mining areas for possible development.
Need for a policy issuance mandating the use of Clean Coal Technologies (CCT) among existing and new coal end-users to improve local coal consumption and at the same time ensure the conformity of coal utilization to environmental standards. Need to study the impact to cost of power generation and retail electricity prices of using indigenous coal with CCT. Improvement of guidelines/strategies on the conduct of Information, Education and Communication (IEC) campaign activities on the use of local coal as an acceptable fuel for power generation.
Action Plan
The DOE will pursue activities to increase indigenous coal production to meet the growing demand for coal by the power generation sector and manufacturing industries.
Institutional Strengthening
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To lay the framework for improved indigenous coal production, a review of the consolidated draft of the
Table 5. INDICATIVE GEOTHERMAL CAPACITY ADDITIONS (MW)

Region Plant Location Potential Capacity 60.0 60.0 20.0 20.0 40.0 20.0 40.0 40.0 40.0 40.0 49.4 20.0 20.0 40.0 20.0 40.0 40.0 20.0 20.0 50.0 699.4 Year Available 2013 2014 2014 2014 2012 2012 2012 2011 2013 2013 2007 2014 2010 2011 2012 2012 2014 2013 2012 2010
A new Circular providing the guidelines for coal bed methane exploration, development and production will be drafted and issued not only to improve our self-sufficiency in energy but promote safe coal mining as well. Drafting and implementation of policies on the use of indigenous coal and clean coal technology are expected within the planning period to address marketability and environmental issues of indigenous coal. Other strategies to promote the use of indigenous coal include the conduct of information campaign on CCTs for power generation, conduct of training/seminars on safe and efficient coal mining practices, as well as the pursuit of environmental programs and innovative technologies for the reduction of coal emissions and effluents.
North Luzon Agribusiness Quadrangle CAR Batong Buhay Batong Buhay, Kalinga Buguias Tinoc Buguias Tinoc, Ifugao Daklan Daklan, Benguet II Baua Baua, Cagayan Metro Luzon Urban Beltway III Natib Natib, Bataan IV-A Mabini Mabini, Batangas IV-B Montelago Montelago, Oriental Mindoro Central Philippines V Tanawon Albay and Sorsogon Rangas Albay and Sorsogon Manito Kayabon Manito, Albay VI Northern Negros* Bago City, Negros Occidental Mandalagan Mandalagan, Negros Occidental VII Nasulo** Palinpinon, Negros Oriental Dauin Dauin, Negros Oriental VIII Biliran Biliran, Biliran Mindanao Agribusiness IX Lakewood Lakewood, Zamboanga del Sur XI SE Apo SE Apo (Kapatagan), Davao del Sur Amacan Amacan, North Davao XII NW Apo NW Apo (Tiko), North Cotabato Mindanao III Mt. Apo, North Cotabato Total * commissioned in February 2007 ** committed projects
RENEWABLE ENERGY
As of end 2006, the countrys total installed capacity from renewable energy stood at around 5,261.2 MW. Hydropower accounted for the largest share of 61.9 percent followed by geothermal with 37.6 percent and the remaining 0.5 percent was provided by solar and wind. Indicative projects in biomass, solar and ocean are expected
Table 4. RENEWABLE ENERGY INSTALLED CAPACITY (MW)
Renewable Energy Hydropower Geothermal Wind Solar Total Installed Capacity 3,257.00 1,978.00 25.18 1.00 5,261.18
to contribute their shares during middle to end of the planning period. Meanwhile, assessed potential wind sites promise a huge contribution to the achievement of the envisioned double capacity from renewable energy.
Geothermal
Development of geothermal energy potential is continuously being pursued to increase its share in the over-all energy mix and support the countrys bid in becoming the largest producer of geothermal energy in the world. In the 2006 primary energy portfolio, the share of geothermal energy stood at 22.8 percent compared to 21.5 percent in 2005. Meanwhile, gross electricity generated from geothermal resource stood at 10,465 GWh in 2006 exhibiting an increase of 5.7 percent from the previous years level and posting an 18.4 percent share in the overall power generation output.
As a result of the increase in the electricity generation, fuel oil displaced increased from 17.07 MMBFOE in 2005 to 18.03 MMBFOE in 2006. Due primarily to the continuous oil price increase, foreign exchange savings also increased from US$ 873.46 million in 2005 to US$1,140.72 million in 2006. The completion of rehabilitation works for MakBan and Tiwi geothermal power plants in the last quarter of 2005 resulted in the increased power plant capacities of 32.8 MW and 14 MW, respectively. Moreover, PNOC-EDCs10 first merchant power plant the 49.4 MW Northern Negros Geothermal Power Plant (NNGPP) started its commercial operation in February 2007 providing additional power
10
The governments arm in geothermal energy production, which is now privatized with 40.0 percent of shares offered to the public and the remaining 60.0 percent bought by Red Vulcan Holdings Corp., a consortium led by First Gen Corporation, Spalmare Holdings BV and Terracota Holdings Corp.
amended SSCM Circular and the Coal Mine Safety Rules and Regulations shall be undertaken in 2007. Upon approval of these statutes, implementation is expected within the length of the planning period.
Energy Independence
capacity for the Visayas grid. Also in 2006, three production wells were drilled and completed by PNOC-EDC: PT-11D in Northern Negros, and 421D and 424D both in Leyte to boost the steam production in the said geothermal fields. Under PECR 2006, three areas were offered namely: the 20-MW Mabini in Batangas, 20 to 40-MW Biliran in Biliran Province and 20 to 40-MW Amacan in Compostela Valley. Once harnessed, these fields could add about 60 to 100 MW additional capacity.
Conduct further assessment of geothermal prospective fields to identify sites that can be offered in the PECR. Monitor closely the exploration and development of awarded geothermal areas. Conduct reservoir and production studies for optimized utilization of geothermal resources in existing power plants. Optimization projects shall likewise be encouraged from the service contractors. Pursue optimization of low-temperature geothermal energy by promoting the cascading scheme of development through the project: Resource Assessment of Low-Enthalpy Geothermal Resources in the Philippines. This will be implemented over a five-year period to commence in 2007. The project aims to promote and accelerate the development of small and low enthalpy geothermal resources in the Philippines through the conduct of detailed geo-scientific investigations, socio-economic and environmental baseline studies on identified small and low enthalpy geothermal resource areas. Pursue the implementation of the Memorandum of Agreement (MOA) between DOE, PNOC and the local government of Puerto Princesa, Palawan. The MOA provides for the assessment of Palawans geothermal energy resources for power and nonpower utilization.

Potential capacity addition of 699.4 MW from geothermal resource could be harnessed within the planning period. Bulk of such additional capacity shall come from the Central Philippines with a total capacity of 269.4 MW, while the Mindanao Super Region has a total of 170-MW potential capacities that could be tapped. From these capacity additions, the 20-MW Nasulo Geothermal Power Project in Palinpinon, Negros Oriental and the 50-MW Mindanao III Geothermal Project are already committed and expected to be available both in 2010. To further accelerate the utilization of geothermal and increase its share in the energy mix, around 236 wells are envisioned to be drilled within the planning period by the private sector (Table 6) in pursuit of developing new geothermal areas and expanding the existing steam fields. On the other hand, the private sector will be encouraged to undertake the drilling of the remaining wells located outside the PNOC-EDC contracted areas.
Table 6. GEOTHERMAL MEASURABLE TARGETS
No. of wells to be drilled Luzon Visayas Mindanao
Enhance policy framework in the development of geothermal energy through the following policy initiatives:
2007 8 0 4 4
2010 35 21 7 7
2014 19 7 7 5
Formulation of a Department Circular (D.C.) for the direct use of geothermal energy for non-power applications Seek Department of Justice (DOJ) Opinion on possible review of P.D. 1442, An Act to Promote the Exploration and Development of Geothermal Resources, allowing 100 percent foreign equity participation in geothermal projects.
Development Challenge
Foreign investors are restricted to a maximum of 40.0 percent ownership of any geothermal venture. This legal provision is a major stumbling block to the entry of foreign investors, holding back more extensive development of the countrys geothermal resources.
Hydropower
In 2006, the countrys total installed capacity from hydropower stood at 3,257 MW. The 345-MW San Roque hydropower plant in Pangasinan and 350MW Kalayaan 3 and 4 in Laguna remain the biggest contributors. Fuel oil displacement of the sector reached 17.14 MMBFOE in 2006.
Action Plan
As part of governments bid to becoming the world leader in geothermal energy, the following strategies shall be carried out to advance its exploration, development and utilization:
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Table 7. INDICATIVE HYDROPOWER PROJECTS (MW)

Region Name of Plant Capacity 1.5 0.3 0.3 0.6 0.7 1.0 78.0 44.0 Target Year 2010 2010 2010 2010 2010 2010 2011 2013 Location Lagawe, Ifugao Tabuk, Kalinga Atok, Benguet Benguet Pagudpod, Ilocos, Norte Solano, Nueva Viscaya Pantabangan, Nueva Ecija Nueva Ecija
There were 14 hydropower projects with feasibility studies, which are estimated to provide an additional 255.2 MW to the countrys existing hydropower capacity. These are being undertaken by following developers: Solution Using Renewable Energy (SURE), Province of Biliran, PNOCEDC/SOLUZIONA, Chase Makros Management, Inc. (CMMI), Benguet Power Resources Development Corp., First Gen Visayas Hydro Power Corporation, and the Sta. Clara Power Corporation. Two of these projects will proceed to the construction phase, namely: (a) Colasi in Mercedez, Camarines Norte; and, (b) Sipangpang in Cantilan, Surigao del Sur projects with potential capacity of 1 MW each. Both projects are expected to be completed in 2009. Meanwhile, the DOE continuously supervises the ongoing constructions of committed mini-hydropower projects. These stand-alone projects will provide a total of 4.6 MW in different areas of the country by 2008. Table 8 shows the details of projects ongoing constructions.

The 2007 Plan Update identifies 41 hydropower projects consisting of 10 large hydropower (924.8 MW) and 31 mini-hydropower (100.3 MW) projects or an aggregate capacity of 1,025.1 MW (Table 7). The Metro Luzon Urban Beltway and Mindanao regions host the greater bulk of the potential projects with total capacity of 368 MW and 369.8 MW, respectively. The Provincial Government of Ifugao is expected to implement
North Luzon Agribusiness Quadrangle Ibulao MHP CAR Bulanao RIS Atok 4 MHP Buguias 1 MHP Pansian River MHP I Uddiawan MHP II Pantabangan Expansion III Balintingon River Multi-Purpose Project Metro Luzon Urban Beltway Kalayaan Pumped Storage Power IV-A Plant III (CBK expansion) Catuiran MHP IV-B Central Philippines Langogan MHP IV-B Batang Batang MHP Cabinbin MHP Vera Falls V Palali Falls Cumaginking Lower Dugui MHP Hitoma 1 MHP Hitoma 2 MHP Solong Falls MHP Kapipian MHP Villasiga HEP VI Timbaban HEP Aklan Hydropower Project Sicopong HEP VII Siaton MHP Pacuan HEP Igbolo MHP Bugtong MHP VIII Amandaraga MHP Mindanao Agribusiness Salug Daku MHP IX Lower Dapitan MHP Upper Dapitan MHP Middle Dapitan MHP Agus 3 Hydroelectric Plant X Tagoloan Hydropower Cabulig MHP Suwawan MHP XI Tamugan AB, Panigan and Suawan Hydroelectric Power Talaingod MHP Magpet MHP XII T Total
360.0 8.0 6.8 3.5 0.8 0.2 0.1 0.2 3.2 1.5 1.6 2.3 3.0 8.0 23.5 41.0 17.8 5.4 33.0 4.0 1.0 4.0 225.0 6.0 3.8 3.6 4.4 68.0 8.0 5.5 34.5 1.0 10.0 1,025.10
2011 2011 2011 2014 2014 2010 2010 2010 2010 2010 2010 2010 2010 2012 2012 2012 2013 2013 2013 2013 2014 2014 2011 2010 2013 2013 2013 2012 2010 2011 2010 2012 2012
Kalayaan, Laguna Naujan, Mindoro Oriental Puerto Princesa Palawan Palawan Palawan Malinao, Albay Malinao, Albay Malinao, Albay Virac, Catanduanes Caramoran, Catanduanes Caramoran, Catanduanes San Miguel, Catanduanes Catanduanes Antique Madalag, Aklan Libacao, Aklan Negros Oriental Negros Oriental Negros Oriental Igbaras, Iloilo Samar Eastern Samar Saguiaran, Lanao del Norte Josena, Zamboanga del Sur Zamboanga del Norte Zamboanga del Norte Zamboanga del Norte Sumilao, Bukidnon Claveria, Misamis Oriental Davao City Davao City Talaingod, Davao del Norte Magpet, North Cotabato
Table 8. MINI-HYDROPOWER PROJECTS ON-GOING CONSTRUCTION (MW)

Project Sevilla Hinubasan San Luis Cantingas Total Capacity 2.50 0.35 0.75 0.96 4.56 Location Sevilla, Bohol Dinagat Island, Surigao del Norte San Luis, Aurora Sibuyan Island, Romblon Commissioning Year 2008 2008 2008 2008
The DOE issued non-exclusive reconnaissance permits for 15 minihydro projects in 2006. Additional 11 mini-hydro projects were given such permit during the 1st quarter of 2007. Feasibility studies for these projects are still being undertaken.
Energy Independence
the Ambabag MHP with 0.2 MW additional capacity in 2009. In the same year, the LGUs of Mercedes, Camarines Norte and Cantilan, Surigao del Sur have scheduled the implementation of Colasi and Sipangpang MHPs. Meanwhile, HEDCOR, Inc. targeted the implementation of Sibulan HEP located in Davao del Sur in 2009. The project has a potential capacity addition of 42.5 MW. Gerphil will proceed with the implementation of the 110-kW Panoon Falls MHP in Impasug-ong, Bukidnon also within the same year.
Table 9. INDICATIVE BIOMASS PROJECTS (MW)

Region Project Capacity 9.9 0.8 9.9 9.9 2.5 2.5 2.5 15.0 3.7 10.0 2.5 5.0 25.0 12.0 50.0 5.0 2.5 10 5.2 183.9 Year Available 2014 2014 2014 2014 2014 2014 2014 2009 2014 2010 2014 2014 2010 2010 2013 2014 2014 2010 2014 Location Calasiao, Pangasinan Gamu, Isabela Isabela San Jose City, Nueva Ecija Quezon, Nueva Ecija Talavera, Nueva Ecija Muoz, Nueva Ecija Bocaue, Bulacan Mindoro Occidental Mindoro Oriental Narra, Palawan Pili, Camarines Sur Panay Kabangkalan, Negros Occidental Victorias, Negros Occidental Pototan, Iloilo Bohol Cagayan de Oro City Surallah, South Cotabato
Encouraging greater private sector participation in the development of hydropower with the immediate passage of the Renewable Energy Bill. Limited interested developers due to high initial investment costs.
North Luzon Agribusiness Quadrangle I Ricehull Cogeneration II Ricehull Cogeneration Ricehull Cogeneration III Ricehull Cogeneration Ricehull Cogeneration Ricehull Cogeneration Ricehull Cogeneration Metro Luzon Urban Beltway III Ricehull Cogeneration IV-B Ricehull Cogeneration Ricehull Cogeneration Central Philippines IV-B Ricehull Cogeneration V Ricehull Cogeneration VI Ricehull Cogeneration Bagasse Cogeneration Ricehull Cogeneration Bagasse Cogeneration VII Ricehull Cogeneration Mindanao Agribusiness X Ricehull Cogeneration XII Ricehull Cogeneration Total
Biomass
Renewable energy from biomass is targeted to contribute 122 MW to the overall energy selfsufficiency target of 60.0 percent in 2010. Initiatives from private sectors provide a good indication on the potential of biomass energy development in the country. This is evidenced by the 12-MW Cogeneration Plant of JG Summit Holdings, Inc. in Negros Oriental endorsed by DOE to the Board of Investments for registration under the Omnibus Investment Code. Said cogeneration plant will use the bagasse generated from the sugar milling operations of the Kabankalan, Negros Occidental and Manjuyod, Negros Oriental sugar mills and refineries of Universal Robina Corporation, one of the subsidiaries of JG Summit Holdings, Inc.
Committed Projects
In the municipalities of San Manuel, Cabatuan and Luna in Isabela province, own-use ricehull cogeneration plants are expected to provide an additional capacity generation of 5 MW by 2008. Proponents of these projects are La Suerte Rice Mill, Family Choice Grains Processing Center and Golden Season Grain Center. On the other hand, by-product from sugar cane industry is providing an option for energy resource in the Central Philippines super region. The Central Azucarera de San Antonio in Passi, Iloilo has an ongoing pre-commissioning activities on bagasse cogeneration plant with 15-MW capacity. Likewise, the municipality of Talisay in Negros Occidental through its proponent, the First Farmers Holdings, Inc. is 40.0 percent complete in the construction of the physical structure of a 30-MW bagasse cogeneration plant. Both cogeneration plants are planned to serve the energy requirement of the proponents by 2008 and the excess will be distributed through the grid.
Action Plan
Administer R.A. 7156 (MiniHydropower Law) with enhanced participation of the Market Service Center (MSC) created under the Capacity Building to Remove Barriers to Renewable Energy Development (CBRED) project.
BIOMASS, SOLAR, WIND

To further promote the wide scale use of renewable energy sources, about 740.4 MW of indicative capacities from biomass, solar, and wind energy sources are identified for possible development. About 556.5 MW will come from wind power projects and the balance of 183.9 MW from biomass.
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Table 10. INDICATIVE WIND POWER PROJECTS (MW)

Capacity Year (MW) Available North Luzon Agribusiness Quadrangle I 40.0 2009 46.0 2010 40.0 2014 57.0 2014 40.0 2014 25.0 2014 35.0 2014 III 50.0 2014 Metro Luzon Urban Beltway IV-A 50.0 2013 25.0 2013 IV-B 5.0 2013 3.4 2009 10.0 2014 20.0 2013 Central Philippines IV-B 1.7 2009 3.4 2009 5.0 2012 V 5.0 2009 VI 30.0 2010 20.0 2010 20.0 2010 10.0 2012 Mindanao Agribusiness CARAGA 15.0 2011 Total 556.5 Region Location Burgos, Ilocos Norte (Phase 1) Burgos, Ilocos Norte (Phase 2) Pagudpud, Ilocos Norte Pasuquin, Ilocos Norte Suyo, Ilocos Sur Western Pangasinan Eastern Pangasinan Carranglan, Nueva Ecija Mauban, Quezon Caliraya, Laguna Sta. Cruz, Marinduque Marinduque Abra de Ilog, Occidental Mindoro Puerto Galera, Oriental Mindoro Romblon Tablas Island, Romblon Tablas Island, Romblon Baleno, Masbate San Carlos Negros Occidental Pandan, Antique San Remigio, Antique Manoc-manoc, Aklan Nuventa, Surigao del Sur
The DOE monitored the activities of six wind sites with existing PCCs. It is expected that ongoing activities would lead to the development and implementation of wind projects in the contract areas.
Committed Project
Phase 2 of the wind project in Bangui, Ilocos Norte is targeted for commissioning in 2008 with Northwind Power Development Corp. as the proponent. The project is expected to provide additional 8MW capacity addition to the Luzon grid.
Indicative Projects
Additional capacity of 556.5 MW is expected from 23 indicative wind sites during the planning period (Table 10). Indicative projects of 333 MW potential capacity additions located in North Luzon Agribusiness Quadrangle as well as those in Metro Luzon Urban Beltway (113.4 MW), Central Philippines (95.1 MW) and Mindanao Agribusiness (15 MW) can either be connected to grid or off-grid.
Indicative Projects
A total of 183.9 MW rice hull and bagasse-fueled co-generations projects distributed over the super regions are lined up within the planning period (Table 9). The Bulacan Biomass-to-Energy Project in Bocaue by the Global Green Power Plc (GGP) shall be expected to generate additional capacity of 15 MW to the Luzon grid in December 2009. GGP also has three other biomass projects the Panay Biomass Power Project (25 MW), Mindoro Biomass Power Project (10 MW), and the Cagayan de Oro Biomass Project (10 MW) which are proposed to be completed in 2010. The Panay and Cagayan de Oro Biomass Projects shall be connected to the grid. Capacity additions expected from these biomass indicative projects are: 15 MW in 2009, 57 MW in 2010, 50 MW in 2013 and 61.9 MW in 2014. A number
of these co-generation projects are located in the provinces covered by the North Luzon Agribusiness Quadrangle and Central Philippines super regions.
Wind
Wind power in the country is gaining interest from potential investors. A total of seven applications for Production-Sharing Contracts (PSC), such as PreCommercial Contract (PCC) and PreNegotiated Commercial Contract (PNCC), have been processed. The PCC covers the detailed wind resource assessment and feasibility study phase while PNCC covers the actual project implementation or commercial phase. The PNOC-EDC the countrys leading geothermal energy developer now ventures into the development of other renewable
Solar
The 25-MW initial capacity of the Sunpower Solar Wafer Fabrication Plant was raised to 50 MW in 2005 and increased further to 108 MW in 2006. It is planned to gradually increase its capacity to 400 MW by 2010. Photovoltaic battery charging stations installed in the year under review with the capacity of 110.4 kWp were able to energize 3,680 households in off-grid barangays in Visayas (six barangays) and Mindanao (86 barangays).
energy. It has filed its application for a PSC with DOE for wind power development in Nagsurot, Burgos (Ilocos Norte) while the UPC Asias application covers areas located at Burgos and Pagudpud both in Ilocos Norte.
Energy Independence
Implementation of the Victorias and Talisay bagasse co-generation power plants, with combined total capacity of 80 MW, has been deferred due to changes on the investment priorities of the project proponents. High upfront capital costs limit interested developers to invest on development projects in biomass, solar wind and ocean energy projects.
of the Biofuels Act of 2006 on 17 May 2007 in consultation with the National Biofuels Board11 (NBB) and other stakeholders. The creation of the NBB is mandated under the law to monitor and evaluate the implementation of the National Biofuels Program. The Biofuels Act of 2006 seeks to reduce dependence on imported fuels with due regard to the protection of environment and consistent with the countrys sustainable economic growth thrust to expand opportunities for livelihood, specifically in the countryside. With the regulatory environment in place, the development of the local biofuels industry will accelerate governments efforts towards attaining energy self-sufficiency.
Action Plan
Conduct promotion activities on the development and utilization of biomass, solar and wind resources. Continuous conduct of detailed wind resource assessment Offer the feasible sites identified under the detailed resource assessment through wind contracting rounds.
B. INCREASE USE OF ALTERNATIVE TRANSPORT FUELS

The intensified development and utilization of alternative fuels for transport use is seen as a continuing strategy to reduce the countrys dependence on imported oil. It also provides a viable solution to cushion the impact of highly volatile petroleum prices to the economy as well as promote clean and ecologyfriendly energy sources. The major alternative fuels being promoted are biofuels that include biodiesel and bioethanol, autogas and compressed natural gas (CNG). Prospect on the use of jatropha curcass as a potential biodiesel feedstock is also being explored.
The Biofuels Act of 2006 was signed by Pres. Arroyo in ceremonies held on 12 January 2007 in Malacaang.
The importance of biofuels was highlighted during the 24th ASEAN Ministers on Energy Meeting (AMEM) held in Vientiane, Lao PDR in July 2006. Emphasis was given on the need for closer cooperation and exchange of experience among ASEAN countries in promoting the development, production and utilization of biofuels, including the relevant fiscal incentives, funding facilities and regulatory infrastructures. Similarly, the East Asia-ASEAN Declaration on Energy Security,12 acknowledged the significance of biofuels as one of the measures in realizing the common goals of Regional Energy Security.
Biodiesel
Coco Methyl Ester (CME). The government continued to implement and monitor compliance to Memorandum Circular No. 55 issued on 09 February 2004, Directing all government agencies, including government-owned and controlled corporations to incorporate the use of one percent (1%) by volume in their diesel requirements. The total number of government agencies complying with M.C. 55 has increased from 59 agencies (1,100 diesel-fuelled vehicles) in 2005 to 127 agencies (1,542 dieselfuelled vehicles) in 2006.
11
Performance Assessment Biofuels

The signing of R.A. 9367, An Act to Direct the Use of Biofuels, Establishing for this Purpose the Biofuels Program, Appropriating Funds thereof, and for other Purposes, otherwise known as the Biofuels Act of 2006, on 12 January 2007 by President G. M. Arroyo provides the impetus for the full development and utilization of biofuels in the country. Said Act mandates the use of biofuels and establishes the National Biofuels Program to ensure a sustained investment climate for production, distribution, and utilization of biodiesel and bioethanol.
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Correspondingly, this was followed by the issuance of D.C. No 2007-05-0006 or the IRR
12
The NBB is composed of the DOE Secretary as Chairman and the Secretaries of the Department of Trade and Industry (DTI), DOST, Department of Agriculture (DA), Department of Finance (DOF), Department of Labor and Employment (DOLE), and the Administrators of the Philippine Coconut Authority (PCA) and the Sugar Regulatory Administration (SRA) as members. The East Asia Declaration on Energy Security was espoused during the 12th ASEAN Summit in Cebu City in January 2007.
To ensure a stable supply of CME in the market, the DOE approved the accreditation of Romtron, Inc. in Odiongan, Romblon and Pure Essence International, Inc. in Quezon City. Currently under review is the application of Mount Holly Coco Biodiesel Plant in Lucena City. These new entrants are in addition to the first two approved manufacturing companies in 2005, namely: Senbel Fine Chemicals, Inc. and Chemrez, Inc., which are now very much active in the manufacturing and marketing of CME. As of end-2006, local CME production reached 111.9 million liters while sales of manufacturers/ retailers reached 655,401 liters of pure CME and 32.3 million liters of the CME blend (B1). The B1 blend is commercially available in 38 stations of Flying V with the same price as pure petroleum diesel. On the other hand, the first Biofuels Center was launched at the Philippine Coconut Authority (PCA) Compound in Quezon City in February 2006 to serve as venue to all IEC-related activities. The Philippine National Standard (PNS) for pure CME has been promulgated while the Technical Committee on Petroleum Products and Additives (TCPPA) is formulating the PNS for the B1 blend. On the other hand, the Chamber of Automotive Manufacturers of the Philippines, Incorporated (CAMPI) has stamped its approval on the 1.0 percent CME blend for diesel without any modification. Jatropha Curcas (Tubang Bakod). In recognizing the importance of developing baseline information on the potential of jatropha as a viable feedstock for biodiesel, the government has embarked on intensive consultations with various stakeholders. Coordination meetings are continuously being carried out on technology exchange, resource assessment as well as on the various modes of processing jatropha oil to ensure capability in meeting the requirements of the program. To further address issues on supply security, resource assessment was also conducted in the cities of Davao and General Santos. In addition, the PNOCAlternative Fuels Corporation13 (PNOC-AFC) also planned to put up a jatropha plantation in Mindanao Geothermal Production Field in Kidapawan.
13
With regard to product standard, the test protocol for jatropha methyl ester-diesel fuel blend is being formulated by the TCPPA. The DOE also conducted a test on jatropha oil as a possible fuel for plant oil stove in coordination with the Leyte State University. As part of building local capability, the DOE together with the DA, PCA and DOST participated in a study mission to India, a country known to have proven experiences in cultivating jatropha.
Bioethanol
The introduction of E10 (10.0 percent bioethanol blend) in the market was initiated by new industry players such as Seaoil and later, Flying V in at least four of its stations in Metro Manila. The Pilipinas Shell also launched the Shell Super Unleaded E10 in 31 gasoline stations in Metro Manila with a 50-centavo cheaper price than its regular unleaded gasoline at the pumps. The government issued the following policy directives to encourage stakeholder participation in the program: a) E.O. 488 Modifying the Rate of Import Duty on Components, Parts and Accessories for the Assembly of Hybrid, Electric, Flexible Fuel and CNG Motor Vehicles under Section 104 of the Tariff and Custom Code of 1978 issued on 12 January 2006, allows importations under the Motor Vehicle Development Program at zero percent rated-import duty on parts and components that will be used for the assembly and manufacture of vehicles powered by alternative fuels; b) E.O. 449 Modifying the Rates of Import Duty on Bioethanol Fuel under Section 104 of the Tariff and Customs Code of 1978 issued on 22 July 2005, reducing import duties on bioethanol products to be used in the program from 10.0 percent to 1.0 percent; c) Revenue Regulations No. 08-2006 issued in May 2006 by the Bureau of Internal Revenue (BIR) implementing the guidelines on the taxation and monitoring of bioethanolblended gasoline and imported or locally manufactured fuel bioethanol for excise tax purposes; and,
The PNOC-AFC was established in July 2006. Its primary mandate is to explore, develop and accelerate the utilization and commercialization of alternative fuels in the country.
The increase in utilization of CME as an alternative transport fuel is likewise provided in various executive issuances such as A.O. Nos. 103 (31 August 2004), 126 (13 August 2005), and 110-A (27 March 2006), which deal on government austerity measures, energy conservation program and Government Energy Management Program, respectively.
On the other hand, the Malaysian firm Biogreen Energy SDN BHD is preparing to sign an agreement with PNOC-AFC on the establishment of jatropha nursery and plantation in two different locations. The MOU provides for the production of about 30 million seedlings by the Biogreen Energy to supply the PNOCAFCs seed requirement for its 700,000 hectares of jatropha plantations in the country.
Energy Independence
d) D.C. No. 2006-08-0011 issued by the DOE in August 2006 prescribing Interim Guidelines for the Accreditation of Oil Industry Participants in the Bioethanol Program for the effective monitoring and implementation of the program while in the voluntary phase and in the preparation for a smooth transition to nationwide legislated mandate. Meanwhile, the DOE has endorsed the proposals of local investors, such as JG Summit Holdings and Biofuels 88 Corporation, who have signified their intention on bioethanol production to the BOI. It also endorsed the application of Zambo Norte Bioenergy Corporation to the Securities and Exchange Commission (SEC). A major development in the program was the PhP 1.0 billion investment commitment of Ford Philippines for the building of a flexible fuel engine plant in Sta. Rosa, Laguna. This was followed by the commercial launching of the first Ford Flexi-Fuel Vehicle (FFV) model in April 2006 to boost the countrys bid of becoming the ASEAN Center of Excellence for Flexible Fuel Technology. The FFV can run on regular gasoline or a blend of 85.0 percent ethanol (E85) and 15.0 percent gasoline.
while test runs were done for the CNG buses owned by H.M. Transport and K.L. CNG Bus Transport Corp. On 09 January 2006, a Certificate of Authority to Import (CAI) was issued to RRCG Transport and a preliminary evaluation for the application of accreditation for Grandstar and First CNG, Inc. was undertaken. For a continuous tie-up with the CNG-NGV industry at the international level, the DOE renewed its membership with the Asia Pacific Natural Gas Vehicle Association (ANGVA) on 28 February 2006. Coordination meetings are also continuously being held with the accredited bus operators14 for regular updates on the program. Meanwhile, the DOE has received expressions of interest from private entities/ companies to participate in the program. In terms of promotional activities, a CNG threewheeler vehicle was showcased during the First National Conference and Exhibit on Tricycle Transportation Development held in Iloilo City on 28-30 June 2006. On the other hand, the Automobile Association of the Philippines Motorshow Exhibit held at the Philippine International Convention Center in May 2006 featured the DOEs CNG demonstration units.
Compressed Natural Gas (CNG)

Policy Initiatives. On 20 April 2006, the DOE issued D.C. No. 2006-04-0004 adopting D.C. No. 2004-04-004 titled Guidelines on the issuance of certificate of accreditation and certificate of authority to import under the Natural Gas Vehicle Program for Public Transport (NGVPPT) as the implementing rules and regulations of E.O. Nos. 396 and 488 dated 31 December 2004 and 12 January 2006, respectively, and D.C. No.2005-07-006 dated 05 July 2005 and amending certain provisions of the said D.C. No. 200404-004. The policy directive aims to ensure a unified and coordinated effort in establishing a successful and robust natural gas industry. The D.C. also puts in place a portfolio of incentives for private sector participation in the required logistics and infrastructure support to the program. Supply Infrastructure. The launching of the CNG mother station in Tabangao, Batangas and the daughter refilling station in Bian, Laguna in October 2007 will provide a strong boost to the use of CNG in the transport sector. Meanwhile, the DOE and PNOC jointly conducted a site inspection in the province of Batangas to look for a possible location of another mother station. Market Development. A total of 22 imported CNG-Original Equipment Manufactured (OEM) commercial buses, five of which are self-drive away (SDA) chassis, are already in the country. Preliminary inspections were conducted on the SDA CNG units
Pilot Pinoy CNG buses launched by Pres. Arroyo on 24 October 2007 in Laguna to highlight the commercial operation of rst ever motherdaughter relling station.
As part of the study on CNG buses, the DOE conducted test runs from Taguig City to Cavite on 1113 January 2006 to determine its fuel efficiency and performance. Capacity building and IEC activities were organized for the stakeholders in collaboration with the United States Agency for International Development (USAID) and United States Department of Energy (USDOE). Standards Development. In November 2005, two additional CNG/NGV standards were promulgated to guide the stakeholders in the effective implementation of NGVPPT, namely: DPNS NFPA: 2005 (2002 Edition) on the CNG Vehicular Fuel Systems; and, DPNS ASME B3.3:2005 (2002 Edition) for the Process Piping Code.
14
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To date, NGVPPT Accredited Bus Operators include: HM Transport Inc., RRCG Transport System Inc., KL CNG Bus Transport Corp., Paradise Transport Corp., BBL Transport System Inc., Greenstar Express Inc., CNG Vehicles Corporation
Policy Initiatives. To regulate the fast-growing autoLPG industry in the country and protect the consuming public, the DOE issued D.C. No. 200702-0002 Providing for the Rules and Regulations Governing the Business of Supplying, Hauling, Storage, Marketing and Distribution of LPG for Automotive Use on 13 February 2007. The D.C. aims to eliminate illegal and unsafe operation practices in the auto-LPG business and impose penalties on violations to health, safety and product quantity/quality standards. Supply Infrastructure. There is a growing demand of LPG use in the transport sector in view of the cheaper autoLPG prices as compared to conventional fuels. From nine dispensing stations, the number has abruptly increased to over 80 and continuously increasing, while the garage-based dispensing stations has totaled to 35. The inventory of existing dispensing pumps and their operators is as follows: Petron (13); NAIADDS (2), Petronas (13), Shell AutoLPG (11), Liquigaz (7), Total Phil. (2), Seaoil (1), and Pryce Gas (1). These dispensing pumps are located all over the country, though majority of these are found in Metro Manila. To monitor compliance to safety standards, the Technical Committee on Dispensing Station (DOE, DOST, LTO, DTI-BPS, DOLE and Fil-Car Foundation) regularly conducts inspection activities. Market Development. There is also an increasing demand for autoLPG conversion. To date, a total of 19 autoLPG government-recognized conversion shops are currently operating in the country and there are about 7,000 autoLPG converted units throughout the country from only 800 units in 2005. The local transport operators have been encouraged to convert their units for autoLPG use considering the minimal cost of conversion kit ranging from PhP 24,000 to PhP 55,000 per unit and the economic advantage of using low-cost priced LPG over conventional fuels whose prices are highly volatile. Standards Development. To ensure the protection and safety of the public and the industry in the use of auto-LPG and its technology, the DOE and DTI-BPS in coordination with the private sector have developed and promulgated four sets of auto-LPG standards in November 2006 namely: (1) PNS/UN ECE 67:2006 Uniform provision concerning, (1.1) Approval of specific equipment of motor vehicles using liquefied petroleum gases in their propulsion system; (1.2) Approval of vehicle fitted with specific equipment for the use of liquefied petroleum gases in their propulsion system with regard to the installation of equipment; (2) PNS/UN ECE 115:2006 Uniform provisions concerning the approval of Specific LPG retrofit systems to be installed in motor vehicles for the use of LPG in
Measurable Sectoral Targets Biofuels

The implementation of Biofuels Act of 2006 is one of the many strategies that the government is taking seriously to mitigate our dependence on imported fuels. It is expected to impact in the countrys economic growth since it will accumulate savings through fuel displacement and opens up new opportunities for investments.
Biodiesel (CME)
Under R.A. 9367, the DOE envisage the nationwide blending of 1.0 percent biodiesel in all diesel-fuel requirements of the country commencing in May 2007 to reach 2.0 percent by 2009. The 1.0 percent mandated blend would correspond to a total of 64.4 million liters of diesel fuel displacement in 2008. Meanwhile, the 2.0 percent biodiesel blend, which shall start in 2009, is expected to displace a total of 133.7 million liters of diesel fuel to reach 160.7 million liters by the end of the planning period (Table 11).
Table 11. BIODIESEL MEASURABLE TARGETS
Year Diesel Demand (In million liters) 5,985.29 6,209.74 6,442.60 6,684.20 6,934.86 7,194.92 8,035.08 Biodiesel Blend (In accordance with R.A. 9367) 1% 1% 2% 2% 2% 2% Fuel Displacement (In million liters) 62.10 64.43 133.68 138.70 143.90 160.70
2006 2007 2008 2009 2010 2011 2014 Note: * Based on actual 2006 OEB and 2005-2014 per fuel growth rate * Based on 2006 average price of diesel, PhP 34.50/liter
Bioethanol
A nationwide mandatory blending of 5.0 percent bioethanol by volume shall compose the total gasoline to be sold and distributed by oil companies within two years from the date of effectivity of the law. This is targeted to expand to 10.0 percent blend by 2011. The 5.0 percent mandatory blend in 2009 would displace a total of 208.1 million liters of gasoline fuel, while the 10.0 percent blend would result to a total of 460.6 million liters of fuel displacement in 2011 to reach 536.3 million liters by 2014 (Table 12).
AutoLPG
their propulsion system; (3) PNS 04-2006 Road Vehicles-automotive LPG components CONTAINERS; and, (4) PNS/DOE FS 3:2006 AutoLPG Dispensing Stations. In October 2006, the DOE participated in the Public Consultation on Standards and Regulations for the effective implementation of the Philippine AutoLPG Program in Metro Manila.
Energy Independence
Table 12. BIOETHANOL MEASURABLE TARGETS

Year 2006 2007 2008 2009 2010 2011 2014 Gasoline Demand (In million liters) 3,574.96 3,760.86 3,956.43 4,162.16 4,378.59 4,606.28 5,362.87 Bioethanol Blend (In accordance with R.A. 9367) 5% 5% 10 % 10 % Fuel Displacement (In million liters) 208.11 218.93 460.63 536.29
Bioethanol
Sustainability of sugarcane supply and other feedstocks for bioethanol production Need for more investors to meet the mandated blend Readiness of vehicles to utilize bioethanol blend beyond 10.0 percent
Note: * Based on Actual 2006 OEB and 2005-2014 per fuel growth rate * Based on 2006 average price of gasoline products, PhP 39.30/liter
CNG
CNG
The delay in the commercial operation of both the mother and daughter refilling stations in Tabangao, Batangas and Bian, Laguna, respectively has held back the implementation of the NGVPPT resulting in corresponding adjustment in its target for this Plan Update. As a result of the inauguration of CNG motherdaughter stations in October 2007, 70 CNG buses are expected to be on commercial operation in 2009 to increase to 200 the following year for the completion of the pilot phase implementation. The number of CNG buses will reach a total of 3,000 in 2014 for the full implementation of the program. In anticipation, ten CNG daughter stations will be put up by 2010 and additional five CNG refilling station by 2014.
Envisioned expansion of CNG requires compliance to standards in technology application such as repowering/conversion of used vehicles into CNGfed. Gas supply and infrastructure that will respond to the need of the growing CNG industry.
AutoLPG
Need to provide policy options to hurdle price fluctuations in LPG, which is similar to the current situation of gasoline and diesel. Abrupt increase of LPG utilization in the transport sector could soon compete with that of the residential sector requirements that could trigger supply constraints and possible increase in LPG prices
Action Plan
To advance the development, production and utilization of alternative fuels, the following action plans will be carried out for the planning period:
Development Challenges Biofuels

The government is keen on expanding the utilization of biofuels blend in the areas of power, shipping, air transport and other industries. In this context, the DOE has identified issues that may hinder the expansion of the program, such as the acceptability of biofuels blend in said sectors/industries, the availability of fuel supply in the future, and the absence of standards for higher blends of biofuels.
Biofuels
Address supply sustainability issues through enhanced research and development activities for other potential feedstock of biofuels in cooperation with concerned government agencies and academic institutions. Develop standards for higher biofuel blends and test protocols for multi-blends to set the benchmark for future mandates. Intensify IEC and market development of biofuels nationwide to obtain greater support from different sectors. Issue guidelines for the accreditation of new biofuels producers as well as on the production, handling, transport and storage of biofuels to protect the industry from any malpractices and irregularities.
Biodiesel
Need to create new domestic market and increase public awareness on the program especially among prospective CME manufactures, car manufacturers and associations, oil companies, government agencies and government financing institutions (GFIs), legislators, non-government organizations (NGOs), and transport group Readiness of vehicles to utilize biodiesel blend beyond 5.0 percent
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Expand utilization of biofuels in power plants, industries and other modes of transport. Create a One-Stop Shop Action Center/Satellite Offices to assist investors on biofuels.
AutoLPG
Coordinate with other concerned government agencies and stakeholders to address issues and concerns related to the implementation of AutoLPG program. Conduct study on Fuel Price Mechanism for LPG utilization by the transport sector to determine the impact of its fast growing demand to the residential sector. Intensify IEC activities on safety and standards to inform the consuming public on the technology. Coordinate with the private sector on other LPG technologies for transport. Conduct a comprehensive study on possible utilization of autoLPG in tricycles.
Biodiesel (CME)
Increase biodiesel blend by 3.0 to 5.0 percent in 2011. Conduct cost benefit analysis of biofuel blend ratios for power plants and marine transport. Conduct durability test for engines and parts of all diesel-fed vehicles that will run on increasing biodiesel blend.
Bioethanol
Increase bioethanol blend by 10.0 percent in 2011. Prioritize promotion of flexi-fuel vehicles since these can cope with higher fuel ratios of bioethanol. Intensify IEC programs to attract prospective investors.
C. ENERGY EFFICIENCY AND CONSERVATION PROGRAMS

The governments National Energy Efficiency and Conservation Program (NEECP) launched by President Gloria Macapagal-Arroyo in August 2004, was aimed to further strengthen the implementation of the energy efficiency and conservation programs through the promotion of judicious and efficient utilization of energy in the country. Its objective is to make energy conservation a way of life for every Filipino through the theme EC Way of Life. To effectively promote the NEECP, the DOE in partnership with the private sector has continuously pursued the aggressive implementation of existing energy conservation programs to rationalize energy demand consumption, particularly for petroleum products and electricity. The overall goal is to curb the impact of oil price volatility to the economy and reduce carbon dioxide emissions to protect the environment.
CNG
Enhance the policy directives to expand the utilization of CNG for transport and to encourage private sector investment. Strengthen coordination with program stakeholders to facilitate the program implementation. Conduct viability studies on the commercial operation of CNG buses in Metro Manila and nearby provinces as well as in the Northern corridor and other parts of the country. Improve local expertise on CNG conversion and retrofitting technology. Intensify IEC in Southern Luzon and Metro Manila areas in order to instill public awareness on the CNG program. Develop database for CNG utilization and NGV buses to ensure proper monitoring of the program. Establish a multi-agency certification body to handle the issuance of certification for CNG buses, refilling stations and related facilities.
The energy conservation efforts of the government generated energy savings of about 6.1 MMBFOE (0.88 MTOE) in 2006, with equivalent CO2 emission avoidance of 2.1 MMMT. This includes savings accounted from the energy management activities conducted by DOE such as the spot check program of government agencies nationwide per A.O. 126, energy standards and labeling program, energy audits of various commercial and industrial establishments and recognition award program.
Conduct continuing study on the effects of using higher blends of biodiesel to determine potential damages to vehicles.
Develop manpower technical capability on CNG/ NGVs technology and related facilities.
IEC Campaign. The main focus of the IEC campaign is to promote the efficient utilization and conservation of electricity and fuel in all energyconsuming sectors. The campaign is in compliance with E.O. 123 Institutionalizing the Committee on Power Conservation and Demand Management (Power Patrol) and E.O. 472 Institutionalizing the Committee on Fuel conservation and Efficiency in Road Transport (Road Transport Patrol). Among the activities conducted under the IEC campaign include seminarworkshop for target participants in the commercial, residential, industrial and government buildings; fuel economy run for road transport vehicles; and the use of television, radio and print media ads to reach wider target sectors. The first DOE-Flying V Biodiesel Fuel Economy Run was held on 09 December 2006 with a total of 20 participants coming from national government agencies and various associations of mega taxis and passenger jeepneys. This is in line with the governments program on the mandatory use of biofuels to reduce fuel consumption and toxic vehicular emissions in the country while simultaneously improving engine efficiency and combustion leading to increased mileage in vehicles. About 25 seminar-workshops on energy conservation were held across the country in 2006 until the first quarter of 2007 with audiences from the sectors in government, business and transport, as well as the academe, specifically elementary and high school students and teachers. Television ads under the theme Kuryente were aired over Channels 4, 9, 13 and 25 as well as radio ads titled Gasolina in 98 KBP member-radio stations to reach a wider consumer base in residential and transport sectors. Voluntary Agreements Program. Activities under this program include, among others, the promotion of the car-less day, carpooling and anti-idling campaigns. The aim is to promote fuel conservation and reduce pollution and traffic congestion in the country in partnership with various transport groups, local government units (LGUs), schools and shopping malls as well as with private individuals. A voluntary agreement is arranged between the DOE and the industrial establishments under the so called Partnership for Energy Responsive Companies/Ecozones. Energy Efficiency Standards and Labeling Program. As part of its continuing effort to promote the welfare of consumers, the DOE has been closely collaborating with various organizations including active alliance with DTI, Philippine Appliance Industry Association and the Philippine Lighting Industry Association for the effective implementation of the governments energy efficiency standards and labeling
Energy Independence
for selected household appliances and lighting products. Significant benefits have been gained through this program such as the improved quality of locally-manufactured products, making them more competitive in the local market. Furthermore, as a result, it discourages the manufacturing and the importation of inefficient household appliances and lighting products sold in the market. The program, which started in 1993, consists of energy labeling for room air conditioners, refrigerators, compact fluorescent lamps (CFLs) and fluorescent lamp ballasts. In 2006, the labeling program generated an estimated energy savings of 2.03 MMBFOE (0.29 MTOE) which is over 100 percent increase from its 2005 performance of 0.98 MMBFOE (0.14 MTOE). CFL labeling was the biggest contributor, generating an estimated savings of 1.13 MMBFOE (0.16 MTOE). The DOE aims to expand the coverage of the program within the planning period to include linear fluorescent lamps, luminaries, household electric fans, industrial fans and blowers, television sets and electric motors. Consumer education shall also be undertaken as complementary activity for the effective implementation of the program.
The Land Transportation Ofce earned 98.0 percent in a spot check inspection conducted by the DOE Team headed by Assistant Secretary Matanog Mapandi.
Government Energy Management Program (GEMP). The GEMP aims to integrate energy efficiency concepts into the operation of government agencies to realize the reduction target of ten percent in electricity and fuel consumption in compliance with the Presidential directive under A.O. 126. The major activities under this program include the conduct of monitoring and energy audit spot check in all government buildings and the conduct of seminars on energy efficiency and conservation for government employees. In 2006, the DOE has been able to conduct spot checks in 150 government buildings nationwide. From
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Moreover, the DOE has conducted spot check inspections in 147 government agencies during the first quarter of 2007. Systems Loss Reduction Program. Under the umbrella of the Energy Management Program, the Systems Loss Reduction Program enables private utilities to decrease its systems losses through redesigning efforts made in transmission lines, improvement of substation equipment such as installation of capacitors and voltage regulators, and strict monitoring of electricity pilferers. This program reduced the systems loss from 40.8 percent in 2005 to 40.4 percent in 2006. Recognition Programs. In recognition of the private sectors effort to promote and implement energy conservation programs, the Don Emilio Abello Energy Efficiency Awards are handed out to private companies that make significant improvements in their energy consumption patterns. On the other hand, the Government Energy Management Program Award is given to government agencies that exceeded the mandatory 10.0 percent reduction in energy consumption. At the regional level, the Don Emilio Abello Award giving body recognizes Philippine companies that are recipients of the ASEAN Best Practices Competition for Energy Efficiency and Conservation in Buildings. Likewise, the award giving body also recognizes companies who are recipient of the ASEAN Energy Management Award for Major Building and Industries. The ASEAN award bestows international recognition to qualified ASEAN countries that are exemplary in the field of energy efficiency and conservation and energy management system application. In 2006, some 33 establishments received the Don Emilio Abello Energy Efficiency Awards with two companies, Bristol-Myers Squibb (Phils.), Inc. and Toshiba Information Equipment, Philippines being elevated to the Hall of Fame for consistently being outstanding leaders in energy conservation. The total energy savings realized by these companies was equivalent to 72.4 million liters of oil equivalent, which was significantly higher by 59.0 percent from their energy savings of 29.6 million liters obtained in 2005. The Philippine-Makati Stock Exchange Building garnered the second runner-up slot in the 2006 ASEAN Best Practices Competition Award for
For the ASEAN Energy Management Award for Major Buildings and Industries, San Miguel Polo Brewery Plant and Republic Cement Corporation garnered the 1st and 2nd runner up recognitions during the awards night in 24 August 2007 held in Singapore. Energy Audit. This technical service is being offered by the DOE to manufacturing plants, commercial buildings and other energy-intensive companies to evaluate the energy utilization efficiencies of equipment, processes and operations of these companies, and recommend appropriate energy efficiency and conservation measures. In 2006, the DOE has conducted energy audits in 16 industrial and commercial companies nationwide. This activity is continuously being implemented in partnership with accredited energy service companies (ESCOs). To further enhance the energy management advisory services in the country, the Energy Service Company Association of the Philippines, Inc. or ESCO Phil. was organized in 2004. This association intends to, among others, (a) organize the firms engaged in the energy service industry to provide a forum for the effective exchange of information about industry practices and introduce new technologies for the industry; and, (b) promote energy efficiency and demand reduction technologies thereby creating tangible economic values.
The energy audit services of the DOE seeks to determine the energy use patterns of companies and commercial establishments.
Philippine Efficient Lighting Market Transformation Project (PELMATP). Since the projects inception in 2005, the UNDP-GEF funded PELMATP has been aggressively addressing the barriers to the widespread use of energy-efficient lighting systems (EELS) in the country. The over-all aim
this activity, the monthly electricity and fuel consumption reports submitted by 110 government agencies in the National Capital Region (NCR) showed aggregate savings of 36,752.3 MW of electricity, 287,296 liters of gasoline and 1,433,016 liters of diesel, translated to monetary savings of PhP 346.0 million.
Energy Efficiency and Conservation in Buildings in ceremonies held on 25 July 2006 during the 24th AMEM-SOME in Lao PDR. The building showcased its passive ventilation and natural cooling features due to its structural design, as well as introduced retrofitting by upgrading the cooling equipment and implementing other energy-saving projects, which resulted in 941.3 MW average savings per year.
Energy Independence
is to generate energy savings from the change-over to EELS which in turn would contribute to the reduction of GHG emissions in the energy sector. The project aims to achieve an aggregate energy savings of 29,000 GWh, equivalent to 2.0 percent reduction or translated to an equivalent GHG emission reduction of about 4,600 Gg of CO2. There are five core strategies or components to achieve these objectives, namely: (1) EEL Policies, Standards and Guidelines Enhancement Program; (2) EEL Applications Institutional and Technical Capacity Development Program; (3) EEL Applications Consumer Awareness Improvement Program; (4) EEL Initiatives Financing Assistance Program; and (5) EEL Systems Waste Management Program. The project targets an 11.0 percent GHG emission reduction by the end of the project in 2009.
The activities under the Energy Management Program, on the other hand, will yield an estimated energy savings of 0.57 MMBFOE (0.08 MTOE) in 2010 up to 0.69 MMBFOE (0.10 MTOE) by the end of the planning period.
IEC campaign in regional government offices, state colleges and universities for government energy management program will be focused on their compliance to A.O. 126, particularly on the submission of monthly fuel and electricity consumption report to DOE for monitoring and evaluation. Policy formulation through a D.C. that would require energy industry sectors to submit energy consumption report to DOE for monitoring purposes. Re-filing and re-activation of advocacy works for the deliberation of the Energy Conservation Bill which would institutionalize energy efficiency and conservation in the country.
Action Plan
Ground breaking ceremonies of the supply and construction of the building that will house the Goniophotometer test facility for light sources and luminaires led by former Undersecretaries Melinda Ocampo and Francisco Deln, Jr. was held on 25 July 2007.
Pursue the passage of the Energy Conservation Bill into law. Pursue the inclusion of standardized technical specification requirement in the procurement process of energy efficient lighting systems and other electrical equipment and devices in government offices e.g. the use of 36-watt instead of 40-watt CFLs and the use of energy-efficient LCD computer monitors. This shall be recommended to the Department of Budget and Management (DBM). Develop a benchmark in the commercial and government buildings including the manufacturing industry sector. To fill in the gap in the implementation of utilitybased demand side management (DSM), marketbased application under the Demand Reduction Program will instead be promoted. Meanwhile, existing policy framework for utility-driven DSM will be reviewed, as well as new set of recommendations will be submitted to concerned stakeholders for consultation to provide new policy directions. Evaluate the impact of IEC programs in the household sector through contracted survey services under the auspices of the National Statistics Office (NSO).

In June 2006, the DOE together with PELMATP signed a MOA with Gawad Kalinga (GK), among the other entities, to promote EEL systems in the first 800 households of the GK Village in Baseco Compound, Tondo, Manila. Gawad Kalinga (to give care), which started in 1995, is an organization that aims to provide land and build houses for the poor communities in the Philippines. Through the replacement of incandescent bulbs to more energy-efficient CFLs, it is estimated that these households could generate savings of about 240,000 kWh of electricity per year, equivalent to about PhP 2.1 million in annual monetary savings. For the energy labeling and efficiency standards program, the DOE will look into a minimum of 15 percent increase in the average efficiency ratings of new appliance models within the planning period. This program is also expected to generate the biggest contribution of energy savings from 6.7 MMBFOE (0.97 MTOE) in 2010 to reach 8.1 MMBFOE (1.17 MTOE) in 2014.
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Conduct of inventory of legitimate and accredited testing laboratories to encourage the private sector to venture into setting up of independent and competent testing laboratories. Promote and establish accreditation of ESCOs. Intensify promotion of Heat Rate Improvement in power plants. Establish energy label for all brand-new vehicles relative to the fuel mileage rating. Expand promotion of the Energy Efficiency and Conservation Program and Energy Consumption Monitoring in large seaborne vehicles such as passenger and cargo ships, power generating plants and power distribution utilities.
Strengthen product testing and research through enhanced testing capability of DOE-Lighting and Appliance Testing Laboratory incuding the establishment of a luminaire testing facility using a goniophotometer. This testing apparatus, which is the first of its kind in the Philippines will be used in the testing of luminaires, directional lamps and street lamps to determine and recommend better efficient lighting designs for office buildings and street lighting.
Power Sector Reforms
IV. Power Sector Reforms

A. POWER AND TRANSMISSION DEVELOPMENT PLANS
The 2007 Power Development Plan (PDP) provides a comprehensive summary of current developments in the power sector considering the current fiscal and macroeconomic challenges. It also takes into account some key factors such as the commercial operation of the WESM, the priority infrastructure projects in the Super-Regions and the governments commitment to intensify global competitiveness through reasonable electricity rate. With the sectors dynamic characteristic, industry players need to be guided on the policy and program direction towards the full implementation of the reform program that aims to establish more effective, competitive and responsive electricity market.
Table 13. EXISTING CAPACITY, as of December 2006 (MW)
Plant Type Coal Diesel Natural Gas Gas Turbine Geothermal Hydro Oil Thermal Wind Solar Total Installed 4,177 1,997 2,763 955 1,978 3,257 650 25 1 15,803 % Share 26.4 12.6 17.5 6.0 12.5 20.6 4.1 0.2 100 Dependable 3,638 1,549 2,703 680 1,684 2,726 650 9 1 13,639 % Share 26.7 11.4 19.8 5.0 12.3 20.0 4.8 0.1 100 % Usage 87.1 77.6 97.8 71.2 85.1 83.7 100.0 36.0 100.0
previous years level of 15,619 MW. In terms of capacity mix, fossilbased plants remain the dominant source with coal topping the list and contributing 26.4 percent share or 4,177 MW followed by oil with 22.7 percent (Table 13). In terms of indigenous energy resources, hydroelectric power provided the highest share of 20.6 percent while natural gas and geothermal plants contributed a total of 17.5 percent and 12.5 percent, respectively. Wind and solar power on the other hand was able to contribute 0.2 percent in the mix. Table 13 shows the percentage utilization of each plant type. Dependable Capacity. For 2006, the countrys total dependable capacity was 13,639 MW or 86.0 percent of the 15,803 MW total installed power output. Dependable capacity is defined as the maximum output that a power plant can provide
under adverse conditions for a specified period of time and taking into consideration the plants wear and tear conditions. Windbased plants can only provide approximately 36.0 percent of its maximum output. In the case of hydroelectric power plants, its operational capability is highly dependent on the availability of water. Thus, dependable capacity is expectedly high during rainy season and low in dry months. Power Generation. In 2006, the countrys self-sufficiency level went up to 66.0 percent from the 2005 level of 65.0 percent. Meanwhile, gross electricity generation in 2006 was recorded at 56,784 GWh, an increase of 0.4 percent from the previous years level.
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POWER DEVELOPMENT
Capacity Mix. The commissioning of the 210-MW Mindanao Coal by State Power Corporation in September (105 MW) and December (105 MW) 2006 brought the countrys total installed capacity15 to 15,803 MW as of end-2006. This level was 1.2 percent higher than the
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Total Installed Capacity the total generating units capacities in a power plant or on a total utility system. The capacity can be based on the nameplate rating or the net dependable capacity.
Table 14. 2006 POWER GENERATION (GWh)

Luzon Visayas Mindanao Total Actual 41,241 8,129 7,414 56,784 Forecast 43,091 6,587 7,439 57,117 % Change (4.29) 23.41 (0.34) (0.58)
Natural gas, which has replaced coal as the countrys dominant fuel since 2005, produced 16,366 GWh or 29.0 percent of the total electricity generated. However, this was lower by 2.9 percent from its 2005 level due to the 25-day maintenance schedule of the Malampaya Gas-to-Power project on 22 November to 14 December 2006. This resulted in the interruption of natural gas supply to the Ilijan, Sta Rita and San Lorenzo power plants. To meet the existing demand during said period, oil-based power plants (Malaya, Bauang Diesel, Subic and Limay) and hydropower (Binga and Pantabangan) were operated during peak hours. A block of Ilijan power plants using liquid fuel oil (LFO) was likewise put on standby reserve. Electricity generation from coal-based plants was recorded at 15,294 GWh posting a 27.0 percent share in the mix and an increase of 0.2 percent from the previous years level. The increase was due to the commercial operation of the 210-MW Mindanao coal during the 3rd quarter of 2006. The plant also contributed about 13.0 percent to the generation mix of Mindanao resulting to a decrease in its utilization levels of oil-based plants. In Luzon, electricity generation from coal-based plants decreased by 3.8 percent due to maintenance outages of Sual Units 1 and 2.
Figure 21. POWER GENERATION MIX
Natural Gas 29.8% Solar and Wind Oil-Based 0.0% 10.9% Hydro 14.8%
Meanwhile, the share of renewable energy like wind and solar in the generation mix was only 0.1 percent or 55 GWh. In terms of ownership, electricity generation from NPC-owned power plants and NPC-Independent Power Producers (IPPs) totaled 40,472 GWh, an increase of 1.1 percent from previous years level sharing 71.3 percent of the total electricity generation. The rest come from Manila Electric Company (Meralco)-IPP, Electric Cooperatives (ECs) and other IPPs. For 2007 level, the countrys electricity generation for the first half was recorded at 29, 214 GWh, 21,468 GWh in Luzon, 3,880 GWh in Visayas and 3,866 GWh in Mindanao. In terms of additional capacity, Northern Negros Geothermal with a rated capacity of 49 MW became operational in February 2007. Actual vs. Forecast. In comparing the actual and forecast data for 2006, the actual generation was slightly lower than the forecasted data. This may be due to the dispatch decisions that were made to address unscheduled plant shutdown or operational problems. Significant discrepancy was noted in the Visayas with 23.4 percent difference. This is the result of the generation planning tool used in forecasting. The tool only reflects existing demand in the Visayas grid without considering demand for export to Luzon. Electricity Sales. The countrys total electricity sales slightly grew by 1.1 percent from 47,163 GWh level in 2005 to 47,678 GWh level in 2006. In terms of comparison between the actual and forecasted data, the 2006 actual electricity sales was 13.3 percent lower than the projections. This may be attributed to typhoons Reming, Milenyo and Lucas that hit the Southern Luzon areas during the last months of 2006 causing severe damages in infrastructures and resulting in inevitable power outages.
Table 15. ELECTRICITY SALES, Actual vs. Forecast (GWh)
Luzon Visayas Mindanao Total Actual 33,941 5,551 6,179 45,671 Forecast 39,465 5,992 7,250 52,707 % Change (14.00) (7.36) (14.77) (13.35)
Coal 27.0% Total Generation: 56,568 GWh Natural Gas 28.8%
Solar and Wind Oil-Based 0.1% 8.2%
Hydro 17.5%
Coal 26.9% Total Generation: 56,784 GWh
Power Sector Reforms 34
For geothermal, electricity generation was recorded at 10,465 GWh or 18.5 percent of the total electricity production while hydroelectric power plants provided a total of 9,938 GWh or 17.5 percent of the total. Meanwhile, electricity generation from oil-based power plants hit a low of 24.1 percent or 4,664 GWh from the 2005 level. The decline is due to the ongoing program of NPC to limit the utilization of oil-based plants in the light of the soaring prices of oil in the world market.
On a sectoral basis, the residential sector posted a negative electricity sales growth of 1.3 percent. This may be due to the households conscious application of energy efficiency and conservation measures to effectively manage increases in electricity rates. On the other hand, the proliferation in the number of commercial establishments and small-scale industries indicating increased economic activities yielded substantial increase of 3.5 percent for commercial and 1.2 percent for the industrial sectors. Meanwhile, public buildings, street lights and other sector not included in the three major sectors rose by 8.3 percent to 1,275 GWh from 1,177 GWh in 2005.
Table 16. ELECTRICITY SALES BY SECTOR (GWh)
Residential Commercial Industrial Others Total 2006 15,830 12,679 15,888 1,275 45,671 2005 16,031 12,245 15,705 1,177 45,159 % Change (1.25) 3.54 1.17 8.33 1.09
showed a downward trend. This can be attributed to the economic performance of the country for the past five years. Much of the slow growth can be seen between 2003 and 2004 when the economy decelerated in 2004 due to adverse internal and external factors such as rising global oil and commodity prices, weak fiscal position and uncertainty on the outcome of the May 2004 elections.16 For the first half of 2007, the countrys peak demand stood at 8,842 MW, broken down into: 6,619 MW in Luzon, 1,078 MW in Visayas and 1,145 MW in Mindanao.
Table 18. PEAK DEMAND GROWTH RATES (Percent)
Growth Rates Luzon Visayas * Mindanao Philippines 2003 5.60 10.19 13.67 7.18 2004 2.83 3.02 4.07 3.02 2005 1.90 1.17 (2.38) 1.22 2006 0.36 2.80 6.88 1.52 AAGR 2.67 4.29 5.56 3.23
*Includes demand of PECO
During the first half of 2007, the countrys total electricity sales was recorded at 23,420 GWh, 17,848 GWh in Luzon, 2,672 GWh in Visayas and 2,899 GWh in Mindanao. Peak Demand. The countrys highest demand was recorded at 8,760 MW, 1.5 percent higher than the 2005 level of 8,629 MW (Table 17). On a per grid basis, peak in Luzon, which occurred during the month of May was 0.4 percent higher than its 2005 level. Peak in Visayas and Mindanao, on the other hand, was up by 2.8 percent with 1,066 MW and 6.9 percent at 1,228 MW, respectively. The surge in these two grids, which occurred in the month of December, was due to increased economic and social activities brought about by festivities during Christmas season.
Table 17. PEAK DEMAND 2002-2006 (MW)
Grid Luzon Visayas * Mindanao Total 2002 5,823 903 995 7,721 2003 6,149 995 1,131 8,275 2004 6,323 1,025 1,177 8,525 2005 6,443 1,037 1,149 8,629
Table 19. SYSTEMS LOSS

Generation, GWh Sales, GWh Losses, GWh Own-Use Power Losses System Losses, % 2006 56,784 45,672 11,112 4,227 6,885 12.1 2005 56,568 45,159 11,408 4,591 6,817 12.1 % Change 0.4 1.1 (2.6) (7.9) 1.0 0.1
Systems Loss. Due to the governments continuing program to increase systems reliability and efficiency, the percentage share of losses in the total electricity cycle decreased by 2.6 percent from 11,408 GWh level in 2005 to 11,112 GWh level in 2006. Almost 60.0 percent of these figures or 6,885 GWh came from aggregate distribution losses which were heightened by damages in distribution lines due to the typhoons
Actual 6,466 1,066 1,228 8,760
2006 Forecast 6,728 1,154 1,293 9,175
% Change (3.89) (7.63) (5.03) (4.52)
Change 2005 vs. 2006 0.36 2.80 6.88 1.51
AAGR 2.67 4.29 5.56 3.23
* Includes Panay Electric Company (PECO)
In terms of comparison between the actual and forecast data, actual peak demand for 2006 was 4.5 percent short of the forecast data. Much of the discrepancy was in Visayas grid where actual peak demand was 7.6 percent lower than its forecasted value. Luzon grid, being the largest among the three main islands, registered the lowest but still significant discrepancy of 3.9 percent.
that hit some parts of the country during the year. The remaining 40.0 percent comprised the utilities own-use power for office and housing.

System Capacity Addition. As projected in the PDP 2006 Update, about 1,989 MW of new generating capacities are still required in the Luzon
16
35
Despite the increases in peak demand for the past five years, annual growth rates from 2003 to 2006
NEDAs 2004 Socio-Economic Report
Table 20. SYSTEM CAPACITY ADDITION

Project Name Luzon Committed Northwind Power Project, Phase 2 Coal-Fired Power Plant Indicative Burgos Wind Power Project Phase I (formerly Luzon Wind Power Project Phase I) Ilijan CCGT expansion Bulacan Biomass-to-Energy Project Burgos Wind Power Project Phase II 2nd Phase CFB Coal-Fired Power Plant Coal Fired Power San Gabriel Power Plant Kalayaan Pumped Storage Power Plant III (CBK Expansion) Tanawon Geothermal Project Rangas Geothemal Project Manito-Kayabon Geothemal Project Balingtingon River Multi-purpose Project Pagbilao Expansion Pantabangan Expansion 2 x 150 MW CCGT Power Station Quezon Power Expansion Project Visayas Committed Cebu Coal Fired Power Plant, Phils (formerly KEPCO Coal-Fired Power Plant) Nasulo Geothermal Indicative Coal-red Plant Toledo Coal Expansion Panay Biomass Power Project GBPC Coal-Fired Plant (2x82MW) Dauin Geothermal Aklan Hydropower Project Villasiga HEP Mindanao Committed Mindanao 3 Geothermal Sibulan Hydropower Indicative Cabulig Hydro Tamugan AB, Panigan and Suawan Hydroelectric Power Cagayan de Oro Biomass Power Project Agus 3 Hydroelectric Plant SM 200 MW CFBB CFTPP Sultan Kudarat Coal Tagoloan Hydropower Total Committed Total Indicative Capacity (MW) 608.25 8.25 600.00 3,103.00 40.00 300.00 15.00 46.00 50.00 300.00 550.00 360.00 40.00 40.00 40.00 44.00 400.00 78.00 300.00 500.00 220.00 200.00 20.00 624.00 100.00 246.00 25.00 164.00 40.00 41.00 8.00 92.50 50.00 42.50 745.50 8.00 34.50 10.00 225.00 200.00 200.00 68.00 920.75 4,472.50 Target Completion Location
2008 2011 2009 2009 2009 2010 2010 2010 2011 2011 2011 2013 2013 2013
Burgos, Ilocos Norte Mariveles, Bataan Ilocos Norte Ilijan, Batangas City Bocaue, Bulacan Ilocos Norte Mabalacat, Pampanga Subic Sta. Rita, Batangas City Kalayaan, Laguna Sorsogon Sorsogon Sorsogon Nueva Ecija Pagbilao, Quezon Pantabangan, Nueva Ecija Quezon Province Mauban, Quezon
2010 2010 2010 Phase I - 2010 Phase II - 2011 2010 2011 2011 2012 2012
Naga, Cebu Nasuji, Valencia, Negros Oriental Concepcion, Iloilo Panay Island Toledo City, Cebu Panay Island Iloilo, Panay Island Dauin, Negros Oriental Libacao, Aklan Sibalom, Antique
2010 2009 2010 2010 2010 2011 2011 2012 2012
North Cotabato Sta. Cruz, Davao del Sur Plaridel, Jasaan Misamis Oriental Hedcor Tamugan, Inc. Cagayan de Oro Lanao Hydropower Development Corporation Southern Mindanao Sultan Kudarat Bukidnon
Table 21. TRANSMISSION LINE PROJECTS

Name of Project Luzon Ongoing projects Batangas Transmission Reinforcement Capex Type * Project Component Status Expected Time of Completion
New Batangas-New Makban A
Bian-Sucat 230 kV Transmission Line Hermosa-Balintawak T/L Relocation Luzon Substation Expansion -1
T T T
Luzon (North) T/L Upgrading -1
New Gamu Substation Tap Hermosa-Balintawak Transmission Transmission Line and Substation Package 2
C T C
Contract time suspended as of 15 June 2007 due to construction problem. New Makban A-Calamba Tower 50 Some portion already energized; Work suspended due to ROW problem. Calamba Tower 50-Binan S/S L/C processing Project Status Expected Batangas Substation Upgrade/ExpansionsComponent31 March 2007 Completed Makban A Switchyard 88 percent completed. Activities suspended due to shutdown schedule problem. Bian S/S On-going civil works activities. Construction of fourth Bian-Sucat 230 Eligibility criteria for approval by the Bids kV T/L. and Award Committee. Relocation of a portion of HermosaAdvertised on 23 July 2007. Balintawak 230 kV TL Expansion of four substations with a total Approved by NEDA ICC on 11 July 2007; capacity of 1200 MVA. Bauang Bian, by the NEDA Board on 24 July 2007 Cabanatuan, Cruz-na-Daan, Currimao, Preparation of tender documents Daraga, Laoag, Mexico and Naga. delayed in favor of more urgent projects, which will utilize the same manpower San Manuel Concepcion 230 kV T/L Ongoing construction Concepcion-Mexico 230 kV T/L. Ongoing construction San Manuel, Concepcion, Mexico On-going construction Substation Upgrade/Expansions Dasmarinas S/S Transformer Expansion For rebidding 230 kV Gamu substation Energized on 31 August 2007 230 kV TL segment of Balintawak-DuhatAwaiting the approval of construction by Hermosa the Toll Regulatory Board. Upgrading of 69 kV substransmission lines Completed Dec 2007 in Santiago and Alicia (Isabela province) and additional transformer in Daraga Substation Construction of a new double cuircuit Binga-San Manuel 230 kV TL Construction of 115 kV T/L and expansion of Dasmarias-Rosario substation Construction of 230 kV Overhead lines Replacement of 9 -230kV PCB in Malaya and Naga substation
Dec 2009
Time of
Dec 2009 Dec 2008 Dec 2009
Oct 2008 Jul 2008 Jun 2010 2007 Jun 2008 2007
Projects for Implementation Binga-San Manuel 230 kV T/L Dasmarias-Rosario 115 kV T/L Luzon Mindoro Interconnection Luzon Power Circuit Breaker Replacement Program * T Transmission Asset ST Sub-transmission Asset C Connection Asset
T T T T
2010 2009 2013 2011
37
grid for the entire planning period. Total committed projects reached 608.3 MW comprising of 8-MW Northwind Power Project Phase 2 and 600-MW Coal Fired Plant in Mariveles, Bataan. In terms of indicative capacity addition, a total of 16 projects with an aggregate capacity of 3,103 MW are lined-up in the entire Luzon grid. For Visayas, total committed projects reached 220 MW comprising of 200-MW Cebu coal and 20-MW Nasulo geothermal. There are also seven indicative projects in the Visayas totaling 624 MW which are still open for private sector participation.
For Mindanao, the 42.5 MW Sibulan Hydro and 50.0 MW Mindanao 3 Geothermal are committed by 2009 and 2010, respectively. In terms of indicative capacity, a total of seven projects with a total capacity of 745.5 MW are still open for private sector (Table 20).
TRANSMISSION DEVELOPMENT
The Transmission Development Plan (TDP) embodies the infrastructure projects necessary to meet customer demands and ensure the reliability, adequacy and

Name of Project Luzon Ongoing projects Luzon Substation Expansion -2 Luzon Substation Expansion -3 Capex Type * Project Component Status Expected Time of Completion
T T
Luzon Transmission Equipment Upgrade
Luzon Voltage Improvement-1 Luzon Voltage Improvement-2 San Jose 500 kV reconguration San Jose-Balintawak Line 3 Visayas Ongoing Projects Cebu-Negros Interconnection Uprating (Turnkey)
ST T T T
Replacement of existing 75 MVA transformer in La Trinidad substation Installation of additional 75 MVA transformer capacity in Tuguegarao Substation Installation of second tie-line for the Labrador-Kadampat, Reconductorin of Bauang-BPPC line with high ampacity conductor; Installation of reactors in Kadampat (2x90MVAR), Concepcion (25 MVAR), Hermosa (25 MVAR) and Naga (25 MVAR); Installation of capacitor (2x50MVAR) at Balintawak. Installation of reactor and capacitor banks in nine substations. Installation of 430 MVAR capacitor banks at four substations in Luzon. Increase reliability of San Jose 500kV substation Construction of the third line of the 18. 5km San Jose-Balintawak 230 kV T/L.
2011 2013
2009
2009 2011 2013 2013
138 kV Submarine Cable, Oil-lled Suba CTS-Pondol CTS
Cebu III Transmission (100 MVA Quiot SS) Leyte-Samar Reinforcement Project Negros V Transmission Line Negros-Panay Interconnection Uprating
T T T T
138 kV ACSR/AS Transmission Line Naga Substation-Ginatilan, Ginatilan-Suba CTS, Amlan-Pundol CTS 69 kV ACSR/AS Transmission Line Suba CTS-Alcoy CTS, Amlan (Expansion), Old Naga (Salcon), New Suba and New Pundol CTS Bus-in (Naga-Banilad) Pardo and Quiot S/S Ormoc Substation San Carlos Guihulngan Bacolod-Talisay Talisay-E.B. Magalona CTS San Juan CTS-Dingle S/S San Juan-Tap Dingle Barotac Viejo Bacolod (Expansion) Dingle (Expansion) E.B. Magalona Switching Station San Juan Substation (New) San Juan E.B. Magalona CTS
Substantially completed. Final T&C of the SC and CTS could only be done in time for the energization of Sched II-T/L & S/S portion On-going 58.5% completed
Apr 2008
Energized 9 Nov. 2007 ETC: Nov. 2007 On-gong preparation of Tender Documents for erection contract Technical Evaluation Report for BAC Review
Dec 2007 Nov 2007 Dec 2008 Jun 2008
* T Transmission Asset ST Sub-transmission Asset C Connection Asset

Name of Project Visayas Ongoing projects Northern Panay Backbone Project Capex Type * Project Component Status Expected Time of Completion
Visayas Capacitor Project-1
Wright-Calbayog Transmission Line
Panitan-Nabas Nabas S/S Cut-in to Nabas-Culasi 69 kV T/L Nabas S/S (New) Panitan S/S (exp) Installation of 138 kV Capacitors banks in Sibonga, Alcoy, Medellin, Hamtic, Guilhungan, Binalbagan, San Enrique, Sibalom, Tolosa, MacArthur, Catarman, Taft and Borongan Wright-Calbayog 69 kV tie line Wright S/S Calbayog S/S Ormoc-Babangon-Wright Installation/construction of 110 km of 138 kV overhead T/L and installation of 150 MVA power transformers in two new substations: Corella and Tubigon. Termination point for Cebu-Negros uprating. Replacement of old PCBs. Installation/construction of 112 km of 138 kV and 69 kV overhead TL.
Jun 2009
L/C effective 13 Sept. 2007. Completion of S&D June 2008
Dec 2008
For re-bid. Change of source of fund
Dec 2008
Projects for Implementation Bohol Backbone Transmission Project
Jan 2010
New Naga Substation Visayas Power Circuit Breaker Replacement Program Southern Panay Backbone Transmission Project MINDANAO Ongoing Projects Abaga-Kirahon 230 kV Transmission Line
T T T
Jan 2010 Jul 2010 Mar 2010
Gen. Santos-Tacurong Transmission Kirahon-Maramag 230 kV Transmission Line Maramag-Bunawan 230 kV Transmission Line
T T
Mindanao Substation Expansion 2005 * T Transmission Asset ST Sub-transmission Asset C Connection Asset
Abaga-Kirahon Kirahon Substation (new) Abaga Substation Kirahon Control Center Gen. Santos-Tacurong Gen. Santos-Substation Tacurong Substation 108-km. 230 kV, double circuit, steel tower, 2-795 MCM transmission project Maramag-Bunawan Maramag 69 kV Tie Line Maramag S/S (new) Bunawan S/S (exp) Tagoloan S/S (exp) Installation of additional transformers at Sta. Clara, Kibawe S/S, Butuan S/S, Buslig S/S, New Loon S/S and Tindalo S/S
Jun 2008
Jun 2008
Jun 2009 Jun 2009
Delivery of materials in progress
15 Nov 2008
39
stability of the nationwide transmission system, in accordance with the requirements of the Philippine Grid Code. Adopting the overall energy demand supply outlook as contained in the Reference Plan (2006 PEP Update), this years TDP will only focus on updates of the projects identified in the ERCs Final Determination of the list of projects that will fall within the capital expenditure (CAPEX) forecast.
It can be noted that on 13 June 2006, the ERC issued the Final Determination on TransCo Regulatory Reset for 2006-2010. It resolved the applications of TransCo and PSALM, in accordance with the Transmission Wheeling Rate Guidelines (TWRG), the proposed Maximum Allowable Revenue (MAR) for the Second Regulatory Period. A significant portion of the MAR consists of the CAPEX projects based on the 2005 TDP.

Name of Project Mindanao Ongoing Projects Mindanao Subtransmission Line San Francisco 138 kV Substation Project Capex Type * Project Component Status Expected Time of Completion
ST T
Zamboanga City 138 kV Transmission Line Projects for Implementation Aurora-Polanco 138 kV Transmission Line Mindanao Mobile Transformer Project Mindanao Reliability Compliance Project (Phase 1) Mindanao Power Circuit Breaker Replacement Program * T Transmission Asset ST Sub-transmission Asset C Connection Asset
69 kV lines Maco-Tap (Maco-Mati) and KM 13-Surigao City 138 kV San Francisco Substation Cut-In point (Butuan-Bislig line) 69 kV San Francisco Substation-San Francisco Load end San Francisco Substation (new) Sangali-Pitogo Pitogo Substation (new) Sangali Substation Construction of 138 kV Aurora-Polanco line. Provision of mobile N-1 contingency. Provision of N-1 security to Mindanao substations. Replacement of old PCBs
Dec 2007 May 2008
Failed bidding Construction on-going ETC: Jan 2008
Aug 2008
T T T T
Jun 2009 Jul 2009 Jul 2012 Jul 2010
Several transmission projects were completed in 2006 to include the San Roque Associated Transmission Line and Substation Project and Panay-Boracay 69 kV Interconnection Project. The San Roque Project which will transport power from San Roque Hydro Power Plant to San Manuel Substation involves the construction of approximately 10 kms, 230 kV, 2 x 795 MCM ACSR steel tower, double circuit transmission line. The PanayBoracay project, on the other hand, is an additional submarine cable with higher capacity to link Boracay to Panay Island. This project is Phase 1 of the Small Island Submarine Interconnection Development (SISID) Project. It is also considered the initial groundwork of the Boracay-Tablas-Romblon-Interconnection Project, another phase of the SISID Program. In addition, the Batangas S/S (Upgrade) component of the Batangas Transmission Reinforcement Project was also completed in May 2006.
in terms of the objectives set out in the law. The privatization process of the NPC assets has gained momentum. The DOE and its attached agencies were able to complete major reforms from the separation of the generation, transmission, distribution and supply functions to the establishment of the WESM. To date, the remaining task that will redound to full benefits of the EPIRA is the implementation of Open Access and Retail Competition, which is still subject to the privatization condition under Section 31 of the Act.
PRIVATIZATION OF NPC ASSETS

Privatization of Generation Assets
As of July 2007, the government has successfully bid out and turned over eight hydroelectric plants to private owners and one large coal power plant for a total of nine generating plants. Six of the plants sold were in Luzon and Visayas with a combined capacity of 1,075.4 MW, which put the privatization level at 24.8 percent. Meanwhile, the government is determined to further raise the level of privatization and immediately implement open access and retail competition. The target is to reach 50.0 percent level of privatization by end of 2007 with the scheduled bidding of Calaca Coal Fired Power Plant in October and Ambuklao-

Several projects, as shown in Table 21, are linedup for implementation to boost the systems efficiency and reliability.
B. EPIRA DEVELOPMENTS
Six years after the enactment of EPIRA, the energy sector achieved appreciable gains in its implementation
Table 22. PRIVATIZED NPC ASSETS

Power Plant Talomo Hydro* Agusan Hydro* Barit Hydro Cawayan Hydro Loboc Hydro Pantabangan-Masiway Magat Masinloc Total Location Davao del Sur Bukidnon Camarines Sur Sorsogon Bohol Nueva Ecija Isabela Zambales Capacity (MW) 3.5 1.6 1.8 0.4 1.2 112.0 360.0 600.0 1,075.4 Date of Bidding 25 Mar 2004 04 Jun 2004 25 Jun 2004 30 Sep 2004 10 Nov 2004 09 Nov 2006 14 Dec 2006 26 Jul 2007 24.8% Winning Price Winning Bidder (in Million USD) 1,370 HEDCOR 1,528 First General Holdings 480 410 1,420 129,000 530,000 930,000 1,594,210 Atty Ramon I. Constancio Sorsogon Electric Cooperative II (SORECO II) Sta. Clara International Corporation First Gas Hydropower Corporation SN Aboitiz Power Corporation Masinloc Power AES
* Not included in the 70.0 percent privatization level target as a requirement to implement open access and retail competition Source: PSALM
Binga Hydro Power Plants in November.17 Other power plants are also scheduled for bidding, namely: Manila Thermal Plant, the Palinpinon Geothermal Plant in Negros and the Panay Diesel Plant in Dingle, Iloilo. Table 22 shows the privatized NPC power plants.
contracted energy output of NPC/PSALM IPP contracts. The IPPA process is part of a broader plan to privatize both the generation and transmission assets, and to bring competition into the supply market through an Open Access mechanism. Since the WESM commenced its operation in June 2006, PSALM has effectively been acting as the interim IPPA by bidding out the NPC/PSALM IPPs energy output in the spot market on a day-to-day basis. PSALM initially split the IPPs into four trading teams to manage them, but were subsequently reduced to three teams. Although the total megawatt capacity of the portfolios of said trading teams has increased, it is still below the 30.0 percent threshold capacity of the Luzon grid as stipulated in the EPIRA. The World Bank grant, through the Policy on Human Resources and Development (PHRD), has enabled the DOE to facilitate the Technical Assistance (TA) on the Appointment of IPPAs and Energy Trading for both NPC and PSALM. The objective of the TA is to advise the IPPATechnical Working Group (IPPA-TWG) on the structure, contract terms and the process on the appointment of IPPAs. The IPPA-TWG was created by the DOE with NPC and PSALM as members. The IPPA Advisor has commenced work for the IPPA in April 2007. Its task is to review the following proposed approaches for the administration and management of the contracted energy by the IPPA:
Privatization of Transmission Assets

After two unsuccessful bids in 2003, PSALM issued a public notice for the third round of bid for the TransCo business on 28 May 2006. The government declared the bidding for the TransCo 25-year concession a failure after only one investor group submitted a bid. The government carefully studied the concerns raised by investors and considered these in the review of the privatization structure. In June 2007, the government, through the PSALM Board, approved the structure and bidding package of TransCo. To promote greater investors interest in TransCo, the government embarked on a series of international road shows in July participated in by officials of PSALM, DOE, DOF, ERC and TransCo. The Invitation to Bid for TransCo was published on 23-25 July 2007 in major newspapers, in time for the fourth round of bidding targeted on 12 December 2007. In August 2007, 21 parties had shown interest to bid for the transmission business.18
Review and Renegotiation of the IPP Contracts

PSALM was mandated under the EPIRA to competitively select and appoint qualified independent entities called the Independent Power Producer Administrators (IPPAs) to administer and manage the
Agency Approach This specifies that payment and financial risks remain with the NPC/ PSALM while NPC remains the contract party. Ownership Approach This purports to create integrated supply companies to compete with current players in the energy market.
17
41
18
Calaca and Ambuklao-Binga power plants were bid out on 16 October and 28 November 2007, respectively, increasing the privatization level as of end-2007 to 42.7 percent. TransCo concession was awarded to Monte Oro Grid on 12 December 2007
Universal Charge (UC)

Pursuant to Section 34 of the EPIRA, PSALM administers the fund collections from the UC, which should be disbursed in an open and transparent manner and for the purposes specified in the law. The UC is a non-by-passable charge collected from all end-users every month by the distribution utilities, TransCo, and supplier based on the approval made by the ERC. Total collections/remittances as of September 2007 amounted to PhP 7.43 billion, out of which PSALM disbursed PhP 7.15 billion from the Special Trust Fund (STF) for the environmental charges of NPC and for the missionary electrification of NPC-Strategic Power Utilities Group (SPUG) in accordance with the provisions of EPIRA. Table 23 shows the UC remittances and disbursements. Removal of crosssubsidies. To date, all 120 ECs have already implemented crosssubsidy removal in electricity pricing in various phases: 50.0 percent-60.0 percent removal, 40.0 percent-60.0 percent removal, complete removal, 2/3 removal, 1/3 removal and 1/4 removal. There are 51 ECs that have completely removed interclass cross subsidy, while the remaining 69 ECs are still in various phases of cross-subsidy removal schemes. Provision of Lifeline Rates. As a socialized pricing mechanism, lifeline rate is given to low-income captive electricity end-users. The rate is largely based on the consumer profile of EC coverage area and the efficiency of operations of the concerned distribution utilities (DUs). ERC has approved the lifeline rates for 127 of the 139 DUs in March 2007.
Particulars Special Trust Fund- Missionary Electrication Special Trust Fund-Environmental Charge Main Trust Account Universal Charge Total Source: PSALM
Remittances 6,955.67 469.23 3.20 7,428.01
Disbursements 6,901.70 251.92 7,153.62
Balances 53.97 217.31 3.19 274.46
Table 24. STATUS OF LOAN CONDONATION, as of 31 March 2007

Type of Creditor NEA LGU/OGA Creditor Total Amount Condoned Total Payment (In Million PhP) (In Million PhP) 17,977.95 6,067.78* 85.21 76.57* 18,063.16 6,144.35 Outstanding Balance (In Million PhP) 11,910.17 4.92 11,915.09 Percent of loans paid 34 90 34
* Includes the discount by Palawan Provincial Government in the amount of PhP 3,725,000.97 Source: PSALM
Condonation of Loans of Electric Cooperatives. As of March 2007, PSALM has paid a total of PhP 6.14 billion worth of financial obligations of ECs to NEA, local government units and other government agencies (Table 24). Of the PhP 6.07 billion total payments to NEA, about PhP 4.56 billion, or 75.0 percent, was used to pay for the rural electrification loans incurred by the ECs. On the other hand, 15.6 percent was utilized to pay for the mini-hydro projects, 9.2 percent for the dendro thermal project and 0.1 percent paid for house wiring services.
Those customers that have not yet registered in the WESM are supplied either through bilateral power supply contracts with generators, or through the default wholesale supply arrangement with NPC and PSALM.
Highlights of Luzon Commercial Operations

Highest peak demand was registered in May 2007 at 6,590 MW while average demand was at the lowest in November 2006 at 3,242 MW. As for the energy offered by participating generators to WESM, average energy offers were at their lowest in January and March 2007. Tight supply condition during these months was due to outages of generating plants, unavailability of certain generating plants because of fuel constraints, line limitations and declining offers from hydroelectric plants caused by low water levels. With tight supply margin, actual manual load dropping was experienced in April 2007. Effective Settlement Prices in the WESM were relatively high from April to June 2007 as high levels of demand coupled with thin supply margins were likewise experienced. In addition, the dispatch of more expensive diesel and oil generating plants increased during those months to make up for the unavailability of some coal-fired plants and low hydro levels, which
WESM
Implementation of WESM in Luzon
WESMs first year of operation in Luzon went through smoothly albeit some market flaws, which revealed what needs to be done in order to achieve the very purpose of its establishment, i.e. promote competition, improve the performance of the electricity spot market, particularly on the aspect of fair competition and prevent any market power exercise. As of October 2007, the participants that have registered in WESM-Luzon are listed in Table 25.
TRANSPARENCY OF ELECTRICITY RATES
Table 23. STATUS OF UNIVERSAL CHARGE REMITTANCES & DISBURSEMENTS, as of 30 September 2007 (Million PhP)
triggered the spot prices to escalate. The highest effective settlement price was recorded in December 2006 (Table 26). Power supply in Luzon is mostly covered by bilateral power supply contracts quantities (the BCQ), with spot market purchases accounting for only about 15.0 to 20.0 percent of the total energy consumption.
Table 25. WESM REGISTRATION (PhP/MWh)

Participant Classication Generators 1. NPC -Owned (Trading Teams) 2. PSALM (NPC-IPPs) (Trading Teams) 3.First Gas Power Corporation 4. FGP Corp 5. Quezon Power Philippines (Limited) Company 6.First Gen Hydro Power Corporation 7. SN Aboitiz Power Corp. Inc 8.Other IPPs Customers 1. Private Distribution Utilities 2. Rural Electric Cooperatives - direct members 3. Other Utilities Generators 1. Global Business Power Corp. 2. National Power Corporation 3. PSALM (Unied Leyte) 4. PNOC-EDC Customers 1. Private Distribution Utilities 2. Rural Electric Cooperatives Source: PEMC Number 22 7 3 1 1 1 1 1 7 11 45 108 13 1 10 1 1 4 31 Registered 22 7 3 1 1 1 1 1 7 3 3 0 11 1 8 1 1 4 15 MW 11,546.00 2,546.00 6,231.00 1,038.00 504.00 460.00 112.00 360.00 295.00 4684.90 136.64 1,695.00 136.00 919.20 590.60 49.00 388.92 388.78
Visayas Trial Operations Program

The Philippine Electricity Market Corp. (PEMC) plans to integrate the WESM in Luzon with its Visayas counterpart within the first half of 2007. As of November 2007, PEMC had registered a total of 37 trading participants. Of these, 14 are generators, while 23 are customers classified into distribution utilities, rural electric cooperatives, and industrial and commercial customers. Since March 2006, PEMC has been conducting a series of Trial Operation Program (TOP) among the trading participants in the Visayas. This is a series of highlevel Market Operations Scenario Tests (MOST) that are performed in different phases and are intended to fully test the functionality of Market Management System (MMS) in the region. TOP aims to assess the capabilities and readiness of power industry stakeholders in terms of the electricity market rules, procedures and processes through their participation in a live environment prior to the commencement of WESM commercial operations in the Visayas region. The integration of Visayas market has been envisioned to help find a solution to an impending power supply problem in the region. It is anticipated that investors would come in to build new power plants and add new capacity to the Visayas grid. PEMC will conduct live dispatch operation from 11 January 2008 to test submission
Table 26. EFFECTIVE SETTLEMENT PRICES (PhP/MWh)

Effective Settlement Prices Billing Month Jul 2006 Aug 2006 Sep 2006 Oct 2006 Nov 2006 Dec 2006 Jan 2006 Feb 2006 Mar 2006 Apr 2007 May 2007 Jun 2007 With Surplus 3,164.75 3,647.75 4,129.05 (5,878)* 4,159.09 (7,835)* 5,860.99 8,760.88 3,828.58 4,830.51 5,472.20 8,622.85 6,640.40 6,287.75 Without Surplus 3,094.12 3,577.67 4,129.05 4,159.09 5,746.92 8,731.92 3,791.67 4,810.36 5,370.34 8,592.97 6,484.51 6.031.63 Cumulative Average 3,152 3,373 3,624 3,750 4,115 4,542 4,481 4,501 4,560 4,871 4,962 5,062
Source: PEMC Market Operation (MO) * Unadjusted Prices
of offers, processing of offers, demand forecasting, system status reporting, dispatch implementation and dispatch reporting.
ERC Regulatory Filings

Approval of the Pricing and Cost Recovery Mechanism for Reserves in the Philippine Wholesale Electricity Spot Market. PEMC has already filed its application to ERC for the approval of the pricing and cost recovery mechanism (PCRM) for reserves.
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PCRM provides details of the formulation and procedures by which reserve dispatch schedules and zonal reserve prices for each reserve region are calculated in the Market Dispatch Optimization Model and which are already set forth in the approved WESM Price Determination Methodology (PDM). On 24 May 2007, PEMC submitted its Formal Offer of Evidence for such pricing and cost recovery mechanism. The decision on this application is still pending with ERC for consideration.
Table 27. METERED QUANTITIES: ENERGY CONSUMPTION

Billing Month Jul 2006 Aug 2006 Sep 2006 Oct 2006 Nov 2006 Dec 2006 Jan 2006 Feb 2006 Mar 2006 Apr 2007 May 2007 Jun 2007 Metered Quantity (Load), MWh 3,094,164.95 3,147,800.36 3,314,855.13 2,873,285.25 3,234,958.03 2,972,091.65 3,035,805.04 3,102,610.89 2,980,658.77 3,407,504.68 3,460,944.49 3,561,655.99 Spot Quantity, MWh 1,355,434.37 1,159,428.23 1,291,334.84 1,224,467.60 1,069,288.10 519,152.06 589,925.05 510,281.30 536,155.65 698,602.96 503,878.03 805,535.91 % 44 37 39 43 35 18 19 16 18 21 15 23 Bilateral Contract Quantity (BCQ), MWh 1,738,730.58 1,988,372.13 2,023,520.30 1,648,817.65 2,165,669.93 2,452,939.59 2,445,879.99 2,592,329.59 2,444,503.12 2,708,901.72 2,957,066.46 2,756,120.08 % 56 63 61 57 65 82 81 84 82 79 85 77
Source: PEMC-MO
Table 28. AVERAGE ENERGY OFFERS (MW)

Billing Month Jul 2006 Aug 2006 Sep 2006 Oct 2006 Nov 2006 Dec 2006 Jan 2006 Feb 2006 Mar 2006 Apr 2007 May 2007 Jun 2007 Source: PEMC Peak Demand 6,111 5,888 6,113 5,895 5,894 5,869 5,739 6,021 6,108 6,559 6,590 6,547 Coincidental Energy Offers 7,185 5,950 6,705 6,653 5,808 5,925 5,794 5,965 5,747 6,268 6,831 6,308 Average Demand 4,743 4,604 4,882 4,624 3,242 4,467 4,412 4,513 4,848 4,991 5,249 5,187 Average Energy Offers 5,757 5,832 6,407 5,527 5,526 5,092 5,211 5,333 5,294 5,284 5,766 5,631 Capacity on Outage 2,634 2,094 1,743 1,866 2,223 3,188 1,815 1,737 1,846 1,769 770 1,137
Aside from said committees, the Market Assessment Group (MAG) and the Enforcement and Compliance Offices (ECO) of PEMC were likewise established to be directly involved in the WESM governance. MAG, together with ECO and MSC, undertakes the monitoring and assessment of market outcomes and behaviors pursuant to the WESM Rules and the Market Surveillance, Enforcement and Compliance Market Manual.
Way Forward
The DOE is working on the most facilitative institutional arrangement among the energy sector agencies to address the multi-challenges facing the implementation of the EPIRA. The ultimate objective is to harmonize efforts for a better electricity market that would effectively cater to various demand sectors, and at the same time achieve the overall national development goal of globally competitive power industry/market.
Table 29. WESM GOVERNANCE COMMITTEES

WESM Committees Market Surveillance Committee (MSC) Rules Change Committee Dispute Resolution Group / Dispute Resolution Administrator Technical Committee Philippine Electricity Market (PEM) Audit Source: PEMC Number of Members Required 5 15 8 5 3 Current Number of Members 4 12 5 4 2
C. EXPANDED RURAL ELECTRIFICATION
Price Determination Methodology Compliances and Other Directives. In relation to PDM, which was approved in June 2006, the ERC has directed PEMC and other WESM participants to submit their proposed methodology for compensation and settlement of generators whose plants are dispatched by the System Operator as must-run units (MRUs). MRUs are dispatched by the System Operator to address various system security and reliability considerations. PDM intends to provide the market
participants with specific principles by which energy in WESM will be priced including the computational formula to enable them to verify the correctness of the charges being imposed. PEMC Governance. The WESM rules provide for the creation of five WESM Committees as shown in Table 29. All committees under WESM were established with the latest appointments of new members
Over the past two decades, rural electrification has always been one of the governments priority thrusts. As one of the Ten-Point Legacy Agenda of the Arroyo administration, the DOE has instituted the Expanded Rural Electrification (ER) Program to coordinate and integrate all efforts on rural electrification being undertaken by the government and
in April 2007: MSC with one, Technical Committee with four and the PEM Audit with two.
the private sector. The goal is to attain 100 percent barangay electrification by 2008.19
Table 30. STATUS OF ELECTRIFICATION BY ISLAND GRID, as of 31 July 2007

Luzon Visayas Mindanao Total Target 20,488 11,443 10,049 41,980 Energized 19,933 11,105 9,048 40,086 % Energization 97.29 97.05 90.04 95.49 Balance 555 338 1,001 1,894
The countrys total electrification level as of 31 July 2007 stood at 95.5 percent having electrified 40,086 out of the total 41,980 barangays.20 This leaves a total of 1,894 barangays still to be energized until 2008. Among the countrys major islands, Luzon has the highest electrification level at 97.3 percent. The remaining 555 unelectrified barangays are mostly found in Regions II, IV-B and V. The island of Visayas achieved 97.0 percent electrification level from 96.8 percent in 2006. The 338 remaining unelectrified barangays are mostly found in Region VIII, particularly in the province of Samar. Meanwhile, the electrification level in Mindanao increased to 90.0 percent from 89.0 percent in 2006. The 1,001 remaining unelectrified barangays are located in Regions IX, X and ARMM. Table 31 highlights the electrification level of the different regions in the country. NCR has achieved 100 percent electrification level while ARMM has only 76.0 percent electrification level, the lowest among the regions. Other regions with low electrification levels include IV-B, V, VIII, IX and XII. In terms of franchise area, the ECs were able to energize an accumulated 95.0 percent of its coverage areas with a remaining balance of 1,795 barangays. On the other hand, Meralco which is the countrys largest distribution utility, is only short of 63 barangays to energize within its franchise areas registering an accumulated total of 98.5 percent as of end of 31 July 2007. Meanwhile, the private-investor owned utilities as well as local government units have 36 remaining barangays to be energized. On the other hand, around 3,200.46 ckt.-kms of distribution lines and 10 MVA of substation capacities were installed in 2006. A total of 550.67 ckt.-kms of distribution lines were also rehabilitated and upgraded to enhance the delivery of electricity particularly in remote areas nationwide. ER Program. The reconstituted ER Program is an integration of efforts of both government and the private sector on rural electrification. The Program also aims to develop innovative and sustainable policies and strategies on rural electrification consistent with the EPIRA provisions. From the public sector, the implementers
19
Note: Total number of barangays is based on 2005 NCSO
Table 31. ELECTRIFICATION LEVEL BY REGION, as of 31 July 2007

Region Potential Barangays Electried/ Completed Barangays 1,694 Unelectried Barangays 54 1 92 10 66 107 225 42 4 292 180 102 5 91 592 31 1,894 Electrication Level (%) 100.00 95.41 99.97 96.02 99.68 98.35 92.66 93.52 98.96 99.87 93.35 90.55 94.95 99.57 92.38 75.94 97.63 95.49
1,694 NCR North Luzon Agribusiness 1,176 1,122 CAR 3,265 3,264 I 2,311 2,219 II Metro Luzon Urban Beltway 3,102 3,092 III 4,012 3,946 IV-A 1,457 1,350 IV-B Central Philippines 3,471 V 4,050 VI 3,003 VII 4,390 VIII Mindanao Agribusiness 1,904 IX 2,020 X 1,160 XI 1,194 XII 2,461 ARMM 1,310 CARAGA 41,980 Total 3,246 4,008 2,999 4,098 1,724 1,918 1,155 1,103 1,869 1,279 40,086
Table 32. ELECTRIFICATION BY FRANCHISE HOLDER, as of 31 July 2007

Francise Holder ECs MERALCO PIOUs/LGUs/ Others Total Coverage 36,030 4,322 1,628 41,980 Energized % Energization 34,235 4,259 1,592 40,086 95.02 98.54 97.79 95.49 Balance 1,795 63 36 1,894
include the DOE and its attached agencies primarily NEA, NPC-SPUG, PNOC and its Energy Development Corporation subsidiary. Among the private sector partners are Mirant Philippines, KEPCO, PowerSource, CalEn, Luzon Hydro, San Roque Power Corporation and other IPPs and donor agencies such as the World Bank, USAID, Spanish Protocol and Filipino-French Protocol. Public Sector Initiative. The public sector efforts in attaining 100 percent barangay electrification by 2008 are consolidated and integrated under the ER Program.
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20
In the Talakayang Barangay held in Bohol last 23 August 2007, President Gloria Macapagal Arroyo announced that the target of 100 percent barangay electrification has been moved to 2009. As of end-2007, total barangay electrification level stood at 96.6 percent
The DOE is using the electrification fund component of E.R. 1-94 (financial benefits to host communities following the radiating order i.e. based on proximity to the contributing power plant/s) for on-grid and offgrid electrification to make electricity accessible to more communities. Government subsidy is also being offered especially on the use of renewable energybased facility to electrify communities in remote areas. Further, to augment the ER Program, the DOE is currently pursuing the energization of the 211 priority barangays of President Gloria Macapagal-Arroyo. Meanwhile, the NEA has been mandated to extend technical, financial and institutional assistance to the ECs to improve the delivery of electricity in their respective franchise areas. The PNOC-EDC, on the other hand, has been offering advanced financial assistance for electrification in areas where their geothermal fields are located such as in Negros Island and the Bicol Region. Private Sector Initiative. The IPPs are also committed to assist the DOE in its electrification program. The IPPs support the program through the provision of advance financing for electrification projects and the Adopt-a-Barangay scheme. Mirant and KEPCO both committed to energize a number of barangays throughout the country. To date, Mirant has 184 remaining barangays to be electrified in 2007, from the total commitment of 1,500 barangays since 2000. On the other hand, KEPCO has a total commitment of 500 barangays to be energized. Of the total, 200 barangays will be energized in 2007, of which not less than 40 sitios or 20 barangays in Cebu have been energized. The participation of Qualified Third Party (QTP) in the electrification program is stipulated in the EPIRA under Section 59 and Rule 14 of its IRR, which requires the QTP to engage in providing electricity service to unviable and remote areas that are not covered and reached by franchise utilities. To complement the D.C.s D.C. 2004-06-006 and D.C. 2005-012011 which prescribe the qualification criteria and guidelines for QTP participation issued by DOE, the ERC through its Resolution No. 22, Series of 2006, has set the rules for the regulation of QTPs performing missionary electrification in areas declared unviable by DOE. To date, the two pilot QTPs involved in the rural electrification program are PowerSource Philippines in Palawan and Paris-Manila Technology Corporation, Inc. (PAMATEC) in Masbate. The DOE is also assisting both firms in filing its application as QTP to ERC. The Philippine Rural Electrification Service (PRES) Project, which commenced in January 2007, is directed towards providing the residents of Masbate adequate and reliable energy services. Around 18,000 households in 128 barangays will benefit from the said project
which is being proposed for possible funding under the French-Filipino Loan Protocol. The project financing amounts to around Euro 17.5 million. Other concerns of the project include: lighting for barangay halls and school buildings, provision of vaccine refrigerators, lighting for rural health units, and provision of streetlights to major thoroughfares. Marketing activities to identify the potential 18,000 households was done in the first half of 2007. Ongoing activities are the survey on the socio-economic profile of households and the staking of the barangays for the mini-grid system. The Sustainable Solar Market Package (SSMP) under the Rural Power Project (RPP) was designed to solicit private sector participation in the governments electrification program. It is also being used in Project ACCESS or Accelerating Community Energy Systems Using Solar, a new component of RPP. The SSMP, which clusters barangays into viable packages, is an ingenious approach towards addressing the availability of electricity in remote rural areas. Under the SSMP, PV systems will be supplied and installed in key public facilities and commercially marketed to a limited number of households within a given period (e.g. 30 systems or 25.0 percent of barangay households, whichever is larger within 12 months). To ensure the installation of PV systems in public facilities, funds would be made available through DOE and NPC-SPUG, as well as from the IPPs and donor agencies. Currently, the SSMP is being pursued in 76 barangays in Aklan, Masbate, Northern Samar, Palawan, Zamboanga del Norte, Zamboanga del Sur and Iligan City. To date, the installation of solar PV systems in 21 barangays in Zamboanga del Norte and Zamboanga del Sur and two barangays in Iligan City have been completed. The SSMP Operator is expected to complete the marketing activities for household sales by June 2008 in subject barangays. Also, the DOE in partnership with the private sector has undertaken preparatory activities for the scale up of SSMP projects, which is expected to energize around 500 barangays nationwide.
Ceremonial switch-on of Masbate PRES Project held on 03 May 2007 in Malacaang Palace. Present in the photo are (R to L): DOE Undersecretary Melinda L. Ocampo, PAMATEC President and CEO Hubert dAboville, Former DOE Secretary Raphael PM. Lotilla, ETDEs Philip Sauvier and the representatives from the French Embassy.
Aside from the SSMP, the New Power Provider (NPP) Program will also encourage private sector participation in NPC-SPUG areas. The NPP program enables the private sector to take over the supply of electricity to any existing NPC-SPUG area, either through outright purchase or lease of existing NPCSPUG assets, and/or installation of new power generating facilities including associated power delivery systems. At present, there are 74 NPC-SPUG areas in the country. Of the 74 NPC-SPUG areas, 14 were offered to the private sector under the NPP Program. Eight out of the 14 offered areas were already awarded with their respective NPPs. These areas are in Mindoro, Marinduque, Palawan, Catanduanes, Masbate, Tablas, Romblon and Bantayan. Foreign-Assisted Projects. The RPP is a 14year project financed by the World Bank-Global Environment Facility (WB-GEF). The project, which has four phases, aims to increase access to electricity services and transform ECs into more viable and competitive commercial entities. The first phase of the project, which commenced in June 2004 to end in 2009 will have additional target of 10,000 new household connections. The DOE has accredited eight PV companies and a MOA has been executed with the said companies. Establishment of tie-ups with microfinance institutions (MFIs) and rural banks has also been carried out. Technical assistance is also being offered to support the private companies and MFIs. The Solar Power Technology Support (SPOTS) Project, which supports agrarian reform communities (ARCs), is a joint undertaking of DAR and DOE that started in 2003. It is a three year project funded by the Spanish government. The project introduced PV applications for agricultural and rural enterprises expecting to address poverty in unenergized and offgrid ARCs. The project is now on its second phase targeting 44 ARCs situated in far-flung unenergized barangays in Mindanao. The Alliance for Mindanao Off-Grid Renewable Energy (AMORE) Program - a joint undertaking of USAID, Mirant Philippines, ARMM, Winrock International and DOE - intends to energize conflictaffected and off-grid areas in Mindanao. To date, the project has energized 227 barangays using renewable energy systems. These are located in Sulu, Basilan, Tawi-Tawi, Maguindanao, Zamboanga Sibugay, Zamboanga del Sur, Sultan Kudarat, Davao City, and Zamboanga City. AMORE is completing the solar energy electrification in 148 conflict-affected areas in ARMM. Other activities/initiatives were likewise undertaken for the energized barangays under the said project, as follows:
agricultural products, seaweeds processing, drip irrigation for high value crops) to ensure sustainability of the installed renewable energy systems;
Distance and computer-aided education were made available to beneficiaries through partnership with other private companies; and Conducted organization and capacitybuilding training for members of the Barangay Renewable Energy and Community Development Associations (BRECDAs) to operate and maintain the systems, as well as sustain the socio-economic benefits extended to the community by the project.

The DOE, together with its attached agencies and private institutions is committed to energize 892 barangays in 2007 and 1,162 barangays in 2008 to attain the 100 percent total barangay electrification (Table 33).
Table 33. TIMETABLE OF ELECTRIFICATION REQUIREMENTS
Agency/Ofce NEA/ECs DOE DAR-SPOTS PNOC-EDC IPPs PRES PIOUs Total Energization Level, % 2007 301 125 9 29 395 32 1 892 98.00 2008 160 556 12 38 300 96 1,162 100.00 Total 461 681 21 67 695 128 1 2,054
For the energy sector to achieve total barangay electrification in 2008, it would require setting up of renewable energy systems in off-grid areas and expanding 4,548 ckt.-kms. of distribution lines until 2008. Likewise, an additional 2,173 MVA of substation capacities are also needed in grid areas. Around 8,779 ckt.-kms. of distribution lines will be rehabilitated in order to deliver a reliable and efficient supply of electricity until the targeted year (Table 34). As a way forward, the governments rural electrification program not only envisions total barangay electrification by 2008 but also intends to realize 90.0 percent household connections by 2017. Attaining the targeted 90.0 percent household connection would necessitate the expansion of 4,716 ckt.-kms of distribution lines from 2009 until the end of the planning period, as well as the putting up of 2,804 MVA of substation capacities. Meanwhile, about 10,126 ckt.-kms. of distribution lines will be
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Demonstrations and training projects on the productive and social uses of renewable energy systems (i.e., crop drying, milling of
Table 34. PROJECTED INFRASTRUCTURE REQUIREMENTS

Expansion Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Total Distribution Lines (ckt.-kms) 3,523 2,484 2,064 1,206 1,136 501 542 460 447 424 12,788 Substations (MVA) 1,377 864 1,309 512 1,264 260 155 248 215 150 6,354 Line Rehabilitation (ckt.-kms.) 4,174 4,372 4,407 4,420 4,056 409 422 301 228 290 23,080
D. BENEFITS TO HOST COMMUNITIES

The DOE has continuously extended benefits to communities hosting energy generating projects through E.R. 1-94 as provided in Section 5 (i) of R.A. 7638 or the Department of Energy Act of 1992. Under E.R. 1-94, host communities are entitled to both financial and non-financial benefits from energy generating companies to support their community development and livelihood programs, among others.
Table 35. SUMMARY OF APPROVED BENEFITS TO HOST COMMUNITIES PER PROJECT TYPE
2006 Fund Type EF DLF RWMHEEF Total No. of projects 297 80 77 454 (Million PhP) 229.67 175.70 129.55 534.92 2007 (as of July 31) No. of projects 99 41 56 196 (Million PhP) 118.23 46.62 88.96 253.81
rehabilitated to ensure efficient and reliable supply of electricity to every household.
Encouraging more private sector participation in rural electrification, particularly in those areas/ barangays not covered by ECs electrification program. Cost of acquiring information and data on the geographic location of remaining unelectrified barangays. Such information will aid in determining appropriate electrification solutions to the target barangays. Exploring innovative strategies to deliver electricity services in the remote areas, in particular, areas that are untenable due to peace and order situation, inaccessibility, and low population density.
Host communities can draw funds from E.R. 1-94 upon submission of proposed projects in any of the following: electrification fund (EF), development and livelihood fund (DLF), and reforestation, watershed management, health, and/or environment enhancement fund (RWMHEEF). Aside from financial benefits, the non-monetary entitlements include preference for employment, training and skills development, priority in load dispatch, procurement of local supplies, and environmental management.
Action Plan
Strengthen and establish more partnerships with other potential partners such as NGOs and private institutions to fast-track electrification activities in highly remote barangays. Address the issues on disbursements, funds availability and any legal impediments to a partnership or joint undertaking for rural electrification projects/programs. Formulate a special implementation strategy and subsidy scheme for the remaining unelectrified barangays in Mindanao. Such could be implemented through the inclusion of social preparation fund in the total project cost, as well as creating partnerships or linkages between and among the relevant government agencies including LGUs, NGOs, and private institutions.
As of December 2006, the DOE approved a total of 454 projects equivalent to PhP 534.92 million. From these projects, there were 297 financed under EF amounting to PhP 229.67 million. The EF projects benefited a total of 111 barangays, 239 sitios, and 60 enhancement projects particularly in the provinces of Quezon, Laguna, Rizal, Northern Samar, Bukidnon, Lanao del Norte and Lanao del Sur. On the other hand, around 80 projects were approved under DLF and 77 projects for RWMHEEF with total project funds amounting to PhP 175.70 million and PhP129.55 million, respectively. Some of the projects implemented include infrastructure works such as access roads, school buildings, street lighting, water system facilities
Strengthen DOE collaboration with the private sector in addressing the accessibility problem of those barangays located in remote areas. The SSMP is being considered by the private sector as another approach to energize inaccessible barangays.
and the purchase of vehicles such as ambulances and dump trucks. About 196 projects equivalent to PhP 253.81 million were approved under E.R. 1-94 as of 31 July 2007. Of the 196 projects, 99 were electrification projects amounting to PhP 118.23 million. Around 97 barangays and 81 sitios from the provinces of Batangas, Cavite, Davao City, Laguna, North Cotabato, Pangasinan, Romblon, Quezon, and Zambales benefited from EF. Forty-one projects were approved for DLF amounting to PhP 46.62 million while RWMHEEF had 56 approved projects amounting to PhP 88.96 million. To ensure effective and timely implementation of projects, the DOE instituted project management measures such as the opening of trust funds for financial benefits accruing to host communities from the commercial operations of the various power plants nationwide. Initially, a total of 24 trust funds (EF, DLF, and RWMHEEF) covering eight power plants were opened in 2006. Moreover, 44 completed projects were physically inspected and assessed in 2006. Twenty of these projects are under DLF while the remaining 24 are under RWMHEEF. The DOE also conducted various IECs/consultations/briefings to host communities, including the new stakeholders/players under the E.R. 1-94 program.
guidelines to effectively ensure the provision of financial benefits to communities hosting small generation facilities.
Conduct regular public consultations, IEC campaigns and workshops with concerned stakeholders for the review of the amended E.R. 1-94 procedures and project implementation. Facilitate evaluation of LGU project proposals and releases of funds for project implementation. Conduct of seminar/workshop to enhance LGUs capability in the preparation of project proposals, project implementation and monitoring in collaboration with the power plant proponents/ owners. Review Rule 29 (A)21 of the EPIRA-IRR and institute corresponding amendments to make the program more responsive.
The effective implementation of E.R. 1-94 program is still constrained by the need to strengthen capacities of LGUs, particularly in the areas of project development planning, monitoring and evaluation. They also need to be equipped with skills on social preparedness and community organization. Meanwhile, frequent turnover in LGU leadership could also be mitigated with the continuing conduct of information dissemination on the merits of the program and adherence to its guidelines and procedures.
Action Plan
Similarly, the action plans adopted in the reference plan are likewise considered in this Plan Update, as follows:

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Complete inventory of all generation facilities in the country to ensure that benefits under E.R. 1-94 are extended to the host communities. Facilitate the establishment of the required trust funds through the execution of agreements between the DOE and generation facilities. Develop and adopt appropriate measures and
21
Rules for the Benefits to Host Communities Pursuant to Section 5 (i) of R.A. 7638 specifies the obligations of generation companies and energy resource developers to communities hosting energy generating projects.
V. Downstream Energy Industry

A. OIL INDUSTRY DEREGULATION
R.A. 8479 or the Downstream Oil Industry Deregulation Act of 1998 provides that the government liberalize and deregulate its downstream oil industry to ensure a truly competitive market under a regime of fair prices, level playing field, adequate and continuous supply of environmentally-clean and high-quality petroleum products. To this end, the government shall promote and encourage the entry of new participants in the downstream oil industry and introduce adequate measures to ensure the attainment of these goals. This is also within the Arroyo Administrations goal of leaving a legacy of successful government plans and programs to win the war against poverty. On the other hand, the DOE continually carries out close monitoring of oil industry activities, as well as the compliance of industry players to quality standards. stocks by the oil companies equivalent to 15 days for refiners and seven days for both bulk suppliers and LPG players. Importation. For 2006, crude import volume increased by only 0.5 percent vis--vis 2005 figure due to high levels of stocks and not much improvement in the countrys oil requirements. On the other hand, importation of finished petroleum products is almost at the same level with 2005. Forty-one percent of the countrys demand is imported as finished product. Refinery Production. Total crude oil processed by local refiners in 2006 was 2.6 percent lower compared to the previous years level. This may be attributed to the maintenance shutdown of several process units of refinery sometime within that year. Likewise, other process units were also closed due to power outages brought about by several typhoons that hit the country resulting in a decline of 1.8 percent in the local refinery capacity utilization. Further, 2006 local refinery production output slightly fell by 0.6 percent compared with the previous year.
Eight years after the implementation of R.A. 8479, a total of 627 players (1st half of 2007) are engaged in various activities in the oil industry such as marketing, distribution and storage of petroleum products. Total accumulated investment reached PhP 30.74 billion as of end 2006. Such investment has increased to PhP 31.69 billion in the first half of 2007. Improved investment is seen to provide additional jobs and greater accessibility to quality petroleum products.
Competition
The downstream oil industry has been experiencing a steady growth after its deregulation. New industry
Table 36. TOTAL NUMBER OF NEW PLAYERS PER ACTIVITY, 2006
Activity Liquid Fuel Bulk Marketing LPG Bulk Marketing Liquid Fuel Retail Marketing Bunkering Terminalling Total No. of New Players 83 10 506 18 5 622
Supply
Inventory. In 2006, actual industry inventory inclusive of stocks in-transit from the import sources averaged at a 59-day supply equivalent. This was eight percent lower than the 64-day average supply in 2005. Nonetheless, this was in conformance with DOE Circular No. 2003-03-002 which requires for a Minimum Inventory Requirement (MIR) of in-country
Downstream Energy Industry 50
Downstream Energy Industry
players engaged in different activities increased by 2.9 percent from 604 in 2005 to 622 in 2006. Likewise, total investments of independent players went up by 8.2 percent from the 2005 level of PhP 28.4 billion to PhP 30.74 billion in 2006. This is notwithstanding the decrease in their over-all market share from 15.2 Million Barrels (MMB) in 2005 to 13.6 MMB as of 2006. Similarly, their market share to total demand in the LPG sector also dropped from 44.5 percent in 2005 to 40.7 percent in 2006. This is due to the temporary shut down of operation of Nation Corporation, one of the LPG independent players, during the last quarter of 2006. In 2006, the industry recorded a total of 3,472 gasoline stations. This represents an additional 103 stations, which is equivalent to 3.0 percent increase from previous years 3,369. Among the Philippines three main island grids, Luzon has the most number of gasoline stations constructed by the new players. Table 37 shows the breakdown by three main island groups.
Table 37. NUMBER OF GASOLINE STATIONS, 2006
Region Luzon Visayas Mindanao Total No. of New Players 277 8 61 346 Total Industry 2,321 532 619 3,472
of Platts Singapore (MOPS) for petroleum products. Corresponding adjustments in domestic prices are estimated considering the movements in international benchmarks and the foreign exchange. The DOE-DOJ Task Force is convened as necessary to determine and rule on reports of suspicions on unreasonable rise in the domestic prices. In May 2006, as crude oil and petroleum products reached new record highs, E.O. No. 527 Temporarily Modifying the Rates of Import Duty on Crude Petroleum Oils and Refined Petroleum Products Under Section 104 of the Tariff and Custom Code of 1978 as Amended was issued to serve as a safety net against the volatility of the international market price of oil. The said E.O. provided for an automatic tariff cut based on international trigger price levels as agreed upon by the DOE, DOF/BOC and NEDA. On the basis of this E.O. likewise, the oil companies had reflected tarrif reduction for crude and finished petroleum products in the pump prices of diesel fuel sold to the public from June to November 2006. With the countrys strong currency, coupled with persuasion against one-time price changes, oil companies effected small incremental price adjustments. Further reductions were offered in 605 gasoline stations nationwide giving price discounts on diesel for public transport. In Metro Manila alone, there were 253 stations offering diesel price discount, while there were 278 stations in Luzon, 33 in the Visayas, and 41 in Mindanao.
Meanwhile, the country has a total storage capacity of 28.3 MMB (Table 38). To assist prospective investors, several big projects of the different players in the industry have been endorsed for registration and incentives availment with the Board of Investments (BOI).
Table 38. TOTAL COUNTRY STORAGE, 2006
Depots Majors Others Total Import/Export Terminals Subic-Olongapo* Clark-Pampanga SGEI-Tabangao, Batangas Total Renery (Crudes & Product) Petron-Limay, Bataan Shell-Tabangao, Batangas Total Total Storage * Includes the available capacity Number 72 59 131 1 1 1 3 Capacity (MB) 7,751 2,625 10,376 2,445 386 290 3,121 9,338 5,466 14, 804 28,301
Standards Formulation and Enforcement

Petroleum Products, Biofuels and Other Fuel Related Products. The DOE, through the Technical Committee on Petroleum Products and Additives (TCPPA), continues its standards-setting activities guided further by international/regional standards and trends on fuel and fuel-related products. The TCCPA was created pursuant to R.A. 8749 or the Clean Air Act (CAA) of 1999 to set quality standard for petroleum and other fuel-related products as mandated under the CAA, as well as for alternative fuels. Similarly, the Department spearheaded the development and formulation of quality specifications for alternative fuels from indigenous and renewable energy sources consistent with the countrys energy independence agenda and sustainable development.
Price
The DOE ensures the reasonableness of domestic prices of petroleum products through international price monitoring benchmarks, such as Dubai, Brent and West Texas Intermediate (WTI) for crude and Mean
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Conventional Fuels and other FuelRelated Products:
PNS/DOE QS 001:2005 Unleaded Motor Gasoline Specifications. This standard replaced PNS 1131:2002 (DOE 001:2002) which highlighted quality improvements such as the reduction of maximum sulfur content from 0.1percent for premium and 0.2 percent for regular grade to 0.005 percent mass for all grades in conformance with the sulfur limit of Euro II standard. PNS/DOE QS 006: 2005 Fuel Oils (Bunker) Specifications. This standard updated/reviewed PNS 21:1997 with no major revision made except on the test methods. Said standard retained the three grades based on sulfur content: BFO1, BFO2 and BFO 3. PNS/DOE QS 005:2005 Liquefied Petroleum (LP) Gases Specifications. This standard amended PNS 22:1990 to cover the use of LPG as a motor fuel in support of the governments effort to promote the utilization of alternative and clean technologies for the transport sector. Likewise, the standard improved the properties of LPG, not only as fuel but also for its other uses. DPNS/DOE QS 011:2006 Kerosene Specification (in progress). This draft standard is a proposed revision of PNS 32:1991 (kerosene specification).
PNS/DOE QS 002:2007 Coconut Methyl Ester (B100) Specification (Completed on the 2nd Quarter of 2007). This standard will supersede the first CME (PNS 2020:2003, B100) biodiesel specification. As an improvement to the previous standard, current specifications are harmonized with the European Standard for Biodiesel (EN 14214) and American Standard for Biodiesel (ASTM D6751). The standard is likewise harmonized with the recent biodiesel specification assessments conducted by Japan Automobile Manufacturers Association (JAMA) and the current Philippine studies and actual experiences on cocobiodiesel use. DPNS/DOE QS 010:2006 Jatropha (in progress). Still in the development stage, this will cover the use of jatropha as a potential biodiesel source.
Petroleum Processes and Facilities:
PNS/DOE FS 2:2006 LPG Refilling Plant Specifications. This standard covered the requirements for the construction, installation and operation of an LPG refilling plant including the associated bulk storage and tank farm facility with the exclusion of refrigerated storage tanks. PNS/DOE FS 3:2006 Auto-LPG Dispensing Stations. This standard is developed to address the emerging business of LPG used as an automotive fuel. This covers the requirements in the installation of an auto-LPG dispensing station for retail operation and garage-based sites, for onvehicle dispensing of LPG as automotive fuel for vehicles of any type. PNS/DOE FS 4:2007 Liquid Petroleum Product Depot (completed on the 1st Quarter 2007). The standard will address the technical requirements for facilities involved in the marketing and distribution of refined oils such as gasoline, diesel, kerosene and bunker fuel, to ensure product integrity. This will also provide for the safety of the workers, the community and protection of the environment.
Biofuels and its Blends:
PNS/DOE QS 008:2006 E-Gasoline (10.0 percent Ethanol-Gasoline Blend) Specification. This standard specified the chemical and physical requirements for bioethanolblended gasoline (E-Gasoline) with emphasis on the ethanol content at 9.5-10.0 percent volume ethanol blend and 3.5 percent oxygen content, maximum. PNS/DOE QS 007:2005 Anhydrous Bioethanol Fuel. This is a quality standard for fuel grade ethanol both pure (bioethanol with 99.3 percent purity), and denatured grade (fuel bioethanol with 96.9 percent purity at 2.0 percent ULG denaturant) for blending with gasoline for use as automotive spark-ignition engine fuel. DPNS/DOE QS 004:2007 Fatty Acid Methyl Ester (FAME)-Blended Diesel Oils. This standard will harmonize with quality improvements of conventional diesel and enactment
Level of Compliance / Enforcement Quality and Quantity Monitoring

Inspection of Facilities. The strict compliance of industry players to quality standards is consistently being monitored by the DOE through the conduct of regular/routine or on-the-spot and complaint-initiated
The following PNS were reviewed/formulated/ enforced:
of the Biofuels Act of 2006 which mandates the blending of 1.0 percent volume biodiesel into all diesel oil sold in the country.
inspections and product sampling at the refineries, refilling plants, depots/terminals and gasoline stations nationwide. On-the-spot tests and other confirmatory examinations are also being performed to detect any form of adulteration. Fuel Bioethanol Program Product Denaturing. This program is a joint undertaking of the DOE and the BIR on bioethanol importation of the oil companies. Said program is based on the DOEs D.C. No. 2006-08-001 Interim Guidelines for the Accreditation of Oil Industry Participants in the Fuel Bioethanol Program and BIR Revenue Regulations No.8-2006 Prescribing the Implementing Guidelines on the Taxation and Monitoring of the Raw Materials Used and the Bioethanol-Blended Gasoline (E-Gasoline) Produced under the Fuel Bioethanol Program of the Department of Energy (DOE). Under the DOE regulation, oil companies shall undergo an accreditation process prior to their actual participation in the program. This will also qualify them to avail of certain tax privileges as stipulated in the BIR issuance.
to prospective oil players interested to avail of the Program through the DOE while DBP-Trust Services administers the loan fund.
Enhance consumer safety and welfare through the development of an LPG Cylinder Exchange Program to address the growing proliferation of sub-standard and dilapidated LPG cylinders in the market. This is to promote accountability and responsibility on the part of the brand owners to maintain their own cylinders in accordance with set standards. The Program will likewise enforce standards/rules and regulation through appropriate policy interventions such as the Retail Rules for LPG and the proposed LPG Bill. Study the feasibility of establishing a National Petroleum Strategic Reserve in 2010 by putting in place the necessary fuel stockpile infrastructures and the actualization of oil discovery prospects. Develop and improve standards for products and facilities and enhance monitoring/enforcement of compliance with the standards to ensure adherence of industry players to the Retail Rules. Establish quality standards and an inspection/ sampling mechanism for diesel/gasoline preblended with bio-fuels. Formulate appropriate policy intervention to promote the use of pipeline for household LPG in the development plan of new areas and emerging communities.
Institution of safety nets to cushion the impact of intermittent increase in oil prices in the world market. Improvement in the quality and safety of LPG cylinders in circulation. Need for policy direction on oil stockpiling and oil reserve supply to ensure continuous and adequate supply. Enabling policy that will require the inclusion of household LPG pipelines in the development plan of new areas and emerging communities.
B. NATURAL GAS INDUSTRY DEVELOPMENT

Natural gas is the strategic fuel of the future for the Philippines. It is internationally recognized as the cleanest and most cost-efficient among the hydro carbon fuels. Natural gas will provide for a structural change in the countrys energy mix and strengthen the countrys fuel diversification program. It will also add to energy security position and sustainable development as the country moves away from oil. Barely five years after the commercial operation of the Malampaya gas field, natural gas has become the countrys major fuel for power generation. With the long-term goal of tapping this clean energy for other uses, the government will provide an enabling environment to encourage greater private sector involvement in its development.
Action Plan
Develop the Malampaya oil rim for the countrys national reserve as a contingent measure in the event of oil crises or supply disruption. Diversify supply sources by strengthening bilateral supply agreements with non-traditional suppliers to avert over dependence on major suppliers. Encourage infrastructure development through the provision of Gasoline Station Lending and Financial Assistance Program (GSLFAP) to new players in the liquid fuels sector and consequently promote healthy retail competition. The Program is being implemented in cooperation with the Philippine Amusement and Gaming Corporation (PAGCOR) and the Development Bank of the Philippines (DBP). PAGCOR ensures the availability of funds
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In 2006, natural gas continued to gain momentum and contributed the biggest share of 29.0 percent in the countrys power generation mix. This occurred despite the damages wrought by typhoon Caloy to some of the gas-fired facilities and the conduct of the first ever 25-day scheduled maintenance shutdown of the Malampaya platform. In Luzon, 40.0 percent of total electricity generation came from natural gas-fired power plants, i.e. the 1,200-MW Ilijan Power Plant, the 1,000-MW Sta. Rita Power Plant and the 500-MW San Lorenzo Power Plant, all of which are located in the province of Batangas and the 3-MW San Antonio Power Plant in the Province of Isabela. The combined generation amounted to 16,366 GWh and utilized 99,527 MMSCF of natural gas in 2006 to run these power plants. Natural gas is also being used by the Pilipinas Shell Refinery for its
On the other hand, the demonstration program promoting the use of CNG in public utility buses consumed an estimated volume of 13,780 SCF of gas. This was mainly sourced from the San Antonio gas field in Echague, Isabela, which is about 370 kilometers from Manila. As of end2006, the refurbishment of the countrys first mother-daughter station continued to be pursued to address the technical and safety requirements prior to its commercial operation. The system is expected to be fully operational before the end of 2007. Twenty-two units of public utility buses plying the routes of Laguna and Batangas going to Metro Manila will kick off this pilot project.
Putting up of strategic infrastructure facilities for the downstream natural gas industry, primarily the network of high and low pressure gas pipelines, receiving terminals and pumping stations to ensure that natural gas is delivered continuously to all demand sectors. Need for an integrated set of laws, regulations and incentives to encourage private sector support on the required investments while at the same time, ensuring public safety and protection. Need for highly-skilled and highly-trained manpower for the natural gas industry.
Action Plan
To increase the utilization of natural gas, the Philippines is vigorously promoting its use in the
Figure 22. NATURAL GAS INFRASTRUCTURE PROJECTS
on-site process energy requirements since the last quarter of 2005. For the refinerys own steam and power use in 2006, the refinery consumed a total of 2,257 MMSCF.
transportation, commercial and residential sectors, and is developing critical infrastructure that will efficiently deliver gas to the demand centers. In addition, the DOE is intensifying exploration for indigenous gas deposits and studying options for economically using imported LNG. The private sector is also encouraged to assist government in developing the natural gas industry Developing the countrys natural gas industry entails strategic plans and programs to be carried out in short, medium and long terms to leapfrog its development and ensure competitiveness. The energy sector will therefore pursue the following activities, plans and programs:
IEC Campaign
Harness multimedia technology and strategy e.g. television, radio and print ads, for faster and wider circulation of information on the natural gas program of the government.
Infrastructure Facilities Network
Form strong public-private partnerships for the development of the natural gas industry, particularly on the identified infrastructure projects as follows (with corresponding indicative year of completion and operation):

Pilot CNG mother-daughter station (2007); Batangas-Manila (Batman 1) Pipeline (2010); CNG Refilling Stations for Metro Manila (2010); Sucat-Fort Bonifacio pipeline (2011); Bataan-Manila (Batman 2) Pipeline (2012); LNG terminal in Limay (2012); Metro Manila Gas Loop (EDSA-Taft Loop) (2015); and Connection to Trans-ASEAN Gas Pipeline (TAGP) via Mindanao (2015).
Market Development
Prioritize the use of natural gas to fuel the additional capacity requirements in the power sector starting in 2010 for Luzon, as well as mandate the conversion of oil-thermal plants such as Sucat and Limay to be fueled by natural gas. Promote the expanded use of natural gas in transport, industry, buildings and agriculture in 2010.
Manpower Capability Building
Establish a Philippine Natural Gas Institute to serve as a policy think-tank center for natural gas. However, it could start as the national training center and venue for workshops, conferences and trainings on the operation of natural gas facilities. The Institute shall supply the manpower requirement for the industry. Introduce courses including a Bachelor of Science in Natural Gas Engineering in 2010.
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VI. Other Energy Programs

A. ENVIRONMENTAL MANAGEMENT AND PROTECTION
The sectors conscious efforts to address environmental sustainability is never more apparent in its policy thrusts to promote the development and use of environment-friendly fuels such as renewable and alternative energy sources and intensify its energy efficiency and conservation programs, among others. Likewise, cognizant of the consequent effects of energy development to the environment, the DOE continues to implement various intervention programs to ensure ecologically-sound energy project implementation. It is actively engaged in various inter-agency initiatives to address environment-related issues and concerns. In August 2007, the DOE was tasked to take the lead in the countrys over-all campaign to mitigate the impact of climate change. Some of the power plants being monitored are as follows: First Gas Santa Rita and San Lorenzo Natural Gas-Fired Power Plant in Batangas City, Keilco-Ilijan Natural Gas-Fired Power Plant in Ilijan, Batangas, Malampaya On-Shore Gas Plant in Batangas City, Bauang Diesel-Fired Power Plant in La Union, Pagbilao Coal-Fired Power Plant in Quezon, Mauban Coal-Fired Power Plant in Quezon, Calaca Coal-Fired Power Plant in Batangas and Masinloc Coal-Fired Power Plant in Zambales. Environmental Impact Assessment Review Committee (EIARC). Under the framework of the Philippine Environmental Impact Statement System (PEISS), the DOE provides technical support and advice to the EIARC in the evaluation of energy projects. The PEISS is a process that determines the environmental impact of a given project and the corresponding monitoring and mitigating measures that have to be implemented by the project proponent. In 2007, the DOE participated and completed the review of the environmental impact analysis for the PNOC-EDCs 50 to 120-MW Mindanao Geothermal Power Project. In process is the review of the Brixtons Coal Mine Project in Zamboanga Sibugay and Philsystems Coal Mine Project in Bulalacao, Mindoro. Metro Manila Air Shed Governing Board (MMASGB). The DOE has been involved in the activities of the Metro Manila Air Shed Governing Board in support to the objectives of the Clean Air Act. The MMASGB formulates policies and action plans, ensures implementation of programs, and monitors and evaluates the performance and compliance of partners in achieving cleaner air in the Metro Manila air shed. The proposed geo-political coverage of the air shed includes 25 cities and 83 municipalities from the NCR, Region III and Region IV-A. The MMASGB serves as a geo-political regional territorial body with recommendatory functions in policy and implementation of actions decided upon by the Board.
INTER-AGENCY INITIATIVES
Multi-partite Monitoring Team (MMT). To ensure compliance of energy/power projects to environmental regulations and standards, and to the Environmental Management and Monitoring Plans (EMMP) as stipulated in the Environmental Compliance Certificate (ECC) issued to proponents, the DOE actively participates in MMT activities that include regular monitoring of air and water quality within the project vicinity and the socio-economic and livelihood projects implemented in the host communities in line with their Corporate Social Responsibility. Further to its mandate in the MMT, the DOE ensures the projects sound environmental stewardship. It assists in the settlement of possible disputes that may arise in the project implementation and promotes cooperation and harmony among the stakeholders. It also sees to it that samples and observations are collected with integrity so as to provide rightful technical advice and recommendations.
Other Energy Programs 56
The MMASGB is composed of government agencies, NGOs/peoples organizations (POs), and private/business organizations. Representatives from NGOs and business sector include the Partnership for Clean Air, Transport Organization for Clean Air, Archdiocese of Manila, Ecology Desk, Concerned Citizens Against Pollution, Manila Observatory, Pollution Control Association of the Philippines, Inc., Philippine Institute of Chemical Engineers, Lingkod Tao Kalikasan, Youth for Sustainable Development Assembly, Inc. (YSDA Pilipinas, Inc.), Association of Environmental Third Party Service Providers, Inc., Centra2007, Azucarera de Don Pedro, Philippine Chamber of Commerce and Industry, Bayer Crop Science, Inc., Philippine Exporters Confederation, Inc., Philippine Institute of Petroleum, and Petron Corp. National Disaster Coordinating Council (NDCC). The establishment of the NDCC is embodied in Section 2 of Presidential Decree 1566. The DOE is one of the 18 member agencies of the NDCC, which is headed by the Secretary of National Defense. It is tasked to ensure the safety and immediate restoration of power installations in affected areas during times of calamities such as typhoons and floods. The NDCC implements a Four-Point Action Plan to promote disaster preparedness, to wit: (1) mechanisms for government and private sector partnership in relief and rehabilitation; (2) public information campaign on disaster preparedness; (3) capacity building for LGUs in identified vulnerable areas; and, (4) forecasting capability upgrading for PAGASA and PHILVOLCS. Committee on Energy Projects in NIPAS Areas (CEPNA). The objective of CEPNA is to identify and delineate all energy projects within the NIPAS coverage and formulate measures that will create or develop resource use complementation and harmonization towards sustainable development principles. The Committee undertakes the identification and reconciliation of its programs with overlapping location with respect to protected areas. Mapping of identified potential energy resources located in proclaimed or proposed protected areas is being undertaken by the DOE to assist prospective investors in identifying possible energy projects and to expedite the process of providing accurate and complete information.
Other Energy Programs
shift to less carbon emitting fuels in the transportation and industrial sectors. Qualifying Projects for Clean Development Mechanism (CDM). The CDM is one of the mechanisms or systems established under the Kyoto Protocol to reduce greenhouse gas emissions. The others, which are for developed or Annex I parties under the Convention are the Joint Implementation and Emissions Trading. The CDM aims to provide investments in more efficient and less GHG generating projects and activities in exchange for the countries contribution to the reduction of greenhouse gas emissions. President Arroyo signed E.O. No. 320 on 25 June 2004 designating the DENR as the Designated National Authority (DNA) for CDM. On the other hand, the DOE takes the lead role in the evaluation of energy-related projects. As of April 2007, the DNA has approved a total of 36 CDM projects and nine of which have been registered with the CDM Executive Board. However, only one project activity, the wind project, has so far requested Certified Emission Reductions (CERs) from the CDM Executive Board. Examples of these projects are other renewable energy power projects like geothermal, biomass and other wastes-to-energy projects.
Table 39. PHILIPPINE CDM PROJECT ACTIVITIES
Category Waste Management/Waste to Energy Energy-related Project Activities Total No. of Registered Project Activities Projects Requesting Registration Total CERs of Registered CDM Projects Project Requesting Issuance of CERs Total CERs Requested No. of Estimated CERs per Projects year (tCO2e/year) 27 455,430 9 830,248 36 1,285,678 9 1 283,995 1 27,807
CLIMATE CHANGE INITIATIVES

The energy sector is committed to ensure that the countrys environment is not jeopardized by energy undertakings. To this end, various climate change mitigation initiatives will be put in place for the planning horizon. These include renewable energy resource development, energy efficiency projects and
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Operationalization of the Presidential Task Force on Climate Change (PTFCC). In response to the countrys vulnerability to the impact of climate change, which is compounded by the location of the Philippines being both in the typhoon belt and the ring of fire, President G. M. Arroyo signed A.O. No. 171 Creating the Presidential Task Force on Climate Change (PTFCC) on 20 February 2007. The PTFCC is composed of the Cabinet Secretaries of the following government agencies DENR, DOE, DOST, DA and DILG and representatives from the private sector/civil society with the Inter-Agency Committee on Climate Change acting as the technical arm.
In August 2007, A.O. 171 was amended to A.O. 171-A designating the DOE Secretary as the Chairman and the DENR Secretary as the Vice-Chairman of the PTFCC, respectively. The amendment also included new members such as the Department of Education and the Commission on Higher Education. This is consistent with the international trend of focusing the integration of programs, policies and projects into the sectors responsible for the generation of GHG and/or those significantly affected by climate change, and in the case of the Philippines, it is the energy sector. The Task Force is mandated to do the following:
The response framework is consistent with the global action agenda on climate change. It is both comprehensive and holistic, synchronizes disparate efforts across disciplines, agencies and sectors under one common strategy for maximum impact and has a strong bias for local efforts and interventions. The Framework also hinges on the mitigation and adaptation responses through technological advances and financial resources in cooperation with all sectors of society and the international community. The PTFCC also participated in the Bali Climate Change Conference of the UNFCCC in December 2007. Among the major decisions that will affect the non-Annex countries including the Philippines include the Transfer of Technology and Financing Mechanisms under the Convention and the grouping of small scale CDM projects as well as increasing the sequestration limit for small scale afforestation and reforestation projects under the Protocol.
Conduct rapid assessment on the impacts of climate change, particularly on the most vulnerable sectors/areas of water resources, agriculture, coastal areas, terrestrial and marine ecosystems, among others; Ensure strict compliance to air emission standards and act with urgency to combat deforestation and environmental degradation and apprehend violators; Undertake/initiate strategic approaches and measures to prevent or reduce GHG emissions including fuel efficiency, energy conservation, use of renewable energy, waste management, etc; Conduct a massive and comprehensive public information and awareness campaign nationwide to educate the public on the climate change situation and its adverse impacts and mobilize multi-sectoral action; Design concrete risk reduction and mitigation measures and adaptation responses, especially to address short-term vulnerabilities, on sectors and areas where climate change will have the greatest impact; Collaborate with international partners at the bilateral, regional and multilateral levels to support a global front to stabilize GHG emissions and institute mitigating and adaptive measures, especially for developing countries; and Integrate and mainstream climate risk management in the development policies, plans and programs of government.
CARBON DIOXIDE EMISSIONS IN THE ENERGY SECTOR

To bring climate change to a halt, global greenhouse gas emissions particularly from the burning of fossil fuels must be reduced significantly. Total CO2 emissions from the use of fossil fuels consisting of oil, coal and natural gas decreased by 2.15 percent from the 71.40 MMMT in 2005 to 69.87 MMMT in 2006. Specifically, CO2 emissions from the use of oil and oil products dropped by 3.31 percent from 44.62 MMMT in 2005 to 43.14 MMMT in 2006, while emissions from natural gas also decreased by 6.32 percent from 6.28 MMMT to 5.88 MMMT for the periods in review. However, there was a slight increase of CO2 emissions from the use of coal by 1.66 percent from 20.51 MMMT in 2005 to 20.85 MMMT in 2006. In terms of power generation, total CO2 emissions from fossil fuel-based power plants decreased by 12.68 percent from 26.23 MMMT in 2005 to 22.90 MMMT in 2006. Oil-fired power plants CO2 emissions went down by 26.7 percent from 2005 level of 4.15 MMMT to 3.04 MMMT in 2006. Meanwhile, emission levels generated from coal-fired and natural gas power plants fell by 10.2 percent and 9.5 percent, respectively.
As an initial activity, the PTFCC under the leadership of DOE formulated the Climate Change: The Philippine Response which outlines the countrys climate change response framework and includes all the current and proposed projects of member agencies and private sector initiatives on climate change. This was presented to President G. M. Arroyo during the First National Conference on Climate Change held in Albay in November 2007.
The slight reduction of CO2 emissions in energy use are attributable to the following: (1) decreased use of oil and oil products; (2) increased use of renewable energy sources (hydro, geothermal, solar and wind); (3) implementation of energy efficiency and conservation measures; (4) installation of pollution control technologies to comply with air quality standards; (5) use of advanced energy technologies such as combined-cycle units and combined heat and power (CHP) systems; and, (6) carbon sequestration projects (e.g. reforestation projects) implemented by power plants and other manufacturing industries.
B. FOSTERING STRATEGIC ALLIANCES WITH OTHER COUNTRIES

International energy cooperation is seen as vital in pursuing collaborative activities with other countries to realize our goal of achieving greater energy self-sufficiency level, energy security and sustainability. Having limited energy resources and insufficient infrastructure support, forging strategic alliances through bilateral, regional and multilateral agreements is a potent option in advancing the countrys energy agenda. To date, the government continuously participates in international fora and dialogues like the ASEAN Ministers on Energy Meeting-Senior Officials Meeting on Energy (AMEMSOME), the APEC Energy Ministers Meeting (APECEMM) and APEC-Energy Working Group Meeting (APEC-EMM), the International Energy Forum (IEF), and more recently, the Asia Cooperation Dialogue (ACD). In the planning horizon, the Philippines will remain an energy importing country and thus, international energy cooperation engagement will provide a window for diversifying energy sources, attracting foreign investments, promoting transfer of technology and exchanging information and expertise.
Need to promote and sustain social acceptability of energy projects due to associated environmental concerns, which cause delays in project implementation. Need to integrate, align and merge climate change objectives with the challenge of providing affordable and sustainable energy to the country.
Action Plan
The following courses of actions are identified to further strengthen the initiatives on environmental management program:
Continue to collaborate with energy project proponents and concerned local government units to address social acceptability issues of energy projects. Strengthen participation in various inter-agency activities on environmental issues. Pursue the development of an energy-environment database system of power projects to serve as DOEs monitoring and policy decision-making tool on energy-environment issues. Implement climate change programs, projects and activities like mitigation mechanisms, vulnerability assessment of energy projects and facilities, energy efficiency projects and IEC campaigns, among others.
BILATERAL COOPERATION
There are several bilateral agreements that the Philippines entered into with foreign countries, agencies and institutions through MOA, MOU, Memoranda of Intent, Memoranda of Cooperation and other instruments. Such agreements could facilitate investment, energy supply arrangement/ agreement, and joint ventures on energy exploration and development, among others. Following are the bilateral agreements with other countries:
RP-US
In March 2007, the DOE and the United States Geological Services (USGS) signed an MOU on Scientific and Technical Cooperation in the Earth Sciences. The Agreement provides the framework for the exchange of scientific and technical knowledge between the two countries in the energy sector. As an initial collaborative undertaking, the USGS and the DOE are currently undertaking the Joint Assessment of Coal-bed Methane and Coal Resources in the Coalfields in the Philippines. Under this activity, the Philippines shall acquire new knowledge and technology in coal resource assessment including undiscovered gas resources in the coal beds such as coal-bed methane, which can be tapped as an alternative fuel source.
Table 40. CO2 EMISSIONS FROM ENERGY USE (MMMT)

2005 Oil and Oil Products Coal Gas Total 44.62 20.51 6.28 71.40 2006 43.14 20.85 5.88 69.87 Change MMMT (1.48) 0.34 (0.40) (1.53) % (3.31) 1.66 (6.32) (2.15)
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Guided by the ASEAN institutions and frameworks to manage disputes and develop friendly relations between ASEAN member countries and China, the Tripartite Agreement for Joint Marine Seismic Undertaking (JMSU) among China National Offshore Oil Corporation (CNOOC), Vietnam Oil and Gas Corporation (PETROVIETNAM) and the PNOC has already proceeded with Phase II of its work program. The JSMU covers an area of 142,866 sq. km. in the South China Sea with a three-year term that commenced on 14 March 2005. Under Phase I of the agreement, 2D seismic acquisition was undertaken in September to mid November 2005. Meanwhile, processing and reprocessing of new and vintage seismic data were also carried out from December 2005 until December 2006. The JMSU in the South China Sea has progressed very well and demonstrated the way forward in transforming the South China Sea into an area of friendship and cooperation. Survey results showed valid economic reasons why the Tripartite Agreement is being pursued for the second phase. The Philippines is keen on advancing the Agreement and will explore the possibility of pursuing Joint Development Agreement (JDA) with the parties involved should results of the seismic interpretation turn out to be highly prospective in terms of oil and gas reserves in the covered area.
Indonesia is a major source of the countrys energy requirements having vast reserves of oil, gas and coal. A number of agreements had been signed between the two countries to ensure supply as well as to find opportunities for collaboration in energy exploration and development. In early 2006, the Philippines within the purview of the BIMP-EAGA, initiated discussions with Indonesia to pursue further collaboration in the energy sector especially in the areas of coal supply to the Philippines. Initially, Indonesian President Yodhoyono agreed to explore discussions on long-term coal supply to the Philippines and geothermal development in Indonesia. Proposed draft agreements were exchanged and discussions between energy missions of the two countries had taken place. Currently, the two countries are exerting efforts to sign a formal agreement.
MULTILATERAL COOPERATION
The Philippines is also actively participating in regional energy cooperation. Over the years, it has aggressively taken bold initiatives in ASEAN, APEC, ACD, ASEM and East Asia Summit, among others.
The Association of Southeast Asian Nations (ASEAN)

Member countries of ASEAN have undertaken energy cooperation activities since the groups formation in 1967. Currently, the regional projects that have been carried out and continued to be implemented are under the framework of the ASEAN Plan of Action on Energy Cooperation (APAEC) 20042009. Among the major cross-border projects of the ASEAN are the ASEAN Power Grid and the TransASEAN Gas Pipeline. The other cooperation activities are in the areas of coal, renewable energy, energy efficiency and regional energy planning. A major initiative in the region is the ASEAN Petroleum Security Agreement (APSA). The agreement provides for the sharing of oil supply among member countries in times of shortages. The Philippines initiated a review of this Agreement in 1999 and it is expected that the new draft of the APSA will be signed by the Energy Ministers. Likewise, under the ASEAN + 3 (China, Japan, Korea) Energy Partnership, the common goal for greater energy security and sustainability in the region is given great emphasis amidst projection that the region would become the largest energy consuming region in the world. The member countries are committed to enhance energy exploration and wider utilization of indigenous energy resources.
RP-Russia
Russia holds the worlds largest natural gas reserves with 1,680 trillion cubic feet (TCF) of gas, and the second largest coal reserves with 173 billion tons of recoverable reserves. In addition, Russia has also proven oil reserves of 60 billion barrels. Russia is the worlds largest exporter of natural gas and the second largest oil exporter. In 2006, Russia announced its intention to supply about 30.0 percent of Asias oil requirement in the next 10-15 years. The Philippines has previously sourced oil from Russia and thus, the intention is to resume negotiations between the two countries for supply of oil (a number of meetings had taken place between government officials and an invitation was extended to the Russians to visit the Philippines). An energy experts meeting may be convened as a venue to discuss possible areas of cooperation between the two countries, such as the establishment of an oil refinery, construction of an LNG receiving and re-gasification terminal with an appurtenant pipeline system and power plant, and joint exploration and production projects in low-risk and promising areas.
RP-China
RP-Indonesia
The Asia-Pacific Economic Cooperation (APEC)

The Philippines is a member of APEC and actively participates in the initiatives of the APEC EWG, which facilitates energy trade and investment. In 2001, the APEC Economic Leaders endorsed the Energy Security Initiative (ESI). The Initiative includes shortterm measures to respond to temporary energy supply disruptions, as well as long-term policy responses to energy security concerns. Being a member economy of the APEC, the Philippines is involved in the following key areas of the ESI: 1. 2. 3. 4. 5. Joint Oil Data Initiative (JODI) Sea-Lane Security Real-Time Emergency Information Sharing Oil Supply Emergency Response Non-Petroleum and Long Term Measures
International Energy Forum (IEF)

The IEF is a venue where major producers and consumers meet to discuss issues on production, demand outlook and regional prospects as well as the energy and economic Interdependence between energy producing and consuming countries. During its most recent meeting in Riyadh in May 2007, the Kingdom of Saudi Arabia major supplier of crude oil has committed to continue in providing oil supply requirement of the country as well as fill in any shortages of supply from other sources.
The Energy Charter Treaty (ECT)

The Philippines application for observer status in conferences in the Energy Charter Treaty has already been approved and is due for formal signing. The ECT is an international agreement signed in Lisbon in December 1994. It is a legally-binding multilateral framework for energy cooperation in the context of establishing a legal foundation for global energy security and open, competitive markets and sustainable development. Among its fundamental aims is the creation of a level playing field to be observed by all participating governments, thereby promoting energyrelated investments and trade. As observer, the Philippines may participate in the ECT conference, in the working groups as well as in its activities. The country may also gain access to the Charters pool of knowledge and documents. The ultimate full membership to the Conference and the adoption of the Treaty by the Philippines is foreseen to increase trade and investments in the energy sector.
Asia Cooperation Dialogue (ACD)

The ACD was created in 2002 to promote Asian cooperation at the continental level with the aim of integrating member countries of previously separate political or economic regional organizations such as ASEAN, South Asian Association for Regional Cooperation (SAARC) or the Gulf Cooperation Council. The Dialogue serves as a platform to discuss Asia-wide cooperation. The Philippines is one of the co-prime movers on energy together with Bahrain, China, Indonesia, Iran and Qatar. Likewise, the Philippines is principally involved in the drafting of the ACD Action Plan in collaboration with Indonesia to further advance energy cooperation in the region. The Philippines will host a key ACD conference on energy that will focus on developing alternative and renewable energy sources.
C. CONSUMER WELFARE AND PROTECTION

The government aims to build a broad base of well-informed, responsible and vigilant consumers. It also encourages consumers to play a more active role in policy formulation and decision-making, which will impact on future energy choices and consumption patterns.
East Asia Summit (EAS)

Following the signing of the Cebu Declaration on East Asia Energy Security by the Heads of State/ Government of the Member Countries of ASEAN and its dialogue partners during the 2nd EAS held in January 2007 in Cebu, the Leaders endorsed the establishment of a working group to study possible areas of cooperation among EAS members to enhance energy security. Following this directive, the EAS-Energy Cooperation Task Force (ECTF) was established with three identified areas of cooperation namely: biofuels for transport and other uses, market integration, and energy efficiency. The Philippines is designated as the lead country for the working group on biofuels for transport and other uses. The working group has already drafted the regional program for biofuels development.
The DOE, through its Consumer Welfare and Promotion Office (CWPO), is gaining headway in empowering energy consumers to effect long-term socio-economic change and improved environmental sustainability. An empowered consumer is said to be an educated consumer who knows his rights and responsibilities. This precept is an integral component of seminar topics concerning energy conservation, safety practices, and reforms in both the oil and power sectors, which constitute the governments
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The conduct of IEC also extends to foreign-funded projects such as the UNDP-GEF PELMATP focusing on the use of energy-efficient lighting systems, CBRED and other programs supporting the use of clean fuels such as natural gas, autoLPG, bioethanol, and biodiesel. Another empowering mechanism involves broadening networks with consumer groups, government agencies, and forging partnership with academic institutions, such as the University of the Philippines-Los Baos and agencies such as the Department of Trade and Industry for the establishment of Energy Watch Teams in City/Municipal Consumer Protection Centers. The Team is intended to promptly address the energy issues at the grassroots level. The DOE-DTI-LGU collaboration has been found to be an effective vehicle in curbing unscrupulous energy trade practices through vigilant monitoring and inspection. Likewise, in response to the call of President Gloria Macapagal-Arroyo to bring the governments program closer to the people, the energy Common Folks Day was institutionalized. It has also been integrated with the Serbisyo Muna Caravan with the objective of responding to the consumer concerns in real time. The DOEs Gender and Development Program has likewise addressed specific gender issues attributable to energy activities. In the area of research, the CWPO has initiated a program called Academic Research Assistance Program (or DOE-AREA) with the De La Salle College of Engineering as its first beneficiary. This is to support the research activities of the government and subsequently, enhance the capabilities of students. Thesis counseling has been part of the ongoing efforts to align researches with the needs of the energy sector. The DOE continues to address specific consumer needs and offers consumer assistance through the Enertxt, e-mail, phone-in, and walk-in services and assists in student researches, verification of household energy bills, and other consumer requirements.
Develop continuous networking with the academe, professional organizations and civil society to strengthen consumer advocacy programs. Institutionalize Energy Watch Team in city/ municipality levels in key provinces/cities such as Palawan, Ilocos Norte, Bicol, Quezon, and Subic Create a database of energy researches and technical papers to provide ready reference for literature reviews and pursue efforts in the energy fields found viable, and avoid any research or project duplication Maintain partnership with educational institutions and private sector in undertaking energy-related researches and activities. Aside from the De La Salle University, other universities will also be tapped for DOE-AREA program, namely: University of Santo Tomas, Mapua Institute of Technology, Adamson University, Polytechnic University of the Philippines, University of the Philippines-Los Baos, Miriam College, St. Pauls College, among others.
D. NUCLEAR POWER AS A LONG-TERM ENERGY OPTION

The continuing volatility of oil prices in the world market, the concern about global warming due to greenhouse gas emissions, and the growing emphasis on energy security has resurrected nuclear power as one of the most viable energy sources. This new wave of interest on nuclear power in the international energy circles has led to what may aptly be called the nuclear renaissance. As a net energy importer, the Philippines is once again looking into the prospects of developing a nuclear power program to support its own development needs. It has considered nuclear as a long-term energy option.
INTERNATIONAL AND REGIONAL DEVELOPMENTS ON NUCLEAR POWER

As of April 2006, there were 443 nuclear power reactors in operation in 30 countries, an aggregate capacity of 370 GW and supplies about 16.0 percent of the worlds electricity requirement (Figure 23). Of this total, 405 nuclear reactors or about 91.0 percent are installed in either the Organization for Economic Cooperation and Development (OECD) countries or those with economies in transition. Expansion pattern, on the other hand, is largely happening in developing countries, mainly focusing in Asia.
Intensifying IEC campaign to address issues on renewable energy, implementation of the Biofuels Act of 2006 and other energy policies. Continuing and sustaining the education and awareness program on consumer protection and energy-related issues. Establishing an energy sector research database in support of the policy making mandate of the DOE
nationwide IEC campaign and where more than 6,000 stakeholders have been reached.
Action Plan
Figure 23. SHARE OF NUCLEAR IN GLOBAL ELECTRICITY GENERATION, 2006

Nuclear 15.7% Renewables 2.1% Coal 39.8%
Hydro 16.1%
For its part, the ASEAN region is slowly making headway into the prospects of nuclear energy as a subject of further regional cooperation. In fact, at the recently concluded SOME of the 25th AMEM held on 20 August 2007, the proposal of host country Singapore for the establishment of a regional sub-sector network on nuclear energy was among the important topics discussed. The said sub-sector network will be tasked to explore issues relating to nuclear energy and develop an ASEAN-wide cooperation and programmes in this area. To date, three ASEAN-member countries have made pronouncements on their plans of mainstreaming nuclear in their respective power generation mix. Indonesia has confirmed its plan of building a 4,000-MW nuclear power plant in Mt. Muria in Central Java and expected to be operational between 2016 to 2018. Vietnam on the other hand, has been working closely with the Japanese government in the last five years for the conduct of feasibility studies on building nuclear power plants in specific sites. It plans to operate its first nuclear power facility before 2018 with an initial capacity of around 2,000 MW. Currently, about 20 Vietnamese nationals are undergoing training under the support of Japans Ministry of Energy, Trade and Industry (METI). Meanwhile, Thailand has indicated that 16.0 percent of its generating capacities to be built between 2012 and 2021 will come from nuclear sources as laid down in its recently approved 15-year PDP. An integral part of the Plan is an intensive IEC campaign on the possible entry of nuclear.
Gas 19.6%
Oil 6.7%
Among the countries in Asia, Japan has the largest nuclear power program, with 56 reactors currently in operation, followed by the Republic of Korea with 20 units in operation, providing about 45.0 percent of the countrys power requirement. While Asias absolute and relative contribution to nuclear power is still small, significant developments are expected to happen within the region especially with the aggressive expansion plans of both India and China (Figure 24). Currently, India has 15 operating reactors with eight additional units under construction. Meanwhile, China has nine reactors in operation and three more units under construction.
Figure 24. STATUS OF NUCLEAR DEVELOPMENT IN EAST ASIA
THE PHILIPPINE APPROACH

Long-Term Need
Since the creation of the DOE in 1992, only the PEP covering the planning period 1998-2035 incorporated nuclear as a long-term energy supply option. The 1998 Plan forecast developed four scenarios to determine its sensitivity to different energy policy alternatives and the impact of regional cooperation programs. Under the said Plan, a 600-MW nuclear plant which will be operational by 2025 will contribute an initial volume of 0.885 MTOE to the projected energy mix and reach up to 3.54 MTOE by 2035. Additional nuclear capacities of 600 MW were simulated to be in place by 2027, 2030 and 2034. Thus, total capacity from nuclear under the PEP 1998-2035 was projected to reach 2,400 MW by end of the planning period.
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The Arroyo administration is putting premium on human resource capability building and enhancement as a necessary prelude in considering nuclear power as a long-term energy option. Capability building and enhancement on the various aspects of nuclear energy will involve training of local manpower for the possible introduction of nuclear into the countrys energy system. The decision to mothball the Philippine Nuclear Power Plant (PNPP) in 1986 left a void in harnessing and further developing local expertise on nuclear. The report of the Nuclear Power Steering Committee (NPSC) completed in 1998, cited that there is a need for a slow but calculated build-up of the manpower base using young engineers and technologists. Former President Fidel V. Ramos created the NPSC in 1995 by virtue of E.O. No. 243 to provide policies, direction, monitoring, evaluation, and other functions necessary and appropriate to attain the objectives of the overall Nuclear Power Program of the country. Currently, the DOE is leading an inter-agency discussion among concerned government agencies, the academe and private sector to thresh-out possibilities on re-building local technical capability in nuclear sciences and engineering. At present the manpower capability of NPC in nuclear engineering has declined from the original number of 710 engineers who were trained by Westinghouse and EBASCO Overseas Corporation in the 1980s to 106 many of whom are now bound for retirement in the next five to ten years.
Although many studies were conducted in the past on converting PNPP-1 for other fuel, there is a need to update these studies to current economic and technical conditions. This study can be conducted in parallel with the rehabilitation study that can be entirely done by the NPC.
Options for Philippine Nuclear Power Plant-1 (PNPP-1)

Planning for the introduction of nuclear energy in the country will alternately need to settle the question of what to do with the mothballed PNPP-1 in Morong, Bataan. Two broad options can be considered: rehabilitation and conversion.
The Bataan Nuclear Power Plant was declared unsafe and inoperable by a team of international inspectors in 1986. (Courtesy of philnews. com)
Human Resource Capability Building
Rehabilitating PNPP-1 to generate nuclear energy, despite being mothballed for 20 years is an option that remains to be explored. Such option is consistent with experience in countries such as USA, Romania, Argentina, among others where nuclear plants that were similarly mothballed in 1985 are now being rehabilitated. The feasibility of rehabilitating the plant should be referred to the International Atomic Energy Agency (IAEA) for technical assistance. Whether the actual rehabilitation of PNPP-1 should be done by the government or contracted to the private sector is a policy issue that will be addressed later.
Investment Portfolio
VII. Investment Portfolio

In pursuit of the energy sectors agenda to attain energy independence and promote a competitive energy sector, Table 41 summarizes the countrys energy investment requirements amounting to PhP 1,420.41 billion from 2007 to 2014. The infusion of fresh capital and the firming up of financial commitment from the industry players and stakeholders are the essential factors in realizing the energy sector goals. In line with this, the Department will intensify efforts to encourage active participation of the private sector in the different energy business opportunities.
Table 41. SECTORAL INVESTMENT REQUIREMENTS, 2007 2014 (Billion PhP)
Sector Fossil Fuel Resources Oil and Gas Coal* Renewable Energy Resources Geothermal* Hydropower* Biomass* Wind* Alternative Transport Fuels Energy Efciency and Conservation Power and Transmission Development Power Generation Transmission Expanded Rural Electrication Downstream Oil Natural Gas Total Amount 517.10 398.51 118.59 137.45 52.75 17.75 14.25 52.70 83.22 48.69 420.07 399.49 20.58 4.23 209.65 10.39 199.26 1,420.41 Government 18.08 11.29 1.19 5.60 3.51 4.92 39.08 18.50 20.58 2.13 67.72 Private 517.10 398.51 118.59 119.37 41.46 16.56 14.25 47.10 79.71 43.77 380.98 380.98 2.10 209.65 10.39 199.26 1,352.68
FOSSIL FUEL RESOURCES

Oil and Gas
The PECR, which also covers the geothermal and coal sectors, continuously encouraged local and international investors in the exploration, development and production of petroleum resources in the country. In the 2005 PECR, four petroleum contract areas were offered to the stakeholders. As a result, the following contracts were awarded in 2006 to the following: (i) PNOC-EC/Nido Petroleum, Pty. Ltd for Area 1 in Southwest Palawan; (ii) Burgundy Global Exploration Corporation for Area 2 in Northeast Palawan and Area 3 in Southeast Palawan; and, (iii) the joint venture of Ranhill Berhad and Phil-Mal Petroenergy
Cost of Power Plant Construction amounting to PhP 140.40 billion is incorporated in the investment cost of power generation: Coal: Sultan Kudarat PhP 20.57 billion Geothermal (PhP 8.88): Tanawon Geothermal Plant, Rangas Geothermal Plant, Kayabon(PhP Manito Geothermal Plant, and Dauin Geothermal Plant at PhP 2.22 billion for each plant Hydropower (PhP 97.06): Kalayaan Pumped Storage Power Plant III PhP 40.32 billion; (PhP Balingtingon River Multi-Purpose Project PhP 4.93 billion; Pantabangan Expansion PhP 8.74 billion; Aklan Hydropower Project PhP 4.59 billion; Villasiga HEP PhP 0.90 billion; Cabulig Hydro PhP 0.90 billion; Tamugan AB, Panigan and Suawan Hydroelectric Power PhP 3.86 billion; Agus 3 Hydroelectric PhP 25.20 billion; and Tagoloan Hydropower PhP 7.62 billion. Biomass (PhP 5.32): Bulacan Biomass-to-Energy Project PhP 1.60 billion; Panay Biomass (PhP Power Project PhP 2.66 billion; and Cagayan de Oro Biomass Power Project PhP 1.06 billion. Wind (PhP 9.63): Burgos Wind Power Project Phase 1 PhP 4.48 billion; and Burgos Wind (PhP Burgos Power Project Phase 2 PhP 5.15 billion.
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Corporation for Area 4 in the Sulu Sea basin. These four contracts provided financial commitment worth US$ 155.10 million. Further, it is estimated that US$ 46.20 million in investments will
be raised from contracts in West Calamian, West Balabac and Northeast Palawan. On the other hand, in the 2006 PECR, nine petroleum contract areas were offered covering 72,639 sq. kms.
Program/Projects Geophysical Data Acquisition A. 2D Seismic B. 3D Seismic Exploration Well Drilling A. Onshore B. Offshore Oil and Gas (Including Condensate) Production A. Oil B. Gas C. Condensate Total
2007 0.735 0.170 0.565 4.916 0.848 4.068 37.322 6.876 27.492 2.954 42.973
2008 0.396 0.113 0.283 7.289 1.187 6.102 35.561 5.213 27.492 2.856 43.246
2010 0.396 0.113 0.283 10.170 1.356 8.814 47.271 10.252 34.360 2.659 57.837
2014 0.396 0.113 0.283 3.390 0.678 2.712 43.158 6.401 34.788 1.969 46.944
Table 43. COAL INVESTMENT REQUIREMENTS (Billion PhP)

Region Luzon II Capacity (MW) 200 50 50 50 50 500 100 200 200 300 200 100 1,000 Location Cauayan, Isabela Cauayan, Isabela Iguig, Cagayan Iguig, Cagayan Antique Antique Antique Sultan Kudarat Surigao Year Available 2009 2012 2010 2013 2010 2012 2014 2009 2011 3.318 3.318 2007 2008 2.571 2.571 2010 2.571 2014
2.571 3.428 3.428 8.571 8.571 5.143
Visayas VI
In the 2005 PECR, seven areas were offered but the bids tendered did not meet the technical criteria. Notwithstanding, 15 coal operating contracts were carried out by 11 companies in areas in Luzon, Visayas and Mindanao that generated about PhP 290.00 million in 2005. In the 2006 PECR, 14 coal prospects were offered for the exploration, development and production in Quezon, Negros Occidental, Cebu, Surigao del Norte, Surigao del Sur, Agusan del Sur, Davao Oriental and Zamboanga Sibugay. The bids submitted are estimated to bring in PhP 91.97 million worth of investments. Further, the existing COCs in 2006 yielded PhP 5,759.0 billion for the exploration, development and production of indigenous coal. The total investment requirement for the coal sector in the planning period is estimated at PhP 139.16 billion for 1,000 MW as shown in Table 43 (Annex A.1.20). From the said amount, PhP 20.57 billion will be used to develop potential areas in Luzon, PhP 51.43 billion for Visayas and PhP 30.86 billion for Mindanao. In addition, the mine investment, which includes capital outlay, operating cost among others, will require PhP 36.31 billion.
Mindanao XII XIII Mine Investment Total
5.143 10.285 6.857 3.428 3.514 4.322 5.976 9.513 25.749 11.119
in shallow to deep waters within the prospective basins of East Palawan and Mindoro-Cuyo as well as in the promising basins of Cagayan, Central Luzon, Visayas and Agusan-Davao. These contract areas are projected to bring in at least US$ 165 million investments. The bids are undergoing technical, financial and legal evaluation and awarding will be done within the year. Aside from these investments, US$ 136 million were generated from the existing petroleum SCs and geophysical survey and exploration contracts in 2006. Table 42 (Annex A.1.19) shows that the acquisition program on 2D and 3D seismic data will entail PhP 0.96 billion and PhP 2.55 billion, respectively within the planning period. In addition,PhP 8.31 billion is needed for onshore exploratory drilling while offshore well drilling will require PhP 45.43 billion in capital investments. Meanwhile,
the development and production of domestic oil, gas and condensate will entail PhP 341.27 billion. The requirement of PhP 398.51 billion for the entire petroleum sector is expected to be provided by the private sector. In 2007, four petroleum service contractors have committed to pour in investments of at least US$ 153.0 million for offshore drilling of five exploration wells. Malaysias Petronas Carigali Overseas Bhd. has started drilling one exploration well in Mindoro with a total investment of US$ 23.0 million; Galoc Production Company will drill two production wells in Northwest Palawan and allocated US$ 86.4 million; Japan Petroleum Exploration Company will drill one exploration well in Taon Strait with an investment of at least US$ 37.0 million; and the Singaporebased Premier Oil will drill one exploration well in Ragay Gulf in the Bicol Region at a projected cost of US$ 6.8 million.
RENEWABLE ENERGY
The Department is continuously promoting the use of indigenous and renewable energy resources. As a result, a number of projects had been initiated and implemented by the private sector. With this trend, it is projected that a total investment of PhP 258.34 billion will be required in the entire planning period for the development and promotion of renewable energy resources.
Geothermal
In the 2005 PECR, there were no contracts awarded from the 11 areas offered for exploration, development and direct utilization.
Investment Portfolio 66
Table 42. OIL AND GAS INVESTMENT REQUIREMENTS (Billion PhP)
Coal
Table 44. GEOTHERMAL INVESTMENT REQUIREMENTS (Billion PhP)

Region Luzon CAR II III IV-A IV-B V Program/ Projects Location Capacity (MW) 380.00 60.00 60.00 20.00 20.00 40.00 20.00 40.00 40.00 40.00 40.00 80.00 20.00 40.00 20.00 120.00 40.00 20.00 40.00 20.00 580.00 Year Available 2013 2014 2014 2014 2012 2012 2012 2011 2013 2013 0.012 1.925 2014 2011 2012 0.580 1.345 0.251 2012 2013 2014 2012 0.251 0.066 2.188 2,254 0.186 1.717 3.485 5,202 0.066 2007 Govt. Private 0.066 0.012 2008 Govt. Private 1.717 1.808 2010 Govt. Private 4.643 1.994 1.045 0.801 2014 Govt. Private 2.071 0.026 0.006 0.561 0.281 0.281 0.130 0.003 0.130 0.004 0.004 0.005 0.679 0.012 0.283 0.812 0.281 0.130 0.003 0.682 0.703 0.259 0.130 0.011 0.560 0.003 0.259 3.057 1.097 4,154
Batong Buhay Batong Buhay, Kalinga Buguias-Tinoc Tinoc, Ifugao Daklan Daklan, Benguet Baua Baua, Cagayan Natib Natib, Bataan Mabini Mabini, Batangas Montelago Montelago, Mindoro Or. Tanawon Albay & Sorsogon Rangas Albay & Sorsogon Manito-Kayabon Manito, Albay Maintenance of Existing Plants Mandalagan Mandalagan, Negros Occidental Dauin Dauin, Negros Oriental Biliran Biliran, Leyte Maintenance of Existing Plants
0.919 0.405 0.919 0.809 0.624 0.375 1.491 0.690 0.801 0.186 0.790 0.683 0.608 0.565 0.138 1.247 0.690 0.405 0.557 0.007 1.974 0.919 0.649
Visayas VI VII VIII Mindanao IX XI
0.554 0.405
Lakewood Lakewood, Zamboanga del Sur Amacan Amacan, North Davao SE Apo Kapatagan, Davao del Sur XII NW Apo Tiko, North Cotabato Maintenance of Existing Plants Government - Private Total
0.405 0.007 7.021 3.248 10,269
Note: Government investment in geothermal are commitments of PNOC-EDC, which was privatized in November 2007.
In the 2006 PECR, on the other hand, three prospective areas were offered in Batangas, Biliran and Compostela Valley. The bids submitted are expected to generate US$ 3.15 million. For the planning period, a total of PhP 61.63 billion in investments is required for the operation of geothermal areas including the exploration and development of 580-MW potential capacity all over the country. From this total amount, PhP 20.17 billion will come from the government and PhP 41.46 billion from the private sector. Table 44 (Annex A.1.21) indicates that the projects in Luzon will entail PhP 37.82 billion in which PhP 10.39 billion will be provided by the government and PhP 27.43 billion by the private sector. The Visayas area will need PhP 11.50 billion, with PhP 8.25 billion to be provided by the government and PhP 3.25 billion to be sourced from the private sector. Lastly, the Mindanao area will require PhP 12.31 billion in capital investment with PhP 1.53 billion coming from the government sector and PhP 10.78 billion from the private investors.
Biomass
The private sector has been very active in the implementation of biomass projects. Listed in Table 46 (Annex A.1.23) are the biomass projects that could generate a potential capacity of 183.90 MW with a total investment requirement estimated at PhP 19.57 billion. These projects are mostly situated in Luzon and in the Visayas region.
Wind
As an offshoot of the Northwind Project in Ilocos Norte, the private sector has been gaining grounds in the development of wind energy. Additional sites have been identified which increased the potential capacity to 556 MW. The total investment requirement detailed in Table 47 (Annex A.1.24) amounts to PhP 62.33 billion.
ALTERNATIVE TRANSPORT FUELS

In line with the Governments goal to reduce dependence from fossil fuels, the DOE is continuously promoting the utilization of alternative fuels for transport such as biodiesel (CME), bioethanol, CNG and autogas (autoLPG). The Biofuels Act is expected to further spur investments on the production of biodiesel and bioethanol. In addition, jatropha curcass is gaining popularity as a potential source of biodiesel. The PNOCs Alternative Fuel Corporation is currently conducting studies in the determination of the best variety to be planted, cost effectiveness, efficient processing to biodiesel, etc. Table 48 (Annex A.1.25) indicates that the implementation of the alternative fuels program including jatropha would entail PhP 83.22 billion.
Hydropower
To further increase the share of hydropower in the energy mix, there are still 41 potential hydropower sites with a total capacity of 1,025.10 MW that could be tapped. Development of these sites would require PhP 114.81 billion in capital investments over the entire planning period. Table 45 (Annex A.1.22) shows that in Luzon, the capital requirement is PhP 57.97 billion, while Visayas and Mindanao need capital infusion of PhP 15.42 billion and PhP 41.42 billion, respectively.
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Super Region
Project
Location Lagawe, Ifugao Tabuk, Kalinga Atok, Benguet Benguet Pagudpod, Ilocos Norte Solano, Nueva Vizcaya Pantabangan, Nueva Ecija Nueva Ecija Kalayaan, Laguna
Northern Luzon Agribusiness Quadrangle CAR Ibulao MHP Bulanao RIS Atok 4 MHP Buguias 1 MHP I Pansian River MHP II Uddiawan MHP III Pantabangan Expansion Balintingon River Metro Luzon Urban Beltway IV-A Multi-purpose Project Kalayaan Pumped Storage Power Plant III (CBK Expansion) IV-B Catuiran MHP Central Philippines IV-B Langogan MHP Batang Batang MHP Cabinbin MHP Vera Falls V Palali Falls Cumaginking Lower Dugui MHP Hitoma 1 MHP Hitoma 2 MHP Solong Falls MHP Kapipian MHP VI Villasiga HEP Timbaban HEP Aklan Hydropower Project Igbolo MHP VII Sicopong HEP Siaton MHP Pacuan HEP VIII Bugtong MHP Amandaraga MHP Mindanao Agribusiness IX Salug Daku MHP Lower Dapitan MHP Upper Dapitan MHP Middle Dapitan MHP X Agus 3 Hydroelectric Plant Tagoloan Hydropower Cabulig MHP XI Suwawan MHP Tamugan AB, Panigan and Suawan Hydroelectric Power Talaingod MHP XII Magpet MHP Government - Private Total
Potential Year Capacity Available (MW) 126.40 1.50 2010 0.30 2010 0.30 2010 0.60 2010 0.70 2010 1.00 2010 78.00 2011 44.00 2013 368.00 360.00 2011
2007 Govt Priv
2008 Govt 0.013 0.013 0.013 0.027 0.031 0.045 Priv 0.184 0.067
2010 Govt Priv 5.242
2014 Govt Priv
5.242 24.730 24.192
Naujan, Mindoro Oriental Puerto Princesa, Palawan Palawan Palawan Malinao, Albay Malinao, Albay Malinao, Albay Virac, Catanduanes Caramoran, Catanduanes Caramoran, Catanduanes San Miguel, Catanduanes Catanduanes Antique Madalag, Aklan Libacao, Aklan Igbaras, Iloilo Negros Oriental Negros Oriental Negros Oriental Samar Eastern Samar Josena, Zamboanga del Sur Zamboanga del Norte Zamboanga del Norte Zamboanga del Norte Saguiaran, Lanao del Norte Sumilao, Bukidnon Claveria, Misamis Oriental Davao City Davao City
8.00 160.90 6.80 3.50 0.80 0.20 0.10 0.20 3.20 1.50 1.60 2.30 3.00 8.00 23.50 41.00 4.00 17.80 5.40 33.00 1.00 4.00 369.80 6.00 3.80 3.60 4.40 225.00 68.00 8.00 5.50 34.50
2011 0.542 2011 2014 2014 2010 2010 2010 2010 2010 2010 2010 2010 2012 2012 2012 2013 2013 2013 2013 2014 2014 2010 2013 2013 2013 2011 2012 2010 2011 2010 0.457 0.457
0.538 3.248
0.009 0.004 0.009 0.143 0.067 0.072 0.103 0.134 0.358 1.053 1.837
2.173 0.269
19.029
15.120 3.046 0.358 0.370 1.546
Talaingod, Davao del Norte Magpet, North Cotabato
1.00 10.00 1,025.10
2012 2012 0.013 2.899 2.912
0.045 0.448 0.457 52.248 52.705
The implementation of the NGVPPT requires a total investment of PhP 14.34 billion for the acquisition of CNG buses for the period 2007-2014. Under the pilot phase implementation program, four out of seven accredited bus companies have acquired CNGfuelled units while the Shell Group of Companies has already put up the CNG mother and daughter refueling stations in Tabangao, Batangas and along South Expressway (northbound) in Brgy. Sto. Tomas, Bian, Laguna, respectively. Meanwhile, the total investments for biodiesel requires PhP 2.60 billion primarily for the expansion or construction of biodiesel facilities and the establishment of CME blend refueling
stations. Investment in the bioethanol sector requires a total of PhP 19.84 billion from 2007 to 2014. At present, San Carlos Bio-energy in San Carlos City, Negros Occidental is taking the lead in ethanol production. In addition, several companies such as JG Summit Holdings, Inc., Biofuels 88 Corporation, Leyte Agri Corporation and South Bukidnon Bioenergy, Inc. are expected to come on stream within the planning period. On the other hand, jatropha facilities such as nursery, plantation and refinery would entail a total of PhP 46.44 billion.
Table 45. HYDROPOWER INVESTMENT REQUIREMENTS (Billion PhP)
Table 46. BIOMASS INVESTMENT REQUIREMENTS (Billion PhP)

Potential Capacity (MW) Northern Luzon Agribusiness Quadrangle 38.00 I Ricehull Cogeneration Calasiao, Pangasinan 9.90 II Ricehull Cogeneration Gamu, Isabela 0.80 Ricehull Cogeneration Isabela 9.90 III Ricehull Cogeneration San Jose City, Nueva Ecija 9.90 Ricehull Cogeneration Quezon, Nueva Ecija 2.50 Ricehull Cogeneration Talavera, Nueva Ecija 2.50 Ricehull Cogeneration Muoz, Nueva Ecija 2.50 Metro Luzon Urban Beltway 28.70 III Ricehull Cogeneration Bocaue, Bulacan 15.00 IV-B Ricehull Cogeneration Mindoro Occidental 3.70 Ricehull Cogeneration Mindoro Oriental 10.00 Central Philippines 102.00 IV-B Ricehull Cogeneration Narra, Palawan 2.50 V Ricehull Cogeneration Pili, Camarines Sur 5.00 VI Ricehull Cogeneration Panay 25.00 Bagasse Cogeneration Kabangkalan, Negros Occidental 12.00 Bagasse Cogeneration Victorias, Negros Occidental 50.00 Ricehull Cogeneration Pototan, Iloilo 5.00 VII Ricehull Cogeneration Bohol 2.50 Mindanao Agribusiness 15.20 X Ricehull Cogeneration Cagayan de Oro City 10.00 XII Ricehull Cogeneration Surallah, South Cotabato 5.20 Total 183.90 Region Project Location Year Available 2014 2014 2014 2014 2014 2014 2014 2009 2014 2010 2014 2014 2010 2010 2013 2014 2014 2010 2014 0.638 0.638 0.638 1.384 0.958 0.426 1.575 2007 2008 2010 2014
1.064 0.511
0.426 0.426 3.385
Table 47. WIND INVESTMENT REQUIREMENTS (Billion PhP)

Region Location Potential Capacity (MW) 333.00 40.00 46.00 40.00 57.00 40.00 25.00 35.00 50.00 113.40 50.00 25.00 5.00 3.40 10.00 20.00 95.10 1.70 3.40 5.00 5.00 30.00 20.00 20.00 10.00 15.00 15.00 556.50 Year Available 2009 2010 2014 2014 2014 2014 2014 2014 2013 2013 2013 2009 2014 2013 2009 2009 2012 2009 2010 2010 2010 2012 2011 1.792 3.293 2007 1.792 1.792 2008 2.688 2.688 2010 3.091 3.091 2.688 3.830 2.688 1.680 2.352 3.360 0.672 2014 16.598
Northern Luzon Agribusiness Quadrangle I Burgos Ilocos Norte (Phase 1) Burgos Ilocos Norte (Phase 2) Pagudpod, Ilocos Norte Pasuquin, Ilocos Norte Suyo, Ilocos Sur Western Pangasinan Eastern Pangasinan III Carranglan, Nueva Ecija Metro Luzon Urban Beltway IV-A Mauban, Quezon Caliraya, Laguna IV-B Sta. Cruz, Marinduque Marinduque Abra de Ilog, Occidental Mindoro Puerto Galera, Oriental Mindoro Central Philippines IV-B Romblon Tablas Island, Romblon Tablas Island, Romblon V Baleno, Masbate VI San Carlos, Negros Occidental Pandan, Antique San Remigio, Antique Manoc-manoc, Aklan Mindanao Agribusiness CARAGA Nuventa, Surigao del Sur Total
0.152
0.152 0.672 0.452 0.076 0.152 0.224 2.016 1.344 1.344 1.008 1.008 8.803 4.704
17.270
69
Note: Government investment for wind is a commitment of PNOC-EDC, which was privatized in November 2007.
Project
Location
Compressed Natural Gas Natural Gas Vehicle Program for Public Transport (NGVPPT) Metro Manila, Acquisition of OEM CNG-fed buses Batangas, Laguna Biodiesel Expansion/construction of biodiesel facilities Metro Manila Establishment of CME blend refuelling station Nationwide Bioethanol Establishment of bioethanol facilities Nationwide Jatropha Nursery Nationwide Plantation Nationwide Renery Nationwide Government-Private Total
2007 2008 2010 2014 Year Available Govt Private Govt Private Govt Private Govt Private 0.099 0.215 1.344 4.480 2007 2006 0.099 0.650 0.650 0.945 0.945 1.586 0.215 1.300 1.300 1.344 4.480 0.650 0.650 1.890 1.890 0.705 0.025 8.586 0.680 17.086
2006 2007 0.760 0.080
0.680 1.586 0.760 3.280 4.040
7.000 15.500 0.680 1.586 0.680 1.586 0.705 10.101 0.680 18.430 10.806 19.110
7.020 7.020
ENERGY EFFICIENCY AND CONSERVATION

The energy sector will continue to undertake an aggressive campaign to promote energy efficiency and conservation. The DOE has lined up several activities which will require PhP 48.69 billion in capital investments as shown in Table 49 (Annex A.1.29). From this amount, PhP 43.77 billion will be sourced from private investors while the remaining PhP 4.92 billion will come from the government. Activities on energy labeling and efficiency standards will constitute the biggest share at PhP 29.72 billion, followed by the energy management programs at PhP 16.10 billion. Meanwhile, the continuing IEC campaign will entail PhP 622.0 million. On the other hand, the government enercon program will need PhP 2.25 billion while the voluntary agreement program will require PhP 1.40 million.
Transmission Development
Table 51 (Annex A.1. 28) indicates that transmission projects require a total capital investment of PhP 20.58 billion. Of this amount, about PhP 8.15 billion will be utilized for the Luzon grid, while PhP 4.27 billion and PhP 8.16 billion are needed for the Visayas and Mindanao grids, respectively. The total investment will cover the expansion of sub-transmission lines, transmission projects associated with generating plants and other projects.
EXPANDED RURAL ELECTRIFICATION

The attainment of the governments target of 100 percent level barangay electrification by 2009 would entail PhP 4.23 billion as indicated in Table 52 (Annex A.1. 30). The electrification of the remaining 2,054 unenergized barangays in the country will be implemented by the DOE and its partners coming from other line agencies, NGOs and private companies. Of the total investment required, the private sector has committed to provide PhP 2.10 billion and the remaining amount of about PhP 2.13 billion will be borne by the government. The energization of 892 barangays in 2007 will require PhP 1.60 billion, and PhP 2.64 billion will be needed for the electrification of the remaining 1,162 unenergized barangays in the ensuing years of the planning horizon.
POWER AND TRANSMISSION DEVELOPMENT

In line with the power sectors objective to provide reliable, adequate and quality supply of electricity in the main grid, a total investment of PhP 505.63 billion, which includes committed power generation projects, will be required from both the government and private sectors.
Power Generation
Based on the demand forecasts, a total of 4,472.50 MW indicative generation projects for the main grid will require a total investment of PhP 399.49 billion for the entire planning period. Table 50 (Annex A.1. 27) shows the investment requirements for the indicative power plants to be distributed as follows: for Luzon PhP 246.39 billion, for Visayas PhP 71.49 billion and for Mindanao,PhP 81.61 billion. On the other hand, PhP 85.56 billion would be infused for committed projects disaggregated as follows: PhP 49.64 billion for Luzon, PhP 20.49 billion for Visayas and PhP 15.42 billion for Mindanao.
DOWNSTREAM
The total investment requirement for the downstream sector stands at PhP 209.65 billion for the planning period (Please refer to Annex A.1.31).
Oil
Based on the activities undertaken by the oil companies, it is projected that the total investment required for the downstream oil would require PhP 10.39 billion. These activities include refining, liquefied fuel bulk marketing, LPG bulk marketing, bunkering,
Table 48. ALTERNATIVE FUELS INVESTMENT REQUIREMENTS (Billion PhP)
Table 49. ENERGY EFFICIENCY AND CONSERVATION INVESTMENT REQUIREMENTS (Billion PhP)
Efciency Programs Information, Education And Communication Campaign Road Transport Patrol Fuel Economy Run and Seminars Infocommercials/Publications/Collaterals for Fuel Efciency and Conservation Power Patrol Voluntary Agreements Program Carless Day Program Carpooling Program Park and Wait Program Park and Ride Program Energy Labeling And Efciency Standards Efciency Standard and Labeling for RACs Energy Labeling Program for Refrigerators and Freezers Labeling for CFLs Ballast loss std. and Labeling for Flourescent Lamp Ballast Luminaire Installation Linear Flourescent Lamp Household Electric Fans Television Stand-by Power Reduction Performance Certication of Fans and Blowers Labeling of Electric Motors Government Enercon Program Fuel Conservation Electricity Conservation Energy Management Program Energy Audit Program Cement Sugar Steel Industry Chemical Semiconductor Pulp and Paper Glass Commercial/Institutional Food Industry Mining Industry Heat Rate Improvement of Power Plants System Loss Reductiion Program Private Utilities (PUs and LGU owned) Electric Cooperatives (RECs) Demand Side Management Government - Private Total 2007 Govt 0.016 0.003 0.001 0.008 0.004 Private 0.050 0.050 Govt 0.026 0.011 0.001 0.010 0.004 0.000 0.000 0.000 0.000 0.000 0.080 0.012 0.007 0.045 0.003 0.001 0.003 0.001 0.004 0.002 0.001 0.282 0.107 0.174 0.100 2008 Private 0.050 0.050 Govt 0.030 0.015 0.001 0.010 0.004 0.000 0.000 0.000 0.000 0.000 0.116 0.016 0.009 0.069 0.006 0.001 0.005 0.002 0.005 0.002 0.001 0.282 0.107 0.174 0.200 2010 Private 0.050 0.050 Govt 0.030 0.015 0.001 0.010 0.004 0.000 0.000 0.000 0.000 0.000 0.204 0.019 0.012 0.128 0.012 0.002 0.012 0.002 0.013 0.002 0.002 0.282 0.107 0.174 0.200 2014 Private 0.050 0.050
0.059 0.011 0.006 0.034 0.003 0.001 0.002 0.001 0.002 0.282 0.107 0.174 0.100
1.636 0.307 0.158 0.934 0.076 0.015 0.061 0.037 0.049
2.206 0.335 0.198 1.253 0.079 0.020 0.081 0.039 0.119 0.050 0.031
3.203 0.436 0.252 1.908 0.175 0.034 0.129 0.043 0.139 0.053 0.034
5.635 0.537 0.334 3.517 0.319 0.068 0.335 0.052 0.371 0.060 0.042
1.400 1.000 0.200 0.200 0.100 0.025 0.025 0.100 0.050 0.100 0.050 0.150 0.400 0.400
1.500 1.000 0.200 0.200 0.100 0.025 0.025 0.100 0.050 0.100 0.050 0.150 0.400 0.400 0.100 3.756 4.244
0.100 0.100 0.457
0.100 0.100
0.100 0.100 0.100 0.628
1.950 1.000 0.200 0.200 0.100 0.025 0.025 0.100 0.050 0.100 0.050 0.150 0.400 0.400 0.400 0.150 5.203
0.100 0.100 0.100 0.716
2.000 1.000 0.200 0.200 0.100 0.025 0.025 0.100 0.050 0.100 0.050 0.150 0.400 0.400 0.400 0.200 7.685 8.401
3.086 3.543
0.488
5.831
and retail marketing of petroleum products, alternative fuels and lubes.
Natural Gas
The PhP 199.26 billion investment in the natural gas industry is required for the establishment of the infrastructure and related facilities. Significant portion of the investment amounting to PhP 147.26 billion will be required in the construction of power plants while the construction of LNG receiving terminals for the bulk receipt and storage of liquefied natural gas will require PhP 35.28 billion. Another major component is the
installation of distribution pipelines which would entail PhP 16.64 billion. On the other hand, installation of refilling stations would need Php 0.08 billion.
Specific Guidelines on the Implementation of the 2007 Investment Priorities Plan in the Energy Sector
Generally, under Book I of E.O. 226 or the Omnibus Investments Code of 1987, a qualified 1987 enterprise may enjoy certain benefits and incentives provided it invests in preferred areas of investments enumerated in the Investment Priorities Plan (IPP). The
71
Project Luzon Bulacan Biomass-to-energy Project Burgos Wind Power Project Phase I (formerly Northern Luzon Wind Power Project Phase I) Ilijan CCGT Expansion Burgos Wind Power Project Phase II 2nd Phase CFB Coal-Fired Power Plant 2 x 150 MW Coal Fired Power Plant San Gabriel Power Plant Kalayaan Pumped Storage Power Plant III (CBK Expansion) Tanawon Geothermal Project Rangas Geothermal Project Manito-Kayabon Geothermal Project Balintingon River Multi-Purpose Project Pagbilao Expansion Pantabangan Expansion 2 x 150 MW CCGT Power Station Quezon Power Expansion Project Visayas Panay Biomass Power Project Coal-Fired Plant Toledo Expansion Project Phase I 2 x 82 MW Toledo Expansion Project Phase II 1 x 82 MW GBPC Coal-Fired Plant (Panay Power Corp.) 2 x 82 Dauin Geothermal Aklan Hydropower Project Villasiga HEP Mindanao Cagayan de Oro Biomass Power Project Cabulig Hydro Tamugan AB, Panigan and Suawan Hydroelectric Power Agus 3 Hydroelectric SM 200 MW CFBB CFTPP Sultan Kudarat Coal Tagoloan Hydropower Total
Location Bocaue, Bulacan Saoit, Burgos, Ilocos Norte
Capacity Year (MW) Available 3103.00 15.00 2009 40.00 2009
2007 7.806 0.638 1.792
2008 24.775 0.958 2.688
2010 55.558
2014 60.648
Ilijan, Batangas City Nagsurot, Burgos, Ilocos Norte Mabalacat, Pampanga Subic Sta. Rita, Batangas Kalayaan, Laguna Bacman Geothermal Field, Sorsogon Bacman Geothermal Field, Sorsogon Bacman Geothermal Field, Sorsogon General Tinio, Nueva Ecija Pagbilao, Quezon Pantabangan, Nueva Ecija Quezon Province Mauban, Quezon Panay Brgy. Nipa, Concepcion, Iloilo Toledo City, Cebu Toledo City, Cebu Iloilo, Panay Island Dauin, Negros Oriental Libacao, Aklan Sibalom, Antique Cagayan de Oro City Plaridel, Jasaan, Misamis Oriental Baguio District, Davao City Lanao del Norte Southern Mindanao Sultan Kudarat Bukidnon
300.00 46.00 50.00 300.00 550.00 360.00 40.00 40.00 40.00 44.00 400.00 78.00 300.00 500.00 624.00 25.00 100.00 164.00 82.00 164.00 40.00 41.00 8.00 745.50 10.00 8.00 34.50 225.00 200.00 200.00 68.00 4472.50
2009 2010 2010 2010 2011 2011 2011 2013 2013 2013 2014 2014 2014 2014
5.376
8.064 3.091 2.397 9.744 26.796 24.192 0.555 0.370 0.555 0.370 0.555 19.488 8.736 8.064 24.360
0.444 2010 2010 2010 2011 2011 2011 2012 2012 2010 2010 2010 2011 2011 2011 2012 8.250 0.444
14.163 1.064 4.794 7.862
19.969
5.896 11.792 0.444 0.444 1.837 43.948
2.330 0.426 0.358 1.546
41.267
15.120 13.440 12.342 3.046 119.475
60.648
IPP is issued annually by the Board of Investments (BOI) and contains the list of areas of investments eligible for government incentives. The 2007 IPP was approved under Memorandum Order No. 247 and signed by President G.M. Arroyo on 13 June 2007. Energy is listed as one of the preferred activities and covers power generation using renewable and other energy source employing environmentallyfriendly technologies (except oil-fired power generating plants), power transmission, and activities using energy technologies leading to energy efficiency and conservation such as production, blending, storage, and handling of biofuels, CNG vehicle conversion shops, and CNG refueling stations.
Specific Guidelines
1. Power generation projects as specified in the Power Development Plan that may qualify for registration are: a. Those utilizing indigenous, and renewable energy such as biomass, waste-to-energy conversion, solar, wind, hydro and tidal; b. Geothermal power plants; c. Those listed under the NPC privatization plan; d. Coal-fired power plant using environmentfriendly technology; e. Those using CNG/LNG; f. Cogeneration (CHP) plants involving waste to
Table 50. POWER GENERATION INVESTMENT REQUIREMENTS (Billion PhP)
Table 51. TRANSMISSION DEVELOPMENT INVESTMENT REQUIREMENTS (Billion PhP)

Project Luzon Grid ON-GOING PROJECTS Batangas Transmission Reinforcement Project Bian - Sucat 230 kV T/L Hermosa - Balintawak 230 kV T/L Relocation Luzon S/S Expansion Project - 1 Luzon (North) T/L Upgrading Projects - 1 New Gamu 230 kV S/S Project Tap Hermosa - Balintawak T/L & S/S Projects (Package 1 & 2) PROJECTS FOR IMPLEMENTATION Binga - San Manuel 230 kV T/L Project Dasmarias - Rosario 230 kV T/L Luzon Mindoro Interconnection Luzon Power Circuit Breaker Replacement Project Luzon Substation Expansion Project - 2 Luzon Substation Expansion Project - 3 Luzon Transmission Equipment Upgrade Luzon Voltage Improvement Project - 1 Luzon Voltage Improvement Project - 2 San Jose 500 kV Reconguration San Jose - Balintawak Line 3 Visayas Grid ON-GOING PROJECTS Cebu - Negros Interconnection Uprating Project Cebu III Transmission (100 MVA Quiot SS) Leyte - Samar Reinforcement Project Negros V Transmission Project Negros - Panay Interconnection Uprating Project Northern Panay Backbone Project Visayas Capacitor Project -1 Wright - Calbayog 138 kV Transmission Line Project PROJECTS FOR IMPLEMENTATION Bohol Backbone Project New Naga S/S Project Visayas Power Circuit Breaker Replacement Program Southern Panay Backbone Transmission Project Mindanao Grid ON-GOING PROJECTS Abaga Kirahon 230 kV T/L Project Gen. Santos - Tacurong Trans. Project Kirahon - Pulangui (Maramag) 230 kV T/L Pulangui (Maramag) - Bunawan 230 kV T/L Mindanao Sub-station Expansion - 2005 Mindanao Substransmission Line San Francisco 138 kV S/S Project Zamboanga City Area 138 kV T/L PROJECTS FOR IMPLEMENTATION Aurora - Pulanco 138 kV T/L Mindanao Mobile Transformer Project Mindanao Reliability Compliance Project - Phase 1 Mindanao Power Circuit Breaker Replacement Program Total Expected Time of Completion 2007 2.56 2009 2009 2008 2009 2007 2008 2007 2010 2009 2013 2011 2011 2013 2009 2009 2011 2013 2013 0.4288 0.3686 0.1006 1.0153 0.1145 0.0202 0.0029 0.0080 0.0480 2008 2.73 0.1366 0.0561 0.0099 0.5244 0.0163 0.0009 0.6730 0.2053 0.0003 0.3425 0.0006 0.0016 0.0462 0.0020 2010 1.72 0.0002 0.0022 1.3020 0.0045 2014 -
0.3096 0.1454
0.7295 0.3737 0.0001
2.50 2008 2007 2007 2008 2008 2009 2008 2008 2010 2010 2010 2010 4.31 2008 2008 2009 2009 2008 2007 2008 2008 2009 2009 2012 2010 1.6546 0.4460 0.1868 1.2464 0.1161 0.0032 0.0618 0.3967 0.1995 0.4430 0.0778 0.0063 0.0394 0.5135 0.7321 0.1517 0.5336
0.93 0.1449 0.0213 0.005 0.0400 0.1586 0.3977 0.0252 0.1058 0.0200 0.0064 0.0055 0.0008 2.00 0.0491 0.0308 0.7234 0.0809 0.0022 0.0090 0.3684 0.7006 0.0147 0.0163 5.65
0.0200 0.0014 0.0005 0.58 0.0008 0.0008 0.0001 0.0027 0.0047 0.0040 0.0681 0.3030 0.1453 0.0536 0.25 0.0030 0.0015 0.0104 0.0054
0.0001 0.0063 0.0662 0.1548 2.55
9.37
73
Fund Source/ Implementing Agency NEA/ECs DOE Barangay Electrication Program Energy Regulation 1-94 Remote Area Electrication (inc. SPUG) PGMA Priority Areas (SC 38) DOE-Winrock AMORE Solar Energy for Rural Electrication and Development (SERED) DOE-NEA DAR/Solar Power Technology Support (SPOTS) PNOC-EDC IPPs MIRANT - Grid (next 500) - Grid (Beacon) - Mirant/Amore 2 - Mirant/DOE - Sustainable Solar Market Package (SSMS) KEPCO Luzon Hydro Philippine Rural Electricity Services (PRES) Private Investor-Owned Utilities (PIOUs) Cotabato Light & Power Government Private Total
2007 No. of Brgys 301 125 48 28 2 25 21 1 Govt. 0.500 0.179 0.048 0.056 0.004 0.050 0.021 Private 0.022 No. of Brgys 160 556 20 22 118 186
2008 Govt. 0.320 1.112 0.040 0.044 0.236 0.372 Private
Total Govt. 0.820 1.291 Private 0.022 Total 0.820 1.313
0.021 0.001 210 12 38 300 0.420 0.012 0.076 0.300
9 29 395 106 1 54 53 180 1 32 1 1 892 892
0.009 0.058 0.556 0.212 0.002 0.108 0.053 0.180 0.001 0.272 0.002 0.002 0.910
0.021 0.134 0.856 0.212 0.002 0.108 0.053 0.480 0.001 1.088 0.002 0.002 2.132 2.102 4.234
0.021 0.134 0.856
300 96
0.300 0.816
1.088 0.002 4.234
0.688 1.598
1,162 1,162
1.444 1.192 2.636
heat recovery producing electrical energy and other forms of useful thermal energy such as heat or steam used for industrial, commercial, heating or cooling purposes; or, g. Power plants using other energy sources (except oil-fired power generating plants) using environment-friendly technologies. 2. Activities using energy technologies leading to energy efficiency and conservation such as: a. Production of biofuels. Production may be integrated with blending, storage and handling. Activities involving either or a combination of blending, storage, handling and/or distribution of biofuels are not entitled to income tax holiday (ITH). b. Conversion shops providing all of the following services: converting, retrofitting, repairing and maintaining CNG Vehicles in accordance with relevant PNS and shall provide warranties to clients; Projects costing at least the PhP equivalent of US$200,000 may qualify for registration. c. Installation and operation of CNG refueling stations and related infrastructures and facilities as endorsed by the DOE. Foreign-owned corporations must comply with the Retail Trade Law (R.A.8762).
Table 53. NATURAL GAS INDUSTRY INVESTMENT REQUIREMENTS (Billion PhP)

Activities Power Plant LNG Terminal Pipelines Relling Stations Total 2007 2008 2010 13.83 4.56 18.39 0.02 16.62 2014 16.60
Applications for registration endorsed by the DOE shall include the projects compliance with existing environmental standards. Exploration, development and utilization of energy sources including coal are covered under the Industry Cluster of the IPP. If availing of incentives under P.D. 972, the project is not entitled to ITH. The following may qualify for pioneer status:
Power generation projects using renewable energy sources; or Power projects that cost at least the PhP equivalent of US$ 1 million per megawatt.
Table 52. BARANGAY ELECTRIFICATION INVESTMENT REQUIREMENTS (Billion PhP)
Other Guidelines Related to the Energy Sector

Aside from the specific guidelines under the energy sector, the 2007 IPP also includes the following energyrelated provisions that are covered by other priority areas:
Authority to Operate Pipeline System with the DOE and/or appropriate government agency. 3. Transport Systems
Motor Vehicle Products Manufacture of Alternative Fuel Vehicle (item if under Motor Vehicle Products) Alternative fuel vehicle covers the manufacture of the following brand new vehicles powered by alternative sources as classified accordingly under Section 1 of E.O. 156 (passenger cars, commercial vehicles and motorcycles):
This covers the operation of tourist buses, public utility buses, public utility articulated buses including buses using CNG/LPG. The following registration: are the requirements for
Hybrid vehicles - vehicles that run on electric batteries and gasoline/diesel/other fuels; Electric vehicles - vehicles that run solely on electric power; Flexible-fuel vehicles-vehicles that run on gasoline /diesel in combination with alternative fuels such as but not limited to:
Buses must be brand new and suited to local conditions Retrofitted/re-powered buses with brand new engines using CNG/LPG Operators must have their own terminals and garage that can accommodate the total number of buses under their franchises Operators must undertake to operate within the franchise routes
For tourist buses operation, the company must be accredited with and correspondingly endorsed by the Department of Tourism (DOT).

1.
Bioethanol vehicles that run on gasoline and a minimum ethanol content/blend of at least 20.0 percent Biodiesel vehicles that run on diesel and a minimum biodiesel blend/content at least 10.0 percent
Mandatory Inclusions
All projects covered under this category shall only be entitled to the incentives provided for under their respective laws. R.A. 8479, otherwise known as Oil Industry Deregulation Law is included under this category. Refining, Storage, Marketing and Distribution of Petroleum Products under R.A. 8479 This covers activities under the downstream oil industry, specifically refining, storage, distribution and marketing of petroleum products. 1. Refinery refers to oil refining, oil processing and oil movements and storage within the refinery, defined as follows:
CNG Vehicles - vehicles that run on CNG
Infrastructure Physical infrastructure
An agricultural business park should have a minimum contiguous area of 5 hectares for nonbiofuel crops and 3,000 hectares for biofuel crops that takes the form of an agro-industrial estate wherein the locators will be agricultural producers, agribusiness enterprises and support service enterprises/institutions. The developer should provide basic facilities such as but not limited to roads and drainage system, water and sewerage system, power supply system, and telecommunications system. 2. Logistics
75
Pipeline Operations (item 3 under passenger and/or cargo terminals, and intermodal terminals) covers the establishment of infrastructure for transport of petroleum products, natural gas, petrochemicals, and similar products. Application must include proof of filing of an application for
Oil refining refers and covers the manufacturing of local petroleum products through distillation, conversion and treatment of crude oil and other naturally occurring petroleum hydrocarbons. Oil processing refers to and covers the activity of manufacturing local petroleum products with or without the use of the distillation process. Oil movement and storage cover receiving/ discharging and storing petroleum within the refinery intended for refining and/or processing and eventual distribution purposes.
Investments in oil movement and storage shall include expansion, modification and modernization of facilities in the refinery resulting in an increase in existing capacity for storage, handling and distribution in the refinery. 2. Storage refers to the business of receiving/ discharging and storing petroleum crudes and/or products of others for compensation or profit. 3. Distribution refers to the bunkering and fuels shipping and transport. Fuels shipping and transport cover shipping and transport land such as tank trucks, lorries and pipeline and tankers, and barges for the fuels to get to the points or areas where they are needed. Bunkering covers the activity of selling fuel for direct use by a vessel, usually for water and air transport, through the use of a smaller transport vessel. Distribution projects are limited to those utilizing brand new equipment and double-hulled vessels. 4. Marketing covers the following:
LPG refilling and marketing which is a combination of storage, distribution, and marketing activities may also be eligible for registration. For storage, marketing and distribution, only investments of new industry participants may be entitled to incentives. The applicant shall submit an endorsement from the DOE certifying that the applicant is a new industry participant with new investments. Except for availment of incentive on duty of 3.0 percent on imported capital equipment, a DOE certification on actual new investments of the registered enterprise shall be required in the application for incentives. Said investments shall be validated through an ocular inspection by the DOE. Incentives shall be available for a period of five years from the date of registration except ITH, which shall be reckoned from date of commercial operation. This date shall refer to the scheduled start of commercial operation as indicated in the firms specific registration terms and conditions based on the following:
Retailing of petroleum products which refers to selling of petroleum products or fuels in retail generally directed to the end users, through dispensing pumps in gasoline stations or in packaged containers such as drums for the liquid fuels or metal cylinders for LPG. This includes the establishment and operation of gasoline stations and LPG retailing. For gasoline retailing stations, except those locating in Less Developed Areas (LDAs) listed in the IPP, the applicant shall be required to invest a minimum capital of PhP10 million per station, excluding land, or such amount as may be determined jointly by BOI and DOE for augmentation purposes, as the need arises. Provided, that foreign retailers shall comply with the requirements provided under R.A. 8762, otherwise known as the Retail Trade Liberalization Law, and its implementing rules and regulations.
For refineries, it will be the date when the registered enterprise actually first began production of the registered product for commercial purposes. In cases of expansion, modification and rehabilitation of refineries, the start of commercial operation shall be the date after the scheduled completion of the said activities. For storage, it will be the date when the registered enterprise actually first received the registered product for storage. For distribution, it will be the date when the registered enterprise actually first transferred the registered product for distribution. For marketing, it will be the date when the registered enterprise actually first sold the registered product. For combinations involving storage, distribution, and marketing, it will be the date referred to in marketing; provided no separate transactions for either storage or distribution is undertaken, otherwise, it will be the earliest date of commercial operation, as defined, among the combined registered activities. Activities covered under d.4. Marketing are entitled to capital equipment incentive only. ITH shall be applicable to income derived from the activity covered by the registration reckoned
Fuels bulk marketing covers the selling of petroleum products or fuels in wholesale through tank trucks, lorries, double-hulled vessels / tankers, barges or pipelines, which may be sourced from ones own storage facilities. Investment shall include underground tanks and other equipment intended
Investments in oil refining and/or oil processing shall include expansion, modification and modernization of a refinery, resulting in an increase in existing volume of production, and/ or improvement in the quality of petroleum products in conformance with the PNS, the CAA, and other applicable laws and regulation.
for fuels retailing through outlets such as gasoline stations and LPG outlets.
five years from date of commercial operation; Provided that in case of gasoline retailing stations, except those locating in LDAs, the incentive shall be available only to those with minimum capital requirement, excluding land, of PhP 20 million or such amount as may be determined jointly by BOI and DOE for augmentation purposes, as the need arises. Availment of ITH incentive shall be based on new investments made. New investments should account for at least 20.0 percent of the total investments (inclusive of equipment and plant facilities at acquisition cost) or a minimum of PhP equivalent of US$ 2 million, whichever is lower.
77
Energy Demand and Supply Outlook

A.1.1 A.1.2a A.1.2b A.1.3a A.1.3b A.1.4 A.1.5 A.1.6 A.1.7 A.1.8
Overall Energy Balance (In Million Barrels of Fuel Oil Equivalent, MMBFOE and Thousand Tonnes of Oil Equivalent, KTOE) Oil Demand Outlook by Sector (In Thousand Barrels, MB) Oil Demand Outlook by Product (In Thousand Barrels, MB) Natural Gas Demand Outlook (In Billion Cubic Feet, BCF) Coal Demand and Supply Outlook (In Thousand Metric Tons, MMT) Biofuels Demand (In Million Liters) Oil and Gas Sector Targets Coal Sector Targets Geothermal Sector Targets
Energy Resource Development Outlook
Energy Efficiency Outlook
Potential Cumulative Savings from Energy Efficiency Programs (In Million Barrels of Fuel Oil Equivalent, MMBFOE) Cumulative Installed Capacity (In Megawatts, MW) System Peak Demand, Main Grid (In Megawatts, MW) Peak Demand, Small Island Grids (In Kilowatts, kW) Indicative Power Plant Projects (In Megawatts, MW) Power Plant Retirement Schedule (In Megawatts, MW) List of Available Indigenous Resources for Indicative Capacity Additions (In Megawatts, MW) List of Transmission Lines Projects, Small Island Grids (In Kilometers, kms.) List of Substation Projects, Small Island Grids (In Megavolt Amperes, MVA) National and Local Government Shares from Energy Resources (In Million Pesos) Carbon Dioxide (CO2 ) Emissions from Energy (In Million Metric Tons, MMMT) Annual Investment Requirements by Sector (In Billion Pesos) Oil and Gas Investment Requirements (In Billion Pesos) Coal Investment Requirements (In Billion Pesos) Geothermal Investment Requirements (In Billion Pesos) Hydropower Investment Requirements (In Billion Pesos) Biomass Investment Requirements (In Billion Pesos) Wind Investment Requirements (In Billion Pesos) Alternative Fuels Investment Requirements (In Billion Pesos) Main Grid Indicative Projects Investment Requirements (In Billion Pesos) Power Generation Investment Requirements (In Billion Pesos) Transmission Development Investment Requirements (In Billion Pesos) Energy Efficiency and Conservation Investment Requirements (In Billion Pesos) Barangay Electrification Investment Requirements (In Billion Pesos) Downstream Industry Investment Requirements (In Billion Pesos)
Power Demand and Supply Outlook

A.1.9 A.1.10 A.1.11 A.1.12a A.1.12b A.1.13 A.1.14 A.1.15 A.1.16
Shares from Energy Resource
Carbon Dioxide Emissions and Avoidance

A.1.17
Investment Requirements
A.1.18 A.1.19 A.1.20 A.1.21 A.1.22 A.1.23 A.1.24 A.1.25 A.1.26 A.1.27 A.1.28 A.1.29 A.1.30 A.1.31
Annex A: ANNUAL TARGETS 78
Annex A: ANNUAL TARGETS
79
Annex A.1.1 OVERALL ENERGY BALANCE, 2007

Natural Gas 13.64 Coal 64.79 64.79 21.51 (64.79) (64.79) 9.21 2.16 31.85 0.39 8.41 43.23 (14.59) (14.59) (0.50) (0.50) 14.59 4.85 0.61 0.20 48.20 16.01 14.59 48.20 Geothermal Hydropower Biomass Electricity 13.64 4.53 (12.35) (12.35) 0.39 (38.74) (38.74) 8.41 12.95 33.02 45.96 15.26 Solar, Wind and Micro-hydro 0.61 CME and Ethanol 0.35 0.01 0.38 0.13 Total
FROM 2007 - 2014
(In Million Barrels of Fuel Oil Equivalent, MMBFOE)
Oil and Oil Products 17.13 95.85 112.97 37.51 (5.69)
0.01 0.04 0.32 0.00 0.37
Production Net Imports Total Primary Supply Share, in percent Oil Rening Transmission & Distribution Electricity Generation (12.21) Total Transformation (17.90) Industrial 13.53 Commercial 4.47 Transport 57.68 Residential 5.89 Agriculture 2.86 Final Energy Demand 84.43 Savings from Energy Efciency and Conservation Final Energy Demand with Savings Self-sufciency, in percent
(3.71) 36.73 33.02 10.29 10.28 0.04 12.41 0.00 33.02
172.27 128.88 301.16 100.00 (5.69) (3.71) (106.45) (115.85) 41.84 16.95 58.04 50.16 2.86 169.84 6.10 163.74 57.20
(In Thousand Tonnes of Oil Equivalent, kTOE)

Natural Gas 1,970.04 Coal 9,355.08 9,355.08 21.51 (9,355.08) (9,355.08) 2,107.49 2,107.49 4.85 (2,107.49) (2,107.49) Geothermal Hydropower 1,970.04 4.53 (1,782.91) (1,782.91) 56.68 (5,594.17) (5,594.17) 1,214.30 1,869.34 4,767.68 6,637.02 15.26 Solar, Wind and Micro-hydro 88.63 88.63 0.20 (72.29) (72.29) Biomass 6,960.71 6,960.71 16.01 CME and Ethanol 50.86 1.87 52.73 0.12 Electricity Total
Oil and Oil Products 2,473.00 13,840.52 16,313.52 37.52 (821.64)
1,330.57 311.74 0.00 0.00 4,599.77 6,242.08
1.41 5.40 45.73 0.18 52.72
Production Net Imports Total Primary Supply Share, in percent Oil Rening Transmission & Distribution Electricity Generation (1,762.92) Total Transformation (2,584.56) Industrial 1,953.16 Commercial 645.75 Transport 8,328.70 Residential 850.91 Agriculture 413.07 Final Energy Demand 12,191.59 Savings from Energy Efciency and Conservation Final Energy Demand with Savings Self-sufciency, in percent 56.68 1,214.30
(535.29) 5,303.36 4,768.07 1,485.19 1,484.11 6.17 1,792.18 0.41 4,768.06
24,875.16 18,610.07 43,485.23 100.00 (821.64) (535.29) (15,371.50) (16,728.43) 6,041.30 2,447.01 8,380.61 7,242.86 413.66 24,525.44 880.84 23,644.60 57.20

Natural Gas 14.52 Coal 66.98 66.98 21.58 (66.98) (66.98) 9.76 2.24 31.66 0.44 8.51 43.66 0.01 0.04 0.33 0.00 0.38 (14.95) (14.95) (0.50) (0.50) 14.95 4.82 0.62 0.20 48.69 15.69 14.95 48.69 Geothermal Hydropower Biomass Electricity 14.52 4.68 (13.14) (13.14) 0.44 (40.94) (40.94) 8.51 13.71 34.53 48.24 15.54 (3.86) 38.26 34.40 10.63 10.74 0.04 12.98 0.00 34.40 Solar, Wind and Micro-hydro 0.62 CME and Ethanol 0.34 0.04 0.38 0.12 Total 173.86 136.54 310.40 100.00 (5.69) (3.86) (110.22) (119.77) 43.44 17.81 59.92 50.70 2.93 174.80 6.77 168.03 56.01
Oil and Oil Products Production 14.06 Net Imports 101.97 Total Primary Supply 116.03 Share, in percent 37.38 Oil Rening (5.69) Transmission & Distribution Electricity Generation (11.97) Total Transformation (17.66) Industrial 14.08 Commercial 4.79 Transport 59.55 Residential 6.07 Agriculture 2.93 Final Energy Demand 87.42 Savings from Energy Efciency and Conservation Final Energy Demand with Savings Self-sufciency, in percent

Natural Gas 2,096.09 Coal 9,671.56 9,671.56 21.58 (9,671.56) (9,671.56) 2,158.89 4.82 (2,158.89) (2,158.89) 2,158.89 Geothermal Hydropower 2,096.09 4.68 (1,897.36) (1,897.36) 64.22 (5,911.09) (5,911.09) 1,228.73 1,979.99 4,986.29 6,966.28 15.54 Solar, Wind and Micro-hydro 89.29 89.29 0.20 (72.58) (72.58) Biomass 7,031.27 7,031.27 15.69 CME and Ethanol 49.08 5.62 54.70 0.12 Electricity Total
1,409.09 323.34 4,571.68
1.47 5.79 47.25 6,304.11 0.19 54.70
(557.03) 5,524.04 4,967.01 1,535.47 1,550.58 6.48 1,874.05 0.44 4,967.01
25,105.81 19,716.30 44,822.11 100.00 (821.64) (557.03) (15,915.51) (17,294.18) 6,272.16 2,571.40 8,652.61 7,321.65 423.76 25,241.59 977.95 24,263.64 56.01
80
81
Natural Gas 15.37 Coal 69.79 69.79 21.58 (69.79) (69.79) 10.33 2.32 31.47 0.50 8.61 44.12 (15.72) (15.72) (0.50) (0.50) 15.72 4.86 0.62 0.19 49.22 15.22 1.91 0.59 15.72 49.22 Geothermal Hydropower Biomass Electricity 15.37 4.75 (13.92) (13.92) 0.50 (43.24) (43.24) 8.61 15.12 35.51 50.63 15.65 Solar, Wind and Micro-hydro 0.62 CME and Ethanol 1.91 Total 0.02 0.08 1.81 0.00 1.91 (4.08) 40.42 36.34 11.12 11.39 0.05 13.79 0.00 36.34 179.72 143.75 323.47 100.00 (5.69) (4.08) (115.30) (125.07) 45.23 18.88 61.87 51.50 3.01 180.49 7.11 173.38 55.56 Natural Gas 2,219.97 Coal 10,077.48 10,077.48 21.58 (10,077.48) (10,077.48) 2,269.35 2,269.35 4.86 (2,269.35) (2,269.35) Geothermal Hydropower 2,219.97 4.75 (2,009.38) (2,009.38) 72.75 (6,243.25) (6,243.25) 1,243.33 2,183.96 5,127.00 7,310.95 15.65 Solar, Wind and Micro-hydro 89.95 89.95 0.19 (72.87) (72.87) Biomass 7,107.63 7,107.63 15.22 CME and Ethanol 276.29 276.29 0.59 Electricity Total 1,492.24 335.37 4,543.77 72.75 1,243.33 6,371.38 2.88 11.64 261.35 0.42 276.29 (589.20) 5,837.08 5,247.88 1,605.18 1,644.34 6.78 1,991.10 0.47 5,247.87 25,951.69 20,756.92 46,708.61 100.00 (821.64) (589.20) (16,649.53) (18,060.37) 6,531.55 2,726.82 8,933.43 7,436.53 434.12 26,062.45 1,026.85 25,035.60 55.56
Production Net Imports Total Primary Supply Share, in percent Oil Rening Transmission & Distribution Electricity Generation (1,814.28) Total Transformation (2,635.92) Industrial 2,115.18 Commercial 735.47 Transport 8,665.29 Residential 901.66 Agriculture 433.23 Final Energy Demand 12,850.82 Savings from Energy Efciency and Conservation Final Energy Demand with Savings Self-sufciency, in percent

Natural Gas 18.47 Coal 71.10 71.10 21.34 (71.10) (71.10) 10.94 2.41 31.27 0.57 8.71 44.63 0.02 0.09 1.89 0.00 2.00 (15.86) (15.86) (0.50) (0.50) 15.86 4.76 0.63 0.19 49.79 14.94 2.00 0.60 (4.29) 42.45 38.16 11.56 11.99 0.05 14.55 0.00 38.16 15.86 49.79 Geothermal Hydropower Biomass Electricity 18.47 5.54 (16.72) (16.72) 0.57 (46.67) (46.67) 8.71 16.86 37.29 54.16 16.25 Solar, Wind and Micro-hydro 0.63 CME and Ethanol 2.00 Total 197.21 135.97 333.18 100.00 (5.69) (4.29) (118.32) (128.30) 47.06 19.94 63.87 52.26 3.08 186.21 7.47 178.74 59.19

Natural Gas 2,667.74 Coal 10,266.68 10,266.68 21.34 (10,266.68) (10,266.68) 2,290.72 4.76 (2,290.72) (2,290.72) 2,290.72 Geothermal Hydropower 2,667.74 5.54 (2,414.32) (2,414.32) 82.42 (6,739.71) (6,739.71) 1,258.10 2,434.83 5,385.25 7,820.08 16.25 Solar, Wind and Micro-hydro 90.32 90.32 0.19 (72.87) (72.87) Biomass 7,190.13 7,190.13 14.94 CME and Ethanol 289.01 289.01 0.60 Electricity Total
1,580.31 347.84 4,516.03
3.02 12.63 272.93 6,444.18 0.43 289.01
(619.53) 6,129.39 5,509.87 1,669.78 1,730.79 7.09 2,101.71 0.50 5,509.87
28,477.31 19,634.57 48,111.88 100.00 (821.64) (619.53) (17,085.71) (18,526.87) 6,795.46 2,878.90 9,223.35 7,545.89 444.72 26,888.33 1,078.19 25,810.14 59.19
82
83
Natural Gas 20.99 Coal 72.26 72.26 20.97 (72.26) (72.26) 11.59 2.50 31.08 0.65 8.82 45.17 (15.89) (15.89) (0.50) (0.50) 15.89 4.61 0.63 0.18 50.41 14.63 3.34 0.97 15.89 50.41 Geothermal Hydropower Biomass Electricity 20.99 6.09 (18.92) (18.92) 0.65 (47.88) (47.88) 8.82 18.14 37.30 55.45 16.09 Solar, Wind and Micro-hydro 0.63 CME and Ethanol 3.34 Total 0.02 0.09 3.23 0.00 3.34 (4.52) 44.63 40.12 12.05 12.63 0.05 15.38 0.00 40.12 204.36 140.16 344.52 100.00 (5.69) (4.52) (121.51) (131.72) 49.00 21.06 65.95 53.08 3.16 192.24 7.84 184.40 59.32 Natural Gas 3,031.08 Coal 10,434.38 10,434.38 20.97 (10,434.38) (10,434.38) 2,294.72 4.61 (2,294.72) (2,294.72) 2,294.72 Geothermal Hydropower 3,031.08 6.09 (2,732.46) (2,732.46) 93.38 (6,913.43) (6,913.43) 1,273.05 2,619.93 5,386.73 8,006.66 16.09 Solar, Wind and Micro-hydro 90.69 90.69 0.18 (72.87) (72.87) Biomass 7,279.14 7,279.14 14.63 CME and Ethanol 482.48 482.48 0.97 Electricity Total 1,673.57 360.78 4,488.45 93.38 1,273.05 6,522.80 3.04 13.08 465.87 0.50 482.48 (652.27) 6,444.93 5,792.66 1,740.27 1,823.67 7.39 2,220.79 0.54 5,792.66 29,509.99 20,239.12 49,749.11 100.00 (821.64) (652.27) (17,545.81) (19,019.72) 7,075.48 3,041.66 9,522.66 7,664.68 455.59 27,760.06 1,132.10 26,627.96 59.32
Production Net Imports Total Primary Supply Share, in percent Oil Rening Transmission & Distribution Electricity Generation (1,542.88) Total Transformation (2,364.52) Industrial 2,292.17 Commercial 844.13 Transport 9,049.40 Residential 955.43 Agriculture 454.55 Final Energy Demand 13,595.68 Savings from Energy Efciency and Conservation Final Energy Demand with Savings Self-sufciency, in percent

Natural Gas 23.71 Coal 73.28 73.28 20.64 (73.28) (73.28) 12.27 2.59 30.89 0.73 0.50 8.92 45.76 0.02 0.10 3.38 0.00 3.50 (15.92) (15.92) (0.50) (0.50) 15.92 4.48 0.63 0.18 51.07 14.38 3.50 0.99 (4.76) 47.01 42.25 12.57 13.32 0.05 16.29 0.00 42.25 15.92 51.07 Geothermal Hydropower Biomass Electricity 23.71 6.68 (21.32) (21.32) 0.73 (49.48) (49.48) 8.92 20.49 36.65 57.15 16.09 Solar, Wind and Micro-hydro 0.63 CME and Ethanol 3.50 Total 212.97 142.15 355.12 100.00 (5.69) (4.76) (124.79) (135.24) 51.04 22.28 68.09 54.00 3.23 198.64 8.23 190.40 59.97

1,772.33 374.21 4,461.04
3.22 14.31 487.75 6,607.58 0.52 505.80
(687.99) 6,788.32 6,100.34 1,814.97 1,924.11 7.70 2,352.98 0.58 6,100.34
30,752.79 20,525.99 51,278.77 100.00 (821.64) (687.99) (18,019.15) (19,528.77) 7,370.54 3,216.52 9,831.68 7,797.54 466.72 28,682.99 1,188.70 27,494.29 59.97
84
85
Natural Gas 27.19 Coal 74.20 74.20 20.28 (74.20) (74.20) 13.00 2.69 30.71 0.83 9.03 46.39 (15.92) (15.92) (0.50) (0.50) 15.92 4.35 0.63 0.17 51.79 14.15 3.67 1.00 15.92 51.79 Geothermal Hydropower Biomass Electricity 27.19 7.43 (24.59) (24.59) 0.83 (50.88) (50.88) 9.03 21.07 37.56 58.63 16.02 Solar, Wind and Micro-hydro 0.63 CME and Ethanol 3.67 Total 0.02 0.11 3.54 0.00 3.67 (5.05) 49.69 44.64 13.18 14.11 0.06 17.29 0.00 44.64 216.42 149.55 365.98 100.00 (5.69) (5.05) (127.86) (138.60) 53.26 23.61 70.30 55.01 3.31 205.48 8.64 196.84 59.14 Natural Gas 3,925.56 Coal 10,714.74 10,714.74 20.28 (10,714.74) (10,714.74) 2,298.49 2,298.49 4.35 (2,298.49) (2,298.49) Geothermal Hydropower 3,925.56 7.43 (3,551.03) (3,551.03) 119.86 (7,346.50) (7,346.50) 1,303.48 3,042.14 5,423.81 8,465.95 16.02 Solar, Wind and Micro-hydro 91.44 91.44 0.17 (72.87) (72.87) Biomass 7,478.19 7,478.19 14.15 CME and Ethanol 530.26 530.26 1.00 Electricity Total 1,876.92 388.13 4,433.81 119.86 1,303.48 6,698.85 3.41 15.64 510.68 0.54 530.26 (728.88) 7,174.81 6,445.93 1,902.92 2,037.83 8.00 2,496.55 0.63 6,445.93 31,251.61 21,595.23 52,846.83 100.00 (821.64) (728.88) (18,463.11) (20,013.63) 7,690.37 3,409.49 10,150.71 7,942.77 478.13 29,671.47 1,248.14 28,423.33 59.14
Production Net Imports Total Primary Supply Share, in percent Oil Rening Transmission & Distribution Electricity Generation (1,654.29) Total Transformation (2,475.92) Industrial 2,483.77 Commercial 967.90 Transport 9,632.03 Residential 1,012.42 Agriculture 476.96 Final Energy Demand 14,573.08 Savings from Energy Efciency and Conservation Final Energy Demand with Savings Self-sufciency, in percent

Natural Gas 30.08 Geothermal 74.76 74.76 19.82 (74.76) (74.76) 13.77 2.79 30.52 0.94 9.13 47.07 0.03 0.12 3.70 0.00 3.85 (15.94) (15.94) (0.50) (0.50) 15.94 4.23 0.64 0.17 52.56 13.93 3.85 1.02 (5.32) 52.35 47.03 13.79 14.90 0.06 18.28 0.00 47.03 15.94 52.56 Hydropower Biomass Electricity 30.08 7.97 (27.34) (27.34) 0.94 (52.79) (52.79) 9.13 Coal 23.32 37.32 60.64 16.07 Solar, Wind and Micro-hydro 0.64 CME and Ethanol 3.85 Total 215.72 161.52 377.24 100.00 (5.69) (5.32) (131.27) (142.28) 55.56 24.98 72.58 56.01 3.39 212.52 9.08 203.45 57.18

1,987.69 402.56 4,406.73
3.62 17.06 534.69 6,796.98 0.56 555.93
Production Net Imports Total Primary Supply Share, in percent Oil Rening Transmission & Distribution Electricity Generation (1,773.47) Total Transformation (2,595.10) Industrial 2,585.49 Commercial 1,036.45 Transport 9,937.08 Residential 1,042.17 Agriculture 488.58 Final Energy Demand 15,089.78 Savings from Energy Efciency and Conservation Final Energy Demand with Savings Self-sufciency, in percent 135.80 1,318.97
(768.54) 7,559.14 6,790.60 1,991.14 2,151.55 8.31 2,638.94 0.67 6,790.61
31,150.12 23,323.89 54,474.01 100.00 (821.64) (768.54) (18,954.97) (20,545.14) 8,022.70 3,607.63 10,480.09 8,087.84 489.81 30,688.07 1,310.55 29,377.52 57.18
86
87
2008 12,747.00 12,092.14 71,417.44 18,698.28 6,877.79 3,008.29 124,840.95 126,382.50 3,081.56 7,402.70 19,466.85 20,250.27 7,922.80 3,154.83 131,323.66 73,796.31 76,142.84 12,502.08 12,916.91 10,133.00 10,936.00 2009 2010 2011 2012 11,565.00 13,336.70 78,541.24 21,091.65 8,479.76 3,228.10 136,242.46 2013 11,768.00 13,763.53 80,994.53 22,014.35 9,076.22 3,301.38 140,918.00 2014 12,634.00 14,194.89 83,524.04 22,982.33 9,714.99 3,374.66 146,424.90 6,408.95 2,935.02
Annex A.1.2a OIL DEMAND OUTLOOK By Sector
(In Thousand Barrels, MB)
2007
Power Generation
12,389.00
12,130.00
Residential
11,292.48
11,688.57
Transport
66,487.67
68,952.55
Industrial
17,212.90
17,904.15
Commercial
5,986.12
Agriculture
2,861.76
Total
116,229.94
120,019.24
Annex A.1.2b OIL DEMAND OUTLOOK By Product

2008 12,092.14 10,593.26 1,498.88 71,417.44 27,976.17 37,577.81 3,528.25 2,335.22 18,698.28 1,857.52 441.58 5,677.79 10,721.39 6,877.79 2,817.56 2,111.64 1,948.60 3,008.29 60.56 21.07 2,659.31 267.35 12,747.25 9,228.12 3,519.13 124,841.20 51,545.68 25,693.70 28,036.73 15,268.34 1,961.53 2,335.22 10,133.25 6,250.90 3,882.35 126,382.75 53,523.32 23,379.84 29,179.18 16,049.03 1,866.51 2,384.87 283.13 2,715.98 20.66 61.79 3,081.56 2,094.29 2,241.27 3,154.83 63.01 20.25 2,772.65 298.92 10,935.70 6,629.66 4,306.04 131,323.36 55,539.76 24,446.56 30,333.27 16,843.09 1,726.15 2,434.52 2,271.93 2,431.66 3,036.47 3,249.86 7,402.70 7,922.80 11,101.35 11,504.63 6,009.17 6,363.43 438.60 385.39 379.83 6,726.42 11,904.37 8,479.76 3,478.37 2,602.73 2,398.66 3,228.10 64.25 19.84 2,829.32 314.70 11,565.30 6,806.26 4,759.04 136,242.76 57,657.46 25,317.99 31,487.37 17,657.38 1,638.40 2,484.17 1,917.73 1,996.82 2,081.04 19,466.85 20,250.27 21,091.65 2,384.87 2,434.52 2,484.17 3,650.16 3,772.08 3,894.00 38,643.88 39,665.99 40,739.95 29,117.40 30,270.26 31,423.12 73,796.31 76,142.84 78,541.24 80,994.53 32,564.35 41,880.45 4,015.92 2,533.82 22,014.35 2,175.02 374.39 7,121.56 12,343.38 9,076.22 3,723.05 2,785.96 2,567.20 3,301.38 65.48 19.43 2,885.99 330.48 11,768.30 6,559.10 5,209.20 140,918.30 59,883.16 25,816.08 32,629.83 18,497.62 1,557.80 2,533.82 1,407.25 1,320.51 1,238.73 1,163.98 11,094.83 11,596.40 12,097.98 12,599.55 12,502.08 12,916.91 13,336.70 13,763.53 2009 2010 2011 2012 2013 2014 14,194.89 13,101.12 1,093.77 83,524.04 33,717.21 43,085.53 4,137.83 2,583.47 22,982.33 2,274.81 369.06 7,537.81 12,800.65 9,714.99 3,985.08 2,982.21 2,747.70 3,374.66 66.72 19.02 2,942.65 346.27 12,634.42 6,797.87 5,836.55 146,425.32 62,384.75 26,830.31 33,783.93 19,361.01 1,481.85 2,583.47
2007
Residential 1,596.88
11,292.48
11,688.57
LPG
9,590.12
10,091.69
Kerosene
1,702.37
Transport
66,487.67
68,952.55
Gasoline 3,406.33 2,285.57 1,799.65 448.36 5,351.58 6,408.95 2,624.15 1,968.09 1,816.71 2,935.02 59.33 21.48 2,602.64 251.57 8,932.22 3,198.14
25,670.44
26,823.31
Diesel
35,296.90
36,437.35
Fuel Oil
3,284.41
Aviation Fuel
2,235.92
Industrial
17,212.90
17,904.15
LPG
1,743.15
Kerosene
451.77
Diesel
5,060.60
Fuel Oil
9,957.38
10,304.56
Commercial
5,986.12
LPG
2,450.69
Diesel
1,838.56
Fuel Oil
1,696.87
Agriculture
2,861.76
Gasoline
58.11
Kerosene
21.89
Diesel
2,545.97
Fuel Oil
235.78
Power Generation
12,389.41
12,130.36
Fuel Oil
8,928.11
Diesel
3,461.30
Total
116,230.35
120,019.60
Diesel
48,203.33
49,557.79
Fuel Oil
24,102.56
24,711.39
Gasoline 2,066.72 2,285.57
25,728.55
26,882.64
LPG
13,783.96
14,515.49
Kerosene
2,176.03
Aviation Fuel
2,235.92
88
89
2008 74.00 4.44 3.10 81.54 86.99 104.62 118.33 134.08 3.16 3.96 4.68 5.70 4.83 5.66 6.65 7.38 79.00 95.00 107.00 121.00 2009 2010 2011 2012 2013 139.00 7.77 6.44 153.21 2014 155.00 7.83 7.19 170.02 2008 2,069.36 10,738.00 12,831.89 4,283.00 8,548.89 2,093.89 2009 2010 2,118.75 11,572.00 13,690.75 4,775.00 8,915.75 2011 2,143.95 11,865.00 14,008.95 5,138.00 8,870.95 2012 2,169.49 12,256.00 14,425.49 5,803.00 8,622.49 2013 2,195.37 12,595.00 14,790.37 5,966.00 8,824.37 2014 2,221.61 13,062.00 15,283.61 6,603.00 8,680.61 3,883.00 8,363.36
Annex A.1.3a NATURAL GAS DEMAND OUTLOOK
(In Billion Cubic Feet, BCF)
2007
Power Generation
70.00
Transport
4.05
Industrial
3.05
Total
77.10
Annex A.1.3b COAL DEMAND AND SUPPLY OUTLOOK
(In Thousand Metric Tons, MMT)
2007
Industry
2,045.16
Power Generation
9,642.00
10,177.00
Total
11,687.16
12,246.36
Production
3,666.00
Imports
8,021.16
Annex A.1.4 BIOFUELS DEMAND

Diesel Demand 5,985.29 6,209.74 6,442.60 6,684.20 6,934.86 7,194.92 7,464.73 7,744.65 8,035.08 2% 2% 2% 2% 2% 2% 1% 1% 62.10 64.43 133.68 138.70 143.90 149.29 154.89 160.70 Mandated Blend Biodiesel Requirement
BIODIESEL (In Million Liters)
2006
2007
2008
2009
2010
2011
2012
2013
2014
Notes (1) Based on Actual 2006 OEB and 2005-2014 per fuel growth rate (2) Based on 2006 average price of diesel, PhP 34.50/liter
BIOETHANOL (In Million Liters)

Gasoline Demand 3,574.96 3,760.86 3,956.43 4,162.16 4,378.59 4,606.28 4,845.80 5,097.79 5,362.87 5% 5% 10% 10% 10% 10% 208.11 218.93 460.63 484.58 509.78 536.29 Mandated Blend Bioethanol Requirement
2006
2007
2008
2009
2010
2011
2012
2013
2014
Notes (1) Based on Actual 2006 OEB and 2005-2014 per fuel growth rate (2) Based on 2006 average price of diesel, PhP 39.30/liter
90
91
2008 2009 2010 2011 2012 2013 2014 T Total 0.07 0.06 8.76 0.62 3.84 0.13 3.86 10.27 9.07 7.94 1.51 1.04 0.75 0.42 5.39 0.56 0.59 8.03 6.57 4.38 0.56 0.02 0.20 0.13 27.74 1.77 7.56 37.40 146.00 146.00 146.00 146.00 146.00 146.00 146.00 1,135.50 0.37 0.37 0.18 1.29 0.11 146.37 146.48 146.30 0.12 0.12 146.12 0.12 146.12 0.12 146.12 0.12 146.12 0.71 1,137.50 5.11 5.11 5.11 5.11 4.93 4.93 4.75 4.75 4.58 4.58 4.39 4.39 4.22 4.22 38.23 38.23
Annex A.1.5 OIL AND GAS SECTOR TARGETS
Field
2007
OIL (in MMB)
Central Philippines
Region IV-B
Nido
0.12
Matinloc
0.07
Malampaya
Cadlao
Galoc
Total
0.19
GAS (in BCF)
Central Philippines
Region IV-B
Malampaya
113.51
North Luzon Agribusiness Quadrangle
Region II
San Antonio
0.37
Central Philippines
Region VII
Libertad
Total
113.88
CONDENSATE (in MMB)
Central Philippines
Region IV-B
Malampaya
5.15
Total
5.15
Assumptions: a) Oil production in Malampaya oil leg is assumed to commence on 2010 until 2013 b) Malampaya gas production is even @ 400 MMSCF per day for 20 years. c) Gas production at San Antonio @ 1 MMSCF per day for another 4 years, production will be enhanced due to the replacement of more efcient gas turbine. d) Cadlao eld will be reactivated and will resume production on the 1st quarter 2012 at a rate of 1,700 BOPD for 10 years (depletion rate at 5.0 percent per year). e) Galoc eld will be developed and will commenced production by the third quarter of 2009. f) Libertad eld will be developed and will commenced production in 2009. g) San Martin eld is assumed to be developed and commenced production in 2017.
Annex A.1.6 COAL SECTOR TARGETS

2008 38.40 0.79 0.12 0.67 82.58 3.07 70.17 5.34 3.99 197.05 17.59 23.27 0.10 113.58 32.47 10.05 318.83 41.23 0.79 0.12 0.67 80.99 3.05 68.70 5.26 3.99 195.79 17.48 23.27 0.10 112.48 32.42 10.05 318.81 41.14 0.79 0.12 0.67 79.40 3.02 67.22 5.17 3.99 197.49 17.35 23.27 0.10 114.35 32.38 10.05 318.82 40.98 0.79 0.12 0.67 77.64 3.00 65.58 5.07 3.99 199.41 17.22 23.27 0.10 116.45 32.33 10.05 318.82 40.81 0.79 0.12 0.67 75.88 2.97 63.94 4.98 3.99 201.34 17.07 23.27 0.10 118.71 32.15 10.05 318.82 40.58 0.79 0.12 0.67 73.86 2.94 62.04 4.89 3.99 203.57 16.93 23.27 0.10 121.27 31.96 10.05 318.81 2009 2010 2011 2012 2013 2014 40.27 0.79 0.12 0.67 71.85 2.91 60.15 4.80 3.99 307.91 16.79 23.27 0.10 225.94 31.77 10.05 420.82
2007
38.42 0.79 0.12 0.67 84.14 3.10 71.65 5.41 3.99 195.46 17.68 23.27 0.10 111.86 32.51 10.05 318.81
0.02
0.07
0.20
0.31
0.34
0.46
0.62
0.67
3.36 0.05 3.17 0.14 0.28 0.19 0.41 0.25 0.67 0.28
3.41 0.05 3.17 0.19
3.41 0.05 3.17 0.19
3.79 0.06 3.53 0.20 0.68 0.28
3.79 0.06 3.53 0.20 1.01 0.31
4.33 0.06 4.07 0.20 1.01 0.31
4.33 0.06 4.07 0.20 1.01 0.31
4.92 0.06 4.66 0.20 1.01 0.31
In Situ Reserves (MMMT @ 10,000 BTU) North Luzon Agribusiness Quadrangle Region II Metro Luzon Urban Beltway Region IVA Region IVB Central Philippines Region V Region VI Region VII Region VIII Mindanao Super Region Region IX Region X Region XI Region XII Region XIII ARMM Total Production (@ 10,000 BTU/lb MMMT) North Luzon Agribusiness Quadrangle Region II Metro Luzon Urban Beltway Region IVA Region IVB Central Philippines Region V Region VI Region VII Region VIII Mindanao Super Region Region IX Region X Region XI Region XII Region XIII ARMM Total 0.00 0.10 3.67 3.88 0.06 0.10 0.30 0.10 4.28 0.30 0.10 4.78 0.30 0.40 5.14 0.30 0.40 5.80 0.30 0.40 5.97
0.30 0.40 6.60
92
93
2008 16 8 7 31 915.80 1,053.93 163.75 2,132.76 2,296.95 2,442.25 215.99 243.57 1,070.29 1,086.26 1,010.66 1,112.42 46 35 49 1,227.52 1,097.21 288.91 2,613.64 12 7 11 7 7 7 27 21 31 2009 2010 2011 2012 17 2 6 25 1,280.04 1,087.70 319.10 2,686.84 2013 11 5 7 23 1,321.88 1,094.23 343.16 2,759.27 2014 7 7 5 19 1,336.24 1,113.15 363.49 2,812.88
Annex A.1.7 GEOTHERMAL SECTOR TARGETS
2007
No. of Wells to be drilled
Luzon
Visayas
Mindanao
Total
Steam Availability (Cum MW)
Luzon
838.32
Visayas
1,040.00
Mindanao
130.79
Total
2,009.11
Annex A.1.8 POTENTIAL CUMULATIVE SAVINGS IN ENERGY EFFICIENCY PROGRAMS

2007 2008 2009 2010 2011 2012 2013 2014
(In Million Barrel of Fuel Oil Equivalent, MMBFOE)
Efciency Programs
I. INFORMATION, EDUCATION AND COMMUNICATION CAMPAIGN
II. VOLUNTARY AGREEEMENT 5.41 1.78 0.63 2.38 0.28 0.04 0.09 0.15 0.06 0.20 0.03 0.17 0.49 0.09 0.40 6.10 141.45 1,959.71 0.42 6.77 157.00 2,174.95 0.09 0.51 0.18 0.19 0.54 0.10 0.44 7.11 164.88 2,284.18 0.03 0.03 0.21 0.22 0.06 0.07 0.16 0.17 0.17 0.07 0.23 0.03 0.20 0.57 0.10 0.46 7.47 173.22 2,399.84 0.09 0.10 0.10 0.04 0.04 0.05 0.66 0.69 0.73 2.50 2.62 2.76 2.89 0.77 0.05 0.11 0.18 0.07 0.24 0.04 0.21 0.60 0.11 0.49 7.84 181.80 2,518.71 0.66 0.69 0.73 0.77 1.87 1.96 2.06 2.16 6.05 6.35 6.67 7.00 7.35 2.27 0.80 3.04 0.80 0.05 0.11 0.19 0.08 0.26 0.04 0.22 0.63 0.11 0.51 8.23 190.85 2,644.00 7.72 2.39 0.84 3.19 0.84 0.05 0.12 0.20 0.08 0.27 0.04 0.23 0.66 0.12 0.54 8.64 200.36 2,775.72 8.10 2.50 0.89 3.35 0.89 0.06 0.13 0.21 0.08 0.28 0.04 0.24 0.69 0.13 0.56 9.08 210.56 2,917.07
I. ENERGY LABELING AND EFFICIENCY STANDARDS
FOR HOUSEHOLD APPLIANCES
A. Fuel Economy Guide for Vehicles
B. Energy Standards and Labeling Program for Room Air Conditioners
C. Energy Labeling Program for Refrigerators and Freezers
D. Labeling for Compact Fluorescent Lamps
E. Ballast Loss Standard and Labeling for Fluorescent Lamp Ballast
F. Luminaire Installation
G. Household Electric Fans
H. Television Stand-by Power Reduction
I. Performance Certication of Fans and Blowers
II. GOVERNMENT ENERGY MANAGEMENT PROGRAM
A. A. Fuel Conservation
B. B. Electricity Conservation
III. ENERGY MANAGEMENT PROGRAM
A. Energy Audits
B. Heat Rate Improvement of Power Plants
C. System Loss Reduction Program
D. Demand-Side Management ( Market Base)
Total
Equivalent MW Deferred Capacity
Avoidance of GHG Emissions, Gg CO2 Equivalent
94
Annex A.1.9 CUMULATIVE INSTALLED CAPACITY

(In Megawatts, MW)
Luzon Oil-based Diesel Gas Turbine Oil Thermal Coal Natural Gas Geothermal Hydropower Renewables Wind Biomass Others Baseload Midrange Peaking Total Visayas Oil-based Diesel Gas Turbine Oil Thermal Coal Natural Gas Geothermal Hydropower Renewables Wind Biomass Others Baseload Midrange Peaking Total Mindanao Oil-based Diesel Gas Turbine Oil Thermal Coal Natural Gas Geothermal Hydropower Renewables Wind Biomass Others Baseload Midrange Peaking Total Philippines Oil-based Diesel Gas Turbine Oil Thermal Coal Natural Gas Geothermal Hydropower Renewables Wind Biomass Others Baseload Midrange Peaking Total 2007 2,514.48 964.48 900.00 650.00 3,769.00 2,763.00 907.23 2,207.86 65.00 65.00 2008 2,514.48 964.48 900.00 650.00 3,769.00 2,763.00 907.23 2,207.86 65.00 65.00 2009 2,304.48 964.48 690.00 650.00 3,769.00 2,763.00 907.23 2,207.86 65.00 65.00 2010 1,654.48 964.48 690.00 3,769.00 2,763.00 907.23 2,207.86 65.00 65.00 150.00 150.00 11,516.57 705.53 650.53 55.00 398.10 984.80 11.61 2011 1,654.48 964.48 690.00 3,769.00 2,763.00 907.23 2,207.86 65.00 65.00 600.00 300.00 300.00 11,966.57 705.53 650.53 55.00 398.10 984.80 11.61 2012 1,654.48 964.48 690.00 3,769.00 2,763.00 907.23 2,207.86 65.00 65.00 1,050.00 600.00 450.00 12,416.57 705.53 650.53 55.00 398.10 984.80 11.61 2013 1,654.48 964.48 690.00 3,769.00 2,763.00 907.23 2,207.86 65.00 65.00 1,650.00 1,200.00 450.00 13,016.57 705.53 650.53 55.00 398.10 984.80 11.61 2014 1,654.48 964.48 690.00 3,769.00 2,763.00 907.23 2,207.86 65.00 65.00 1,950.00 1,500.00 450.00 13,316.57 705.53 650.53 55.00 398.10 984.80 11.61
12,226.57 705.53 650.53 55.00 198.10 915.80 11.61
12,226.57 705.53 650.53 55.00 398.10 984.80 11.61
12,016.57 705.53 650.53 55.00 398.10 984.80 11.61
200.00 200.00 2,300.04 609.19 609.19 210.00 128.48 997.65
300.00 300.00 2,400.04 609.19 609.19 210.00 128.48 997.65
450.00 450.00 2,550.04 609.19 609.19 210.00 128.48 997.65
600.00 100.00 500.00 2,700.04 609.19 609.19 210.00 128.48 997.65
1,831.04 609.19 609.19 210.00 108.48 997.65
2,100.04 609.19 609.19 210.00 108.48 997.65
2,100.04 609.19 609.19 210.00 128.48 997.65
2,100.04 609.19 609.19 210.00 128.48 997.65
250.00 200.00 50.00 2,175.32 3,829.20 2,224.20 955.00 650.00 4,177.10 2,763.00 1,931.51 3,217.12 65.00 65.00 250.00 200.00 50.00 16,232.93
300.00 250.00 50.00 2,225.32 3,829.20 2,224.20 955.00 650.00 4,377.10 2,763.00 2,000.51 3,217.12 65.00 65.00 300.00 250.00 50.00 16,551.93
350.00 300.00 50.00 2,295.32 3,619.20 2,224.20 745.00 650.00 4,377.10 2,763.00 2,020.51 3,217.12 65.00 65.00 350.00 300.00 50.00 16,411.93
400.00 350.00 50.00 2,345.32 2,969.20 2,224.20 745.00 4,377.10 2,763.00 2,020.51 3,217.12 65.00 65.00 550.00 350.00 200.00 15,961.93
500.00 450.00 50.00 2,445.32 2,969.20 2,224.20 745.00 4,377.10 2,763.00 2,020.51 3,217.12 65.00 65.00 1,300.00 450.00 300.00 550.00 16,711.93
550.00 500.00 50.00 2,495.32 2,969.20 2,224.20 745.00 4,377.10 2,763.00 2,020.51 3,217.12 65.00 65.00 1,900.00 500.00 600.00 800.00 17,311.93
650.00 600.00 50.00 2,595.32 2,969.20 2,224.20 745.00 4,377.10 2,763.00 2,020.51 3,217.12 65.00 65.00 2,750.00 600.00 1,200.00 950.00 18,161.93
800.00 750.00 50.00 2,745.32 2,969.20 2,224.20 745.00 4,377.10 2,763.00 2,020.51 3,217.12 65.00 65.00 3,350.00 850.00 1,500.00 1,000.00 18,761.93
95
Annex A.1.10 SYSTEM PEAK DEMAND, Main Grid

Philippines 9,577 9,996 10,462 10,973 11,517 12,103 12,734 13,401 4.60 4.04 9,397 8,990 8,596 8,225 7,878 7,552 7,252 1,304 1,385 1,476 1,567 1,666 1,775 1,892 6.20 6,981 1,233 Luzon Visayas Mindanao 1,363 1,440 1,525 1,620 1,725 1,841 1,969 2,112 6.03
(In Megawatts MW)
Year
2007
2008
2009
2010
2011
2012
2013
2014
AAGR(%) 2005-2014
96
97
2008 134,826 1,401 164 229 239 193 772 230 1,088 7,659 437 337 13,778 1,398 281 132 40,848 2009 147,462 1,543 188 253 283 218 900 278 1,183 8,173 486 367 14,743 1,572 332 159 42,616 2010 161,683 1,699 216 288 351 253 1,015 335 1,282 8,663 541 418 16,059 1,745 419 184 44,242 2011 177,611 1,869 250 320 405 286 1,142 401 1,400 9,251 603 476 17,199 1,938 499 211 46,089 2012 196,099 2,055 291 355 468 323 1,284 477 1,528 9,874 671 532 17,976 2,151 595 245 48,190 2013 217,293 2,234 340 394 544 365 1,442 574 1,665 10,532 748 594 18,943 2,451 711 283 50,350 2014 241,290 2,420 399 438 634 412 1,618 691 1,821 11,235 786 663 19,969 2,722 851 323 52,594 1,151 606 36,089 1,266 643 42,037 1,390 682 49,006 1,525 724 56,491 1,674 769 66,030 1,841 816 77,328 2,022 866 90,670 468 437 1,855 1,121 464 85 213 190 112 90 10,153 1,541 6,187 2,008 1,554 370 360 361 225 509 462 2,118 1,193 509 96 239 219 131 106 10,981 1,705 6,585 2,217 1,716 388 404 404 239 555 488 2,417 1,267 558 109 274 251 154 123 11,877 1,872 7,038 2,450 1,887 414 455 452 254 608 519 2,759 1,347 613 124 317 288 177 144 12,846 2,065 8,203 2,700 2,092 444 511 506 269 668 553 3,147 1,431 674 141 368 332 203 169 13,895 2,277 9,552 2,972 2,316 488 575 566 284 735 596 3,591 1,530 742 161 430 377 235 200 15,029 2,513 11,131 3,161 2,565 560 647 634 300 809 642 4,098 1,635 812 185 496 437 274 235 16,257 2,773 12,943 3,323 2,842 642 727 709 316
Annex A.1.11 PEAK DEMAND, Small Island Grids
(In Kilowatts, kW)
Luzon
2007 122,876 1,247 141 209 193 171 668 179 1,006 7,180 363 310 12,866 1,275 229 108
Basco Sabtang Itbayat Calayan Palanan Kabugao Lubuagan Casiguran Catanduanes Rapu-rapu Batan Marinduque Polilio Patnanungan Jomalig Mindoro Oriental Mindoro Occidental Mindoro Lubang Tingloy Puerto Princesa Taytay Roxas San Vicente El Nido Busuanga Cuyo Culion Linapacan Araceli Balabac Cayagancillo Agutaya Masbate Ticao Tablas Romblon Sibuyan Banton Corcuera Concepcion San Jose
30,014 8,996 1,044 571 31,070
437 416 1,627 1,051 423 72 193 170 100 78 9,388 1,438 5,264 1,812 1,405 308 320 323 212
Bantayan Guintaran Doong Siquijor Gigantes Caluya Camotes Pilar Maripipi Limasawa Zumarraga Tagapulan Almagro Sto. Nino San Antonio Capul San Vicente Biri
Visayas
Mindanao Basilan Jolo Siasi Lugus Marungas Pangutaran Pata Tapul Tongquil Bongao Cag. De Tawi-tawi Balimbing Manok Mancao West Simunul Sibutu Sitangkai south Ubian Tandubas Sapa-sapa Languyan Dinagat Loreto Hikdop Abad Santos Talicud Balut Ninoy Aquino Kalamansig Palimbang
12,453 3,945 128 214 2,960 226 228 1,988 394 267 228 234 214 129 149 473 267 128 281 25,075 8,082 6,471 929 90 79 114 47 57 94 2,219 309 227 120 345 304 113 89 117 80 89 1,265 390 197 313 298 198 206 2,148 85
14,170 4,454 158 261 3,287 274 288 2,264 467 301 268 258 228 148 177 568 309 151 309 27,748 8,794 7,144 995 111 96 125 55 73 123 2,418 345 262 135 399 334 133 110 137 92 110 1,421 448 220 342 309 289 232 2,400 96
15,827 4,965 183 325 3,597 303 331 2,508 540 337 299 278 250 165 206 653 358 179 350 30,672 9,603 7,943 1,066 122 98 136 66 100 146 2,641 383 309 154 458 375 156 132 159 105 132 1,597 493 228 359 338 311 267 2,686 109
17,548 5,571 213 390 3,892 348 381 2,776 610 373 323 310 269 183 232 684 414 211 368 33,845 10,516 8,602 1,139 148 104 188 75 136 174 2,891 425 341 173 525 420 177 160 185 122 160 1,796 543 322 393 371 335 295 3,006 123
19,591 6,252 247 470 4,292 397 424 3,070 681 406 340 346 292 204 270 785 479 250 386 36,849 11,543 8,879 1,219 172 121 213 90 159 209 3,170 475 378 194 583 472 205 190 214 145 190 2,020 598 379 429 406 361 329 3,367 139
21,822 7,016 291 541 4,737 452 472 3,393 752 434 357 386 306 228 303 900 555 295 404 40,719 12,682 9,705 1,307 200 142 241 108 202 245 3,478 531 419 219 636 535 232 225 245 172 225 2,274 659 440 468 446 389 361 3,776 157
24,276 7,865 344 633 5,194 515 515 3,745 823 464 375 430 332 253 340 1,032 642 350 424 45,006 13,942 10,609 1,404 233 166 273 129 257 288 3,813 594 465 244 686 603 262 265 279 200 265 2,560 726 511 512 490 420 397 4,235 178
27,019 8,805 406 741 5,707 588 566 4,131 893 498 393 480 361 282 381 1,184 744 414 445 49,831 15,356 11,577 1,509 271 194 309 155 321 338 4,266 664 518 272 739 682 296 306 314 230 306 2,884 800 578 559 529 452 452 4,753 201
98
Annex A.1.12a INDICATIVE POWER PLANT PROJECTS

(In Megawatts, MW)
Project Luzon Burgos Wind Power Project I (formerly Luzon Wind Power Project Phase I) Ilijan CCGT Expansion Bulacan Biomass-to-Energy Project Burgos Wind Power Project II 2nd Phase CFB Coal-Fired Power 4 x 150 MW Coal-Fired Power San Gabriel Power Plant Kalayaan Pumped Storage Power Plant III (CBK expansion) Tanawon Geothermal Project Rangas Geothemal Project Manito-Kayabon Geothermal Project Balintingon River Multi-purpose Project Pagbilao Expansion Pantabangan Expansion 2 x 150 MW CCGT Power Station Quezon Power Expansion Project Visayas Coal-red Plant Toledo Coal Expansion Panay Biomass Power Project GBPC Coal-Fired Plant (2x50 MW) Dauin Geothermal Aklan Hydropower Project Villasiga HEP Mindanao Cabulig Hydro Tamugan AB, Panigan and Suawan Hydroelectric Power Cagayan de Oro Biomass Power Project Agus 3 Hydroelectric Plant SM 200 MW CFBB CFTPP Suldan Kudarat Coal Tagoloan Hydropower Total Capacity 3,103.00 40.00 300.00 15.00 46.00 50.00 300.00 550.00 360.00 40.00 40.00 40.00 44.00 400.00 78.00 300.00 500.00 624.00 100.00 246.00 25.00 164.00 40.00 41.00 8.00 745.50 8.00 34.50 10.00 225.00 200.00 200.00 68.00 4,472.50 Year Available 2009 Ilocos Norte 2009 2009 2010 2010 2010 2011 2011 2011 2013 2013 2013 Ilijan, Batangas City Bocaue, Bulacan Ilocos Norte Mabalacat, Pampanga Subic Sta. Rita, Batangas City Kalayaan, Laguna Sorsogon Sorsogon Sorsogon General Tinio, Nueva Ecija Pagbilao, Quezon Pantabangan, Nueva Ecija Quezon, Province Mauban, Quezon Concepcion, Iloilo Panay Island Toledo City, Cebu Panay Island Iloilo, Panay Island Dauin, Negros Oriental Libacao, Aklan Sibalom, Antique Plaridel, Jasaan Misamis Oriental Hedcor Tamugan , Inc. Cagayan de Oro Lanao del Norte Southern Mindanao Sultan Kudarat Bukidnon Location
2010 Phase I - 2010 Phase II - 2011 2010 2011 2012 2012 2013 2010 2010 2010 2011 2011 2012 2012
Annex A.1.12b POWER PLANT RETIREMENT SCHEDULE

(In Megawatts, MW)
Hopewell GT Malaya 1 Malaya 2 Total Capacity 210 300 350 860 Year 2009 2010 2010
99
Annex A.1.13 LIST OF AVAILABLE INDIGENOUS RESOURCES FOR INDICATIVE CAPACITY ADDITIONS, Geothermal
Plant Batong Buhay Buguias Tinoc Daklan Baua Natib Mabini Montelago Tanawon Rangas Manito Kayabon Northern Negros* Mandalagan Nasulo** Dauin Biliran Lakewood SE Apo Amacan NW Apo Mindanao III** Amacan, North Davao NW Apo (Tiko), North Cotabato Mt. Apo, North Cotabato Lakewood, Zamboanga del Sur SE Apo (Kapatagan), Davao del Sur Biliran, Biliran Dauin, Negros Oriental Palinpinon, Negros Oriental Mandalagan, Negros Occidental Bago City, Negros Occidental Manito, Albay Albay and Sorsogon Albay and Sorsogon 40.00 40.00 40.00 49.40 20.00 20.00 40.00 20.00 40.00 40.00 20.00 20.00 50.00 699.40 Montelago, Oriental Mindoro 40.00 Mabini, Batangas 20.00 Natib, Bataan 40.00 Baua, Cagayan 20.00 Daklan, Benguet 20.00 Buguias Tinoc, Ifugao 60.00 Batong Buhay, Kalinga 60.00 Location Capacity Year Available 2013 2014 2014 2014 2012 2012 2012 2011 2013 2013 2007 2014 2010 2011 2012 2012 2014 2013 2012 2010
(In Megawatts, MW)
Region
CAR
II
Metro Luzon Urban Beltway
III
IV-A
IV-B
Central Philippines
VI
VII
VIII
Mindanao Agribusiness
IX
XI
XII
Total
* commissioned in February 2006 ** committed projects
100
Annex A.1.13 LIST OF AVAILABLE INDIGENOUS RESOURCES FOR INDICATIVE CAPACITY ADDITIONS, Hydropower
(in Megawatts, MW)
Region North Luzon Agribusiness Quadrangle CAR Name of Plant Location Capacity Year Available
I II III
Ibulao MHP Bulanao RIS Atok 4 MHP Buguias 1 MHP Pansian River MHP Uddiawan MHP Pantabangan Expansion Balintingon River Multi-purpose Project Kalayaan Pumped Storage Power Plant III (CBK expansion) Power Plant III (CBK expansion) Catuiran MHP Langogan MHP Batang Batang MHP Cabinbin MHP Vera Falls Palali Falls Cumaginking Lower Dugui MHP Hitoma 1 MHP Hitoma 2 MHP Solong Falls MHP Kapipian MHP Villasiga HEP Timbaban HEP Aklan Hydropower Project Sicopong HEP Siaton MHP Pacuan HEP Igbolo MHP Bugtong MHP Amandaraga MHP Salug Daku MHP Lower Dapitan MHP Upper Dapitan MHP Middle Dapitan MHP Agus 3 Hydroelectric Plant Tagoloan Hydropower Cabulig MHP Suwawan MHP Tamugan AB, Panigan and Suawan Hydroelectric Power Talaingod MHP Magpet MHP
Lagawe, Ifugao Tabuk, Kalinga Atok, Benguet Benguet Pagudpod, Ilocos, Norte Solano, Nueva Viscaya Pantabangan, Nueva Ecija Nueva Ecija
1.50 0.30 0.30 0.60 0.70 1.00 78.00 44.00
2010 2010 2010 2010 2010 2010 2011 2013
Metro Luzon Urban Beltway IV-A
Kalayaan, Laguna
360.00
2011
IV-B Central Philippines IV-B
Naujan, Mindoro Oriental Puerto Princesa Palawan Palawan Palawan Malinao, Albay Malinao, Albay Malinao, Albay Virac, Catanduanes Caramoran, Catanduanes Caramoran, Catanduanes San Miguel, Catanduanes Catanduanes Antique Madalag, Aklan Libacao, Aklan Negros Oriental Negros Oriental Negros Oriental Igbaras, Iloilo Samar Eastern Samar Josena, Zamboanga del Sur Zamboanga del Norte Zamboanga del Norte Zamboanga del Norte Saguiaran, Lanao del Norte Sumilao, Bukidnon Claveria, Misamis Oriental Davao City Davao City Talaingod, Davao del Norte Magpet, North Cotabato
8.00 6.80 3.50 0.80 0.20 0.10 0.20 3.20 1.50 1.60 2.30 3.00 8.00 23.50 41.00 17.80 5.40 33.00 4.00 1.00 4.00 6.00 3.80 3.60 4.40 225.00 68.00 8.00 5.50 34.50 1.00 10.00 1,025.10
2011 2011 2014 2014 2010 2010 2010 2010 2010 2010 2010 2010 2012 2012 2012 2013 2013 2013 2013 2014 2014 2010 2013 2013 2013 2011 2012 2010 2011 2010 2012 2012
VI
VIII Mindanao Agribusiness IX
XI
XII Total
101
(in Megawatts, MW)

Region North Luzon Agribusiness Quadrangle I Location Burgos, Ilocos Norte (Phase 1) Burgos, Ilocos Norte (Phase 2) Pagudpud, Ilocos Norte Pasuquin, Ilocos Norte Suyo, Ilocos Sur Western Pangasinan Eastern Pangasinan Carranglan, Nueva Ecija Mauban, Quezon Caliraya, Laguna Marinduque Puerto Galera, Oriental Mindoro Sta. Cruz, Marinduque Abra de Ilog, Occidental Mindoro Romblon Tablas Island, Romblon Tablas Island, Romblon Baleno, Masbate San Carlos Negros Occidental Pandan, Antique San Remigio, Antique Manoc-manoc, Aklan Nuventa, Surigao del Sur Capacity 40.00 46.00 40.00 57.00 40.00 25.00 35.00 50.00 50.00 25.00 3.40 20.00 5.00 10.00 1.70 3.40 5.00 5.00 30.00 20.00 20.00 10.00 15.00 556.50 Year Available 2009 2010 2014 2014 2014 2014 2014 2014 2013 2013 2009 2013 2013 2014 2009 2009 2012 2009 2010 2010 2010 2012 2011
III Metro Luzon Urban Beltway IV-A IV-B
Central Philippines IV-B
V VI
Mindanao Agribusiness CARAGA Total
102
Annex A.1.13 LIST OF AVAILABLE INDIGENOUS RESOURCES FOR INDICATIVE CAPACITY ADDITIONS, Wind
103 Annex A: ANNUAL TARGETS

Location Ricehull Cogeneration Ricehull Cogeneration Ricehull Cogeneration Ricehull Cogeneration Ricehull Cogeneration Ricehull Cogeneration Ricehull Cogeneration Ricehull Cogeneration Ricehull Cogeneration Ricehull Cogeneration Ricehull Cogeneration Ricehull Cogeneration Ricehull Cogeneration Bagasse Cogeneration Bagasse Cogeneration Ricehull Cogeneration Ricehull Cogeneration Ricehull Cogeneration Ricehull Cogeneration 15.00 3.70 10.00 2.50 5.00 25.00 12.00 50.00 5.00 2.50 10.00 5.20 183.90 2.50 2.50 2.50 9.90 9.90 0.80 9.90 Project Capacity Year Available 2014 2014 2014 2014 2014 2014 2014 2009 2014 2010 2014 2014 2010 2010 2013 2014 2014 2010 2014
Annex A.1.13 LIST OF AVAILABLE INDIGENOUS RESOURCES FOR INDICATIVE CAPACITY ADDITIONS, Biomass
(in Megawatts, MW)
Region
Calasiao, Pangasinan
II
Gamu, Isabela
Isabela
III
San Jose City, Nueva Ecija
Quezon, Nueva Ecija
Talavera, Nueva Ecija
Muoz, Nueva Ecija
III
Bocaue, Bulacan
IV-B
Mindoro Occidental
Mindoro Oriental
Central Philippines
IV-B
Narra, Palawan
Pili, Camarines Sur
VI
Panay
Kabangkalan, Negros Occidental
Victorias, Negros Occidental
Pototan, Iloilo
VII
Bohol
Cagayan de Oro City
XII
Surallah, South Cotabato
Total
(In Kilometers, kms.)

Project Metro Luzon Urban Beltway Minolo-Calapan (SC/CP) Sta. Cruz-San Jose Sched. 2-4 (SC/CP) Bansud-Roxas (SC/SP) Calapan-Bansud (Rehab) Roxas-San Jose (SC/SP) Central Philippines Puerto-Roxas 138 kV T/L (SC/ST) Roxas-Taytay 69 kV T/L (SC/ST) Re-routing of Puerto Irawan Tie Line Brookes Pt. - Bataraza (SC/ST) Taytay-El Nido (SC/ST) Odiongan-San Agustin (SC/SP) Odiongan-Looc (SC/SP) Ligao S/S-Caratagan (SC/SP) Codon-Virac (SC/ST) Codon-Caramoran (SC/SP) Virac Viga (Post Const.) Mobo-Cataingan 1 & 2 (SC/CP) Mobo-Aroroy (Post. Const.) Bantayan-Madridejos (SC/CP) Siquijor-E. Villanueva (SC/SP) Siquijor-San Juan (SC/SP) Mindanao Agribusiness Jolo-Patikul (SC/SP) Jolo-Parang (SC/SP) Isabela-Lamitan (SC/SP) Isabela-Maluso (SC/SP) Total Length of Line 287.0 50.0 73.0 39.5 19.5 105.0 653.5 75.8 75.6 14.0 28.0 75.0 36.0 20.0 45.0 25.0 43.0 52.1 67.2 48.9 15.0 23.0 10.0 95.0 10.0 22.0 28.0 35.0 1,035.5 2005-2007 2005-2007 2005-2007 2005-2007 Sulu Sulu Basilan Basilan 2005 2005-2006 2005 2006-2008 2007-2009 2007-2009 2007-2009 2005-2006 2005-2008 2007-2010 2005 2005-2007 2005 2008-2010 2012-2014 2012-2014 Palawan Palawan Palawan Palawan Palawan Tablas, Romblon Tablas, Romblon Albay Catanduanes Catanduanes Catanduanes Masbate Masbate Cebu Siquijor Siquijor 2008-2010 2005-2007 2005-2008 2005-2006 2006-2008 Or. Mindoro Occ. Mindoro Or. Mindoro Or. Mindoro Or. Mindoro Target Year Location
104
Annex A.1.14 LIST OF TRANSMISSION LINE PROJECTS, Small Island Grids
Annex A.1.15 LIST OF SUBSTATION PROJECTS, Small Island Grids

(In Megavolt Amperes, MVA)
Project Metro Luzon Urban Beltway Calapan Roxas San Jose Central Philippines Roxas Taytay Taytay (Exp.) 3-69 kV PCB El Nido S/S Brookes Pt. (Exp.) 3-69 kV PCB Bataraza S/S Odiongan San Agustin Looc Marinawa Codon Mobo Madridejos Bantayan Siquijor E. Villanueva San Juan Mindanao Agribusiness Jolo Patikul Parang Isabela (Exp.) 3-69 kV PCB Lamitan Maluso Total 10.00 5.00 200.00 5.00 5.00 5.00 5.00 10.00 5.00 10.00 5.00 5.00 5.00 5.00 5.00 30.00 5.00 5.00 5.00 2005-2007 2005-2007 2005-2007 2005-2007 2005-2007 2005-2007 Sulu Sulu Sulu Basilan Basilan Basilan 5.00 Capacity 85.00 50.00 10.00 25.00 85.00 5.00 5.00 2005 2005-2006 2007-2009 2007-2009 2006-2008 2006-2008 2007-2009 2007-2009 2007-2009 2005-2007 2007-2010 2005-2007 2008-2010 2008-2010 2012-2014 2012-2014 2012-2014 Palawan Palawan Palawan Palawan Palawan Palawan Tablas, Romblon Tablas, Romblon Tablas, Romblon Catanduanes Catanduanes Masbate Cebu Cebu Siquijor Siquijor Siquijor 2005-2006 2006-2008 2005-2006 Or. Mindoro Or. Mindoro Occ. Mindoro Target Year Location
105
Annex A.1.16 NATIONAL AND LOCAL GOVERNMENT SHARES FROM ENERGY RESOURCES
Gas/Condensate National 8,514.19 8,816.98 8,286.32 7,902.84 8,551.97 8,683.96 8,894.70 8,521.57 45,448.37 113,620.91 592.65 395.10 987.75 4,609.95 5,681.01 14,202.59 90.47 60.31 150.79 714.34 476.23 3,073.30 5,929.82 14,824.52 90.47 60.31 150.79 687.93 458.62 5,789.32 14,473.28 90.44 60.29 150.73 654.24 436.16 5,701.35 14,253.31 80.62 53.75 134.37 609.68 406.45 1,016.13 1,090.39 1,146.55 1,190.57 7,683.25 5,268.56 13,171.40 75.62 50.41 126.03 552.41 368.27 920.68 5,524.23 13,810.55 68.36 45.57 113.93 501.07 334.05 835.12 5,877.98 14,694.96 51.03 34.02 85.04 461.14 307.43 768.57 5,676.10 14,190.29 45.66 30.44 76.09 429.15 286.10 715.25 LGU T Total National LGU T Total National LGU T Total National Coal Geothermal Hydropower LGU 327.98 334.40 348.41 411.88 468.05 507.56 545.01 550.38 3,493.66 T Total 327.98 334.40 348.41 411.88 468.05 507.56 545.01 550.38 3,493.66
(In Million Pesos, PhP)
Year
Oil
National
LGU
T Total
2007
12.92
8.62
21.54
2008
240.06
160.22
400.28
2009
467.19
311.83
779.02
2010
642.20
428.41
1,070.61
2011
817.21
544.98
1,362.19
2012
815.22
543.65
1,358.87
2013
813.23
542.32
1,355.55
2014
791.72
527.87
1,319.60
Total
4,599.76
3,067.90
7,667.65
68,172.53
Annex A.1.17 CARBON DIOXIDE (CO2) EMISSIONS FROM ENERGY USE

2008 53.00 8.16 26.88 88.04 89.97 26.97 8.18 54.82 2009 2010 55.14 10.40 27.05 92.59 2011 57.02 11.77 27.13 95.91 2012 58.83 13.19 27.21 99.22 2013 60.51 14.96 27.29 102.76 2014 62.49 15.88 27.39 105.77
(In Million Metric Tons, MMMT)
Fuels
2007
Oil and Oil Products
51.47
Natural Gas
8.13
Coal
26.47
Total
86.07
106

2008 Govt 52.76 43.25 9.51 6.18 3.48 0.01 0.64 2.69 3.28 0.68 1.34 9.45 0.68 0.63 0.03 0.05 0.03 5.20 0.65 5.85 0.05 17.09 0.68 1.59 0.68 0.03 6.54 0.05 0.69 0.03 7.00 0.05 0.72 0.03 7.69 0.05 3.14 18.43 0.10 0.65 0.95 1.59 3.09 0.05 0.03 0.05 0.03 0.05 0.49 3.76 0.61 4.66 0.71 8.59 0.68 14.09 7.56 1.30 0.22 0.58 0.71 10.10 0.68 22.23 0.68 14.17 2.24 2.24 0.60 2.06 4.71 3.09 5.71 0.67 5.49 3.38 3.64 2.13 5.83 2.24 2.90 0.32 34.66 0.46 52.25 15.38 0.16 8.06 0.24 1.72 2.86 7.26 3.25 7.02 3.13 10.26 2.14 7.34 2.02 8.60 5.24 50.27 6.80 64.98 3.13 28.44 2.30 26.72 4.50 25.06 4.73 0.39 3.95 15.99 2.24 2.24 3.36 13.91 7.02 4.48 0.65 1.89 3.51 4.92 0.22 15.23 3.51 21.02 25.75 27.79 27.54 13.11 4.46 1.10 42.04 57.84 57.11 56.31 52.05 63.06 83.59 84.90 83.85 65.16 Private Govt Private Govt Private Govt Private Govt Private Govt Private Govt Private 58.06 46.94 11.12 16.97 3.06 36.59 20.17 1.19 2009 2010 2011 2012 2013 2014 T Total Govt Private 537.67 398.51 139.16 221.74 41.45 113.62 19.57 47.10 79.71 14.34 2.60 19.85 42.93 43.77 0.40 3.32 0.71 0.07 1.64 0.28 1.40 2.57 2.57 7.05 4.05 3.00 1.44 16.31 1.19 118.22 9.96 258.20 13.12 305.70 6.38 171.46 3.91 224.37 6.12 169.41 5.18 167.53 2.55 37.21 39.76 3.43 3.43 2.49 2.66 115.33 115.33 5.01 5.01 2.49 2.66 0.10 1.50 0.20 1.90 0.20 0.28 0.28 1.95 19.03 0.64 18.39 114.47 114.47 1.92 1.92 6.01 5.65 0.69 0.08 2.21 0.10 2.71 0.12 3.20 0.14 0.28 0.20 1.95 28.63 0.50 28.13 9.47 9.47 0.93 0.93 3.85 0.16 0.28 0.20 2.00 101.80 0.50 101.30 3.23 3.23 0.93 0.93 4.49 0.18 0.28 0.20 2.00 35.33 0.51 34.82 34.61 34.61 4.95 0.20 0.28 0.20 2.00 17.14 0.52 16.62 60.65 60.65 39.09 18.51 20.58 2.13 86.23 2.10 1475.62 5.64 1.04 2.26 1.40 14.70 209.65 10.39 199.26 380.98 380.98 28.67
Annex A.1.18 ANNUAL INVESTMENT REQUIREMENTS By Sector
(In Billion Pesos, PhP)
Sector
2007
Govt
Private
Fossil Fuel Resources
46.29
Oil and Gas
42.97
Coal
Renewable Energy Resources
3.98
Geothermal
2.19
Hydropower
Biomass
Wind
1.79
Alternative Transport Fuels
0.76
Compressed Natural Gas
Biodiesel
Bioethanol
Jatropha
0.76
Energy Efciency and Conservation
0.46
Information, Education and
0.02
Communication Campaign
Voluntary Agreement
Energy Labeling and Efciency
0.06
Standards
Government Enercon Program
0.28
Energy Management Programs
0.10
Downstream
Oil
Natural Gas
Power and Transmission Development
11.60
11.66
Power Generation
2.23
Transmission
9.37
Expanded Rural Electrication
0.91
Total
17.71
68.28
Annex A.1.19 OIL AND GAS INVESTMENT REQUIREMENTS

2007 0.735 0.170 0.565 4.916 0.848 4.068 37.322 6.876 27.492 2.954 42.973 43.246 42.042 57.837 2.856 2.757 2.659 27.492 27.492 34.360 5.213 4.108 10.252 35.561 34.357 47.271 6.102 6.102 8.814 8.136 47.389 10.469 34.360 2.560 57.108 1.187 1.187 1.356 1.187 7.289 7.289 10.170 9.323 0.283 0.283 0.283 0.283 0.113 0.113 0.113 0.113 0.113 0.283 7.119 1.017 6.102 48.795 11.522 34.811 2.462 56.310 0.396 0.396 0.396 0.396 0.396 2008 2009 2010 2011 2012 2013 0.396 0.113 0.283 4.238 0.848 3.390 47.415 10.241 34.811 2.363 52.049 2014 0.396 0.113 0.283 3.390 0.678 2.712 43.158 6.401 34.788 1.969 46.944 Total 3.507 0.961 2.546 53.734 8.308 45.426 341.268 65.082 255.606 20.580 398.510
Program/Projects
Geophysical Data Acquisition
A. 2D Seismic
B. 3D Seismic
Exploration Well Drilling
A. Onshore
B. Offshore
Oil and Gas (Including Condensate) Production
A. Oil
B. Gas
C. Condensate
Total
108

Location Available 2.571 Cauayan, Isabela Cauayan, Isabela Iguig, Cagayan Iguig, Cagayan 3.428 Antique Antique Antique Sultan Kudarat Surigao 3.318 3.318 2011 3.514 9.513 2009 3.428 3.876 21.017 2014 3.428 10.285 6.857 3.428 4.322 25.749 10.285 6.857 3.428 4.650 27.792 5.252 27.537 5.399 13.113 5.976 11.119 6.857 6.857 2012 2010 3.428 8.571 8.571 8.571 8.571 10.286 10.286 5.143 5.143 2013 10.286 2010 2.571 2.571 2.571 10.286 2.571 5.143 5.143 2012 2009 2.571 2.571 2.571 2.571 5.142 2.571 2.571 2007 2008 2009 2010 2011 Year 2012 5.142 2013 2.571 2014 Total 20.568 5.142 5.142 5.142 5.142 51.428 20.570 20.572 10.286 30.855 20.571 10.284 36.307 139.160
Annex A.1.20 COAL INVESTMENT REQUIREMENTS
Region
Programs/
Capacity
Projects
(MW)
Luzon
200
II
50
50
50
50
Visayas
500
VI
100
200
200
Mindanao
300
XII
200
XIII
100
Mine Investment
Total
1,000
Annex A.1.21 GEOTHERMAL INVESTMENT REQUIREMENTS

Year 0.012 2013 0.927 0.927 0.649 0.649 0.927 0.649 0.927 0.809 0.624 0.565 0.012 1.925 2014 2011 0.580 0.413 1.345 0.251 2012 2013 2014 2012 0.251 2.188 0.066 2.254 0.186 3.485 1.717 5.202 0.186 2.861 7.256 10.117 0.649 0.007 3.248 7.021 10.269 0.405 0.133 3.131 10.265 13.396 0.186 0.186 0.801 0.313 1.577 0.927 0.557 0.007 1.974 0.919 0.649 0.690 0.816 2012 0.690 0.405 0.438 0.133 2.900 1.045 0.523 0.927 0.405 0.251 2.143 9.485 0.445 0.405 0.194 0.251 0.560 0.405 0.919 0.281 0.259 7.342 2.022 6.754 1.491 1.128 0.413 1.247 0.405 0.066 0.375 0.790 0.012 1.034 0.138 0.554 0.256 0.884 0.801 0.428 1.054 0.649 0.005 0.281 0.564 2.165 0.259 0.005 0.281 1.045 0.129 0.259 4.731 1.097 4.154 0.490 0.608 0.497 1.045 0.683 0.560 0.005 0.742 0.927 0.020 0.199 0.919 1.045 0.405 0.405 0.281 0.560 0.004 0.374 0.560 0.436 0.256 0.685 0.568 0.404 0.004 0.003 0.682 1.459 0.259 0.130 0.011 0.560 0.003 1.531 3.057 20.174 41.455 61.63 0.919 1.045 0.560 0.405 0.405 0.801 1.045 1.045 0.801 0.405 0.405 0.005 0.129 0.005 0.004 0.004 0.005 0.554 0.012 0.408 0.812 0.404 0.130 0.003 4.895 0.703 1.531 10.777 3.586 1.868 3.451 1.871 0.801 1.045 1.045 0.801 0.561 2014 2014 2014 2012 2012 2012 2011 2013 2013 0.066 1.808 1.717 1.547 5.266 1.994 4.643 2.114 6.311 1.693 4.492 1.195 2.864 0.026 2007 2008 2009 2010 2011 2012 2013 2014 T Total

Available Govt Private Govt Private Govt Private Govt Private Govt Private Govt Private Govt Private Govt Private Govt Private 2.071 10.389 27.430 0.006 0.561 0.281 0.281 0.130 0.003 0.130 3.109 3.340 2.857 0.679 1.083 0.283 8.254 0.281 3.359 1.509 4.541 3.248 1.739 5.186 5.180 1.740 1.740 3.586 1.871 3.586
Region
Program/
Projects
Location
Capacity
(MW)
L Luzon
380.00
CAR
Batong Buhay
Batong Buhay,
60.00
Kalinga
Buguias-Tinoc
Tinoc, Ifugao
60.00
Daklan
Daklan, Benguet
20.00
II
Baua
Baua, Cagayan
20.00
III
Natib
Natib, Bataan
40.00
IV-A
Mabini
Mabini, Batangas
20.00
IV-B
Montelago
Montelago,
Mindoro Or.
40.00
Tanawon
Albay & Sorsogon
40.00
Rangas
Albay & Sorsogon
40.00
Manito-Kayabon
Manito, Albay
40.00
Maintenance of Existing Plants
Visayas
80.00
VI
Mandalagan
Mandalagan,
20.00
Negros Occidental
VII
Dauin
Dauin, Negros
40.00
Oriental
VIII
Biliran
Biliran, Leyte
20.00
Mindanao
120.00
IX
Lakewood
Lakewood,
40.00
Zamboanga del Sur
XI
Amacan
Amacan, North
20.00
Davao
SE Apo
Kapatagan, Davao
40.00
del Sur
XII
NW Apo
Tiko, North Cotabato
20.00
Government-Private Total
580.00
110
Annex A.1.22 HYDROPOWER INVESTMENT REQUIREMENTS

Region Program/ Projects Locations Capacity (MW) 126.40 Lagawe, Ifugao Tabuk, Kalinga Atok, Benguet Benguet Pagudpod, Ilocos Norte Solano, Nueva Vizcaya Pantabangan, Nueva Ecija Nueva Ecija Kalayaan, Laguna Naujan, Mindoro Oriental Puerto Princesa, Palawan Palawan Palawan Malinao, Albay Malinao, Albay Malinao, Albay Virac, Catanduanes Caramoran, Catanduanes Caramoran, Catanduanes San Miguel, Catanduanes Catanduanes Antique Madalag, Aklan Libacao, Aklan Igbaras, Iloilo Negros Oriental Negros Oriental Negros Oriental Samar Eastern Samar Josena, Zamboanga del Sur Zamboanga del Norte Zamboanga del Norte Zamboanga del Norte Saguiaran, Lanao del Norte Sumilao, Bukidnon Claveria, Misamis Oriental Davao City Davao City Talaingod, Davao del Norte Magpet, North Cotabato 1.50 0.30 0.30 0.60 0.70 1.00 78.00 44.00 368.00 360.00 8.00 160.90 6.80 3.50 0.80 0.20 0.10 0.20 3.20 1.50 1.60 2.30 3.00 8.00 23.50 41.00 4.00 17.80 5.40 33.00 1.00 4.00 369.80 6.00 3.80 3.60 4.40 225.00 68.00 8.00 5.50 34.50 1.00 10.00 1,025.10 2010 2013 2013 2013 2011 2012 2010 2011 2010 2012 2012 2011 2014 2014 2010 2010 2010 2010 2010 2010 2010 2010 2012 2012 2012 2013 2013 2013 2013 2014 2014 2011 2011 2010 2010 2010 2010 2010 2010 2011 2013 Year Available 2007
Northern Luzon Agribusiness Quadrangle CAR Ibulao MHP Bulanao RIS Atok 4 MHP Buguias 1 MHP I II III Pansian River MHP Uddiawan MHP Pantabangan Expansion Balintingon River Multi-purpose Project Metro Luzon Urban Beltway IV-A IV-B IV-B Kalayaan Pumped Storage Power Plant III (CBK Expansion) Catuiran MHP Langogan MHP Batang Batang MHP Cabinbin MHP Vera Falls V Palali Falls Cumaginking Lower Dugui MHP Hitoma 1 MHP Hitoma 2 MHP Solong Falls MHP Kapipian MHP VI Villasiga HEP Timbaban HEP Aklan Hydropower Project Igbolo MHP VII Sicopong HEP Siaton MHP Pacuan HEP VIII Bugtong MHP Amandaraga MHP Mindanao Agribusiness IX Salug Daku MHP Lower Dapitan MHP Upper Dapitan MHP Middle Dapitan MHP X Agus 3 Hydroelectric Plant Tagoloan Hydropower Cabulig MHP Suwawan MHP XI XII Total Tamugan AB, Panigan and Suawan Hydroelectric Power Talaingod MHP Magpet MHP Government - Private
Central Philippines
111
2008 Govt. 0.013 0.013 0.013 0.027 0.031 0.045 Private 0.184 0.067
2009 Govt. 0.020 0.020 0.020 0.040 0.047 0.067 3.494 16.486 16.128 0.358 0.542 0.305 0.305 0.814 Private 3.770 0.101
2010 Govt. Private 5.242
2013 Govt. Private
2014 Govt. Private
Total Govt. 0.034 0.034 0.034 0.067 0.078 0.112 Private 14.123 0.168
5.242 1.971 24.730 24.192 0.538 0.457 0.457 0.157 0.036 0.235 0.054 3.248 7.569 0.157 4.305 0.235 0.390 1.154 0.762 0.392 2.957 0.000
8.736 4.928 41.216 40.320 0.896 16.867
0.090 0.022 0.011 0.022 0.358 0.168 0.179 0.258 0.336
0.009 0.004 0.009 0.143 0.067 0.072 0.103 0.134
0.013 0.007 0.013 0.215 0.101 0.108 0.155 0.202 0.358 1.053 1.837 0.538 1.579 2.755 0.179 0.797 0.242 1.478 0.269 1.196 0.363 2.218 0.045 0.179 0.067 0.269
0.896 2.632 4.592 0.448 1.994 0.605 3.696 0.112 0.448 41.418 0.672 0.426 0.403 0.493 25.200 7.616 0.896 0.616 3.864
2.173 0.269
13.586 0.403
19.029
5.837 0.170 0.161 0.197
0.793 0.255 0.242 0.296
10.080 0.358 1.546 0.538 0.246 2.318
15.120 3.046 0.370 0.045 0.448 0.067 0.672 15.378 15.378 0.157 8.055 0.235 0.390 1.187 8.212 0.625 4.570
0.112 1.120 113.624 114.811
0.013 2.912
2.899
0.325
34.655
0.457
52.248
34.980
52.705
112

Year Available 1.617 2014 2014 2014 2014 2014 2014 2014 0.638 2009 2014 2010 1.575 2014 2014 2010 2010 2013 2014 2014 0.426 2010 2014 0.638 3.385 3.639 2.128 0.426 0.638 0.638 0.221 5.826 0.332 3.952 0.511 0.766 2.128 3.192 0.213 0.106 0.221 0.319 0.160 0.332 1.064 1.596 2.362 2.128 0.426 0.638 3.830 0.106 0.213 0.958 0.160 0.319 0.157 0.638 0.958 0.236 1.384 0.638 0.157 0.106 0.160 0.236 0.106 0.160 0.106 0.160 0.421 0.632 0.421 0.632 0.034 0.051 0.085 1.053 1.053 0.266 0.266 0.266 3.054 1.596 0.394 1.064 10.853 0.266 0.532 2.660 1.277 5.320 0.532 0.266 1.617 1.064 0.553 19.567 No Proponent JG Summit Holdings Inc. Bronzeoak Full Advantage Philippine, Inc. No Proponent No Proponent Full Advantage Philippines, Inc. Inter City - LGU of Bocaue, Bulacan Full Advantage Philippines, Inc. 0.421 0.632 1.053 Westpoint Energy Resource, Inc. Full Advantage Philippines, Inc. San Jose I-Power Corp. Full Advantage Philippines, Inc. No Proponent No Proponent 2.426 4.043 2007 2008 2009 2010 2011 2012 2013 2014 Total Proponent(s)
Annex A.1.23 BIOMASS INVESTMENT REQUIREMENTS
Region
Location
Capacity
(MW)
Northern Luzon Agribusiness Quadrangle
38.00
Calasiao, Pangasinan
9.90
II
Gamu, Isabela
0.80
Isabela
9.90
San Jose City, Nueva Ecija
9.90
Quezon, Nueva Ecija
2.50
III
Talavera, Nueva Ecija
2.50
Muoz, Nueva Ecija
2.50
28.70
III
Bocaue, Bulacan
15.00
IV-B
Mindoro Occidental
3.70
Mindoro Oriental
10.00
Central Philippines
102.00
IV-B
Narra, Palawan
2.50
Pili, Camarines Sur
5.00
VI
Panay
25.00
Kabangkalan, Negros Occidental
12.00
Victorias, Negros Occidental
50.00
Pototan, Iloilo
5.00
VII
Bohol
2.50
15.20
Cagayan de Oro City
10.00
XII
Surallah, South Cotabato
5.20
Total
183.90
Annex A.1.24 WIND INVESTMENT REQUIREMENTS

Year Available 1.792 2.688 2.061 3.091 2009 2010 2014 2014 2014 2014 2014 2014 0.152 0.228 2013 2013 2013 2009 2014 2013 0.452 3.814 4.704 0.672 2009 2009 2012 2009 2010 2010 2010 2012 0.672 1.008 2011 0.672 1.008 1.792 3.293 6.776 8.803 0.672 5.488 18.234 17.270 15.232 0.896 1.344 0.896 1.344 0.448 0.672 1.344 2.016 0.224 0.336 0.224 0.076 0.114 0.336 0.152 0.228 1.008 0.896 1.344 0.448 0.672 0.152 0.228 1.120 2.240 10.650 0.380 0.190 0.560 0.560 3.360 2.240 2.240 1.120 1.680 1.680 47.094 Phil. Hybrid Energy Systems Inc. (PHESI) San Carlos Wind Power Corp. No Proponent No Proponent Off-grid On-grid On-grid On-grid 3i Powergen 3i Powergen No Proponent Off-grid Off-grid Off-grid 0.224 0.336 1.120 1.680 2.240 3.360 5.600 2.800 0.560 0.380 4.480 7.168 0.672 1.120 11.580 Pacic Manufacturing Resources, Inc. No Proponent Phil. Hybrid Energy Systems Inc. (PHESI) 3i Powergen PNOC - EDC Phil. Hybrid Energy Systems Inc. (PHESI) On-grid On-grid Off-grid Off-grid Off-grid Off-grid 2.240 3.360 5.600 1.568 2.352 3.920 1.120 1.680 2.800 1.792 2.688 4.480 Suyo UPC Asia Corp. Pangasinan UPC Asia Corp. Pangasinan UPC Asia Corp. Coastal Power Devt. Corp. 2.554 3.830 6.384 Energy Logics Phils. Inc. 1.792 2.688 4.480 PNOC - EDC 2.061 3.091 5.152 PNOC - EDC 1.792 2.688 4.480 PNOC - EDC 11.066 16.598 14.112 23.184 On-grid/FS Completed On-grid/FS Completed On-grid/FS Completed On-grid On-grid On-grid On-grid On-grid 2007 Govt. Private 2008 2009 2010 2011 2012 2013 2014 Proponent Total

Remarks
Region
Location
Capacity (MW)
Northern Luzon Agribusiness Quadrangle
333.00
Burgos Ilocos Norte (Phase 1)
40.00
Burgos Ilocos Norte (Phase 2)
46.00
Pagudpod, Ilocos Norte
40.00
Pasuquin, Ilocos Norte
57.00
Suyo, Ilocos Sur
40.00
Western Pangasinan
25.00
Eastern Pangasinan
35.00
III
Carranglan, Nueva Ecija
50.00
113.40
IV-A
Mauban, Quezon
50.00
Caliraya, Laguna
25.00
IV-B
Sta. Cruz, Marinduque
5.00
Marinduque
3.40
Abra de Ilog, Occidental Mindoro
10.00
Puerto Galera, Oriental Mindoro
20.00
Central Philippines
95.10
IV-B
Tablas Island, Romblon
3.40
Romblon
1.70
Tablas Island, Romblon
5.00
Baleno, Masbate
5.00
VI
San Carlos, Negros Occidental
30.00
Pandan, Antique
20.00
San Remigio, Antique
20.00
Manoc-manoc, Aklan
10.00
15.00
CARAGA
Nuventa, Surigao del Sur
15.00
Government - Private
556.50
Total
62.326
114

Year 0.099
0.582 1.344 3.136 2.240 2.240
Annex A.1.25 ALTERNATIVE FUELS INVESTMENT REQUIREMENTS

2007
2009 2010 2011 2012 2013 2014

2008 0.215 Total 4.480 14.336 Remarks
Project
Location
Available Govt Private Govt Private Govt Private Govt Private Govt Private Govt Private Govt Private Govt Private Govt Private
Compressed Natural Gas
Natural Gas Vehicle for Public 2007 0.099

0.582 1.344 3.136 2.240
Metro Manila, 0.215 1.300 1.300

7.560 7.560 9.450 1.586 9.450 2.240
Transport (NGVPPT) 0.650 2006 0.650 0.945 2006 0.945 0.760 2007 0.080 7.000
12.500 1.586 0.680 15.500 1.586 0.680 19.110 1.586 2.240 14.852 2.240
Batangas, 4.480 0.650 0.650 1.890 1.890 3.505
Acquisition of OEM CNG-fed buses
Laguna
Pilot Phase of the Program covers up to 7 years and the 200 14.336 buses 2.600 2.600 Supply infrastructure 19.845 19.845 42.930
Biodiesel
Expansion/construction of biodiesel facilities
Metro Manila
Establishment of CME blend refuelling station
Nationwide
Bioethanol 1.586 0.705 0.025 1.586 0.680

10.806 22.908
Establishment of bioethanol facilities 8.586 0.680 14.086 0.680 17.086 0.680
Nationwide
Jatropha
Nursery 0.680 0.760

4.040
Nationwide 1.586 0.680
Plantation
Nationwide
Renery
Nationwide
Supply infrastructure, consultation meetings, IEC, Laboratory engine test, Capacity building
2.240 2.240
Government - Private
3.280 0.705 10.101 0.680 22.228 0.680 18.430 0.680 14.172
7.020 3.505 79.711

7.020 83.22
Total
Annex A.1.26 MAIN GRID INDICATIVE PROJECTS INVESTMENT REQUIREMENTS

2007 4.354 1.792 2.562 2.941 0.444 2.497 4.311 4.311 11.606 6.014 9.708 37.212 6.430 115.336 1.995 1.604 0.248 2.330 30.762 43.948 1.995 2.330 1.604 30.762 0.248 43.948 1.922 0.931 0.259 0.583 4.570 4.570 9.475 0.924 3.226 0.924 34.608 0.444 13.719 0.444 32.371 0.444 19.525 0.444 1.375 13.719 0.703 32.371 1.027 19.525 0.444 3.113 3.113 2.726 1.138 1.724 6.014 3.612 21.163 2.985 52.203 4.570 50.988 1.479 1.792 0.924 6.014 6.338 21.163 4.123 52.203 6.294 50.988 1.479 1.792 0.924 2.688 2.688 0.538 0.538 2008 2009 2010 2011 2012 2013 0.924 0.924 34.608 34.608 2014 0.000 Total 60.648 24.440 230.104 60.648 16.286 230.104 8.150 6.489 2.218 4.271 8.158 8.158 60.648 39.087 380.980 81.610 81.610 69.266 69.266
Project
Capacity
Year
Available
Luzon
Power Generation
3,103 MW
Transmission
Visayas
Power Generation
624 MW
Transmission
Mindanao
Power Generation
745.5 MW
Transmission
Government-Private
7.568 114.461
Total
17.620
46.920
121.766
7.568
9.475
3.226
34.608
60.648
420.07
116

Location 55.188 55.558 3.271 3.612 35.532 Bocaue, Bulacan Saoit, Burgos, Ilocos Norte 5.376 3.091 2.397 9.744 8.064 2009 2009 7.806 0.638 1.792 24.775 0.958 2.688 Year Available 2007 2008 2009 2010 2011 2012 2013 2014 60.648 Total Govt. 16.286 4.480 5.152 13.440 5.992 24.360 44.660 40.320 Private 230.104 1.596 Capacity (MW) 3103.00 15.00 40.00 0.555 0.370 2.061 3.595 14.616 17.864 16.128 0.555 0.370 26.796 24.192 0.555 0.370 0.555 0.555 0.370 0.555 1.792 0.370 0.555 2.688 0.370 0.555 12.992 5.376 16.240 0.444 14.163 1.064 4.794 7.862 19.969 3.557 0.538 19.488 8.736 8.064 24.360 2.218 Ilijan, Batangas City Nagsurot, Burgos, Ilocos Norte Mabalacat, Pampanga Subic Sta. Rita, Batangas Kalayaan, Laguna Bacman Geothermal Field, Sorsogon Bacman Geothermal Field, Sorsogon Bacman Geothermal Field, Sorsogon General Tinio, Nueva Ecija Pagbilao, Quezon Pantabangan, Nueva Ecija Quezon Province Mauban, Quezon 2009 2010 2010 2010 2011 2011 2011 2013 2013 2013 2014 2014 2014 2014 2.218 2.218 2.218 4.480 32.480 8.736 13.440 40.600 69.266 2.660 11.984 19.654 9.827 19.654 0.444 0.444 32.815 1.596 7.190 11.792 3.931 7.862 0.444 2010 2010 2010 2011 2011 2011 2012 2012 2010 2010 2010 2011 2011 2011 2012 8.250 5.896 11.792 0.444 1.837 2.330 0.426 0.358 1.546 30.762 0.638 0.538 2.318 10.080 8.960 8.228 41.267 118.765 43.948 2.218 0.538 0.444 2.755 0.358 4.570 Panay Brgy. Nipa, Concepcion, Iloilo Toledo City, Cebu Toledo City, Cebu Iloilo, Panay Island Dauin, Negros Oriental Libacao, Aklan Sibalom, Antique Cagayan de Oro City Plaridel, Jasaan, Misamis Oriental Baguio District, Davao City Lanao del Norte Southern Mindanao Sultan Kudarat Bukidnon 300.00 46.00 50.00 300.00 550.00 360.00 40.00 40.00 40.00 44.00 400.00 78.00 300.00 500.00 624.00 25.00 100.00 164.00 82.00 164.00 40.00 41.00 8.00 745.50 10.00 8.00 34.50 225.00 200.00 200.00 68.00 4472.50 15.120 13.440 12.342 3.046 119.475 4.570 11.397 4.150 35.532 60.648 18.510 4.592 0.896 81.610 1.064 0.896 3.864 25.200 22.400 20.570 7.616 380.980 399.490
Annex A.1.27 POWER GENERATION INVESTMENT REQUIREMENTS
Project
Luzon Bulacan Biomass-to-energy Project Burgos Wind Power Project Phase I (formerly Northern Luzon Wind Power Project Phase I) Ilijan CCGT Expansion Burgos Wind Power Project Phase II 2nd Phase CFB Coal-Fired Power Plant 2 x 150 MW Coal Fired Power Plant San Gabriel Power Plant Kalayaan Pumped Storage Power Plant III (CBK Expansion) Tanawon Geothermal Project Rangas Geothermal Project Manito-Kayabon Geothermal Project Balintingon River Multi-Purpose Project Pagbilao Expansion Pantabangan Expansion 2 x 150 MW CCGT Power Station Quezon Power Expansion Project Visayas Panay Biomass Power Project Coal-Fired Plant Toledo Expansion Project Phase I - 2 x 82 MW Toledo Expansion Project Phase II - 1 x 82 MW GBPC Coal-Fired Plant (Panay Power Corp.) 2 x 82 Dauin Geothermal Aklan Hydropower Project Villasiga HEP Mindanao Cagayan de Oro Biomass Power Project Cabulig Hydro Tamugan AB, Panigan and Suawan Hydroelectric Power Agus 3 Hydroelectric SM 200 MW CFBB CFTPP Sultan Kudarat Coal Tagoloan Hydropower Government - Private Total

Project LUZON GRID ON-GOING PROJECTS Batangas Transmission Reinforcement Project Bian - Sucat 230 kV T/L Hermosa - Balintawak 230 kV T/L Relocation Luzon S/S Expansion Project - 1 Luzon (North) T/L Upgrading Projects - 1 New Gamu 230 kV S/S Project Tap Hermosa - Balintawak T/L & S/S Projects (Package 1 & 2) PROJECTS FOR IMPLEMENTATION Binga - San Manuel 230 kV T/L Project Dasmarias - Rosario 230 kV T/L Luzon Mindoro Interconnection Luzon Power Circuit Breaker Replacement Project Luzon Substation Expansion Project - 2 Luzon Substation Expansion Project - 3 Luzon Transmission Equipment Upgrade Luzon Voltage Improvement Project - 1 Luzon Voltage Improvement Project - 2 San Jose 500 kV Reconguration San Jose - Balintawak Line 3 VISAYAS GRID ON-GOING PROJECTS Cebu - Negros Interconnection Uprating Project Cebu III Transmission (100 MVA Quiot SS) Leyte - Samar Reinforcement Project Negros V Transmission Project Negros - Panay Interconnection Uprating Project Northern Panay Backbone Project Visayas Capacitor Project -1 Wrigth - Calbayog 138 kV Transmission Line Project PROJECTS FOR IMPLEMENTATION Bohol Backbone Project New Naga S/S Project Visayas Power Circuit Breaker Replacement Program Southern Panay Backbone Transmission Project MINDANAO GRID ON-GOING PROJECTS Abaga - Kirahon 230 kV T/L Project Gen. Santos - Tacurong Trans. Project Kirahon - Pulangui (Maramag) 230 kV T/L Pulangui (Maramag) - Bunawan 230 kV T/L Mindanao Sub-station Expansion - 2005 Mindanao Substransmission Line San Francisco 138 kV S/S Project Zamboanga City Area 138 kV T/L PROJECTS FOR IMPLEMENTATION Aurora - Pulanco 138 kV T/L Mindanao Mobile Transformer Project Mindanao Reliability Compliance Project - Phase 1 Mindanao Power Circuit Breaker Replacement Program Total 2009 2009 2012 2010 0.200 9.370 0.701 0.015 0.016 5.653 0.240 0.252 0.028 0.297 3.001 0.006 0.066 0.155 2.555 20.579 2008 2008 2009 2009 2008 2007 2008 2008 1.655 0.446 0.187 1.246 0.116 0.003 0.062 0.397 0.049 0.031 0.723 0.081 0.002 0.009 0.368 0.008 0.004 0.762 0.014 0.000 0.003 0.002 0.010 0.005 0.000 2010 2010 2010 2010 4.311 0.020 0.006 0.006 0.001 1.995 0.023 0.019 0.162 0.002 1.604 0.068 0.303 0.145 0.054 0.248 8.158 2008 2007 2007 2008 2008 2009 2008 2008 0.443 0.078 0.006 0.039 0.514 0.732 0.152 0.534 0.145 0.021 0.005 0.040 0.159 0.398 0.025 0.106 0.002 0.002 0.000 0.012 0.002 0.027 0.009 0.001 0.001 0.000 0.003 0.005 0.004 2010 2009 2013 2011 2011 2013 2009 2009 2011 2013 2013 0.310 0.145 2.497 0.000 0.730 0.374 0.000 0.931 0.000 0.000 0.000 0.259 0.008 0.048 0.673 0.205 0.524 0.037 0.343 0.001 0.002 0.046 0.002 0.020 0.001 0.001 0.583 4.271 2007 2008 2007 2009 2009 2008 2009 0.429 0.369 0.101 1.015 0.115 0.020 0.003 0.137 0.056 0.010 0.524 0.016 0.001 0.001 0.003 0.564 0.009 0.000 0.002 1.302 0.005 Expected Time of Completion 2007 2.562 2008 2.726 2009 1.138 2010 1.724 2011 2012 2013 2014 Total 8.150
118
Annex A.1.28 TRANSMISSION DEVELOPMENT INVESTMENT REQUIREMENTS
Annex A.1.29 ENERGY EFFICIENCY AND CONSERVATION INVESTMENT REQUIREMENTS

Programs I. INFORMATION, EDUCATION AND COMMUNICATION CAMPAIGN A. Road Transport Patrol B. Fuel Economy Run and Seminars C. Infocommercials/Publications/Collaterals for Fuel Efciency and Conservation D. Power Patrol II. VOLUNTARY AGREEMENT A. Carless Day Program B. Carpooling Program C. Park and Wait Program D. Park and Ride Program III. ENERGY LABELING AND EFFICIENCY STANDARDS A. Efciency Standard and Labeling for RACs B. Energy Labeling Program for Refrigerators and Freezers C. Labeling for CFLs D. Ballast L Standard and Labeling for Flourescent Lamp Ballast E. Luminaire Installation F. Linear Flourescent Lamp G. Household Electric Fans H. Television Stand-by Power Reduction I. Performance Certication Of Fans and Blowers J. Labeling of Electric Motors IV. GOVERNMENT ENERCON PROGRAM A. Fuel Conservation B. Electricity Conservation V. ENERGY MANAGEMENT PROGRAMS A. Energy Audit Program 1. Cement 2. Sugar 3. Steel Industry 4. Chemical 5. Semiconductor 6. Pulp and Paper 7. Glass 8. Commercial/Institutional 9. Food Industry 10. Mining Industry B. Heat Rate Improvement of Power Plants C. System Loss Reductiion Program 1. Private Utilities (PUs and LGU owned) 2. Electric Cooperatives (RECs) D. Demand Side Management Government - Private 0.45708 3.54306 3.08598 0.48780 0.10000 0.10000 0.40000 0.40000 0.10000 0.10000 3.75568 0.60995 5.26697 4.24400 0.10000 0.40000 0.40000 0.10000 0.10000 4.65702 0.62798 5.83145 0.28159 0.10726 0.17433 0.10000 1.40000 1.00000 0.20000 0.20000 0.10000 0.02500 0.02500 0.10000 0.05000 0.10000 0.05000 0.15000 0.00113 0.28159 0.10726 0.17433 0.10000 1.50000 1.00000 0.20000 0.20000 0.10000 0.02500 0.02500 0.10000 0.05000 0.10000 0.05000 0.15000 0.10000 0.10000 0.03103 0.00118 0.28159 0.10726 0.17433 0.20000 1.90000 1.00000 0.20000 0.20000 0.10000 0.02500 0.02500 0.10000 0.05000 0.10000 0.05000 0.15000 0.40000 0.40000 0.40000 0.10000 0.10000 0.10000 0.03258 0.00124 0.28159 0.10726 0.17433 0.20000 0.00177 0.04868 0.00053 0.00222 0.00134 0.01459 0.06126 0.03702 0.00074 0.00293 0.00141 0.00432 0.00182 0.02042 0.08066 0.03888 0.11905 0.05014 0.00097 0.00369 0.00148 0.00468 0.00187 0.02680 0.10185 0.04082 0.12904 0.05165 0.00122 0.00470 0.00155 0.00506 0.00193 0.03388 0.00274 0.93420 0.07563 0.04543 0.00288 1.25270 0.07942 0.05712 0.00302 1.57499 0.08339 0.06919 0.00635 0.01114 0.00571 0.30708 0.15752 0.01215 0.00720 0.33490 0.19848 0.01526 0.00889 0.42078 0.24512 0.01582 0.00913 0.05933 1.63598 0.00378 0.00400 0.00020 0.00005 0.00005 0.00005 0.00005 0.08001 2.20568 0.00400 0.00020 0.00005 0.00005 0.00005 0.00005 0.09816 2.70702 0.00400 0.00020 0.00005 0.00005 0.00005 0.00005 0.11619 0.00328 0.00100 0.00810 0.05000 0.01100 0.00100 0.01000 0.05000 0.01500 0.00100 0.01000 0.05000 0.01500 0.00100 0.01000 2007 Govt. 0.01616 Private 0.05000 Govt. 0.02600 2008 Private 0.05000 Govt. 0.03000 2009 Private 0.05000 Govt. 0.03000 2010
119
Total
2011 Private 0.05000 Govt. 0.03000 0.01500 0.05000 0.00100 0.01000 0.00400 0.00020 0.00005 0.00005 0.00005 0.00005 3.20347 0.43607 0.25178 1.90758 0.17511 0.03377 0.12946 0.04286 0.13943 0.05320 0.03421 0.13948 0.01606 0.00959 0.08352 0.00667 0.00150 0.00632 0.00163 0.01090 0.00199 0.00130 0.28159 0.10726 0.17433 1.95000 1.00000 0.20000 0.20000 0.10000 0.02500 0.02500 0.10000 0.05000 0.10000 0.05000 0.15000 0.40000 0.40000 0.40000 0.10000 0.15000 5.20347 0.65127 0.15000 5.84581 0.67446 6.49708 0.10000 0.10000 0.20000 1.95000 1.00000 0.20000 0.20000 0.10000 0.02500 0.02500 0.10000 0.05000 0.10000 0.05000 0.15000 0.40000 0.40000 0.40000 0.10000 0.10000 0.10000 3.84581 0.44286 0.26435 2.30283 0.18387 0.04137 0.17434 0.04500 0.30048 0.05479 0.03592 0.05000 Private 0.05000 Govt. 0.03000 0.01500 0.00100 0.01000 0.00400 0.00020 0.00005 0.00005 0.00005 0.00005 0.16267 0.01933 0.01157 0.09803 0.00700 0.00180 0.00810 0.00171 0.01171 0.00205 0.00137 0.28159 0.10726 0.17433 0.20000
2012 Private 0.05000 Govt. 0.03000 0.01500 0.05000 0.00100 0.01000 0.00400 0.00020 0.00005 0.00005 0.00005 0.00005 4.48498 0.53291 0.31893 2.70276 0.19306 0.04964 0.22340 0.04725 0.32287 0.05644 0.03772 0.17969 0.01769 0.01187 0.11270 0.00735 0.00213 0.01004 0.00180 0.01256 0.00211 0.00144 0.28159 0.10726 0.17433 2.00000 1.00000 0.20000 0.20000 0.10000 0.02500 0.02500 0.10000 0.05000 0.10000 0.05000 0.15000 0.40000 0.40000 0.40000 0.10000 0.20000 6.53498 0.69148 7.20944 0.10000 0.10000 0.20000
2013 Private 0.05000 Govt. 0.03000 0.01500 0.05000 0.00100 0.01000 0.00400 0.00020 0.00005 0.00005 0.00005 0.00005 4.95433 0.48776 0.32725 3.10740 0.20271 0.05864 0.27692 0.04962 0.34630 0.05813 0.03960 0.20437 0.01946 0.01213 0.12755 0.01158 0.00248 0.01216 0.00189 0.01344 0.00217 0.00151 0.28159 0.10726 0.17433 2.00000 1.00000 0.20000 0.20000 0.10000 0.02500 0.02500 0.10000 0.05000 0.10000 0.05000 0.15000 0.40000 0.40000 0.40000 0.10000 0.20000 7.00433 0.71616 7.69581 0.10000 0.10000 0.20000
2014 Private 0.05000
Grand Total Govt. 0.22216 0.10428 0.05000 0.00800 0.07810 0.03178 0.00140 0.00035 0.00035 0.00035 0.00035 5.63495 0.53654 0.33447 3.51680 0.31927 0.06842 0.33524 0.05210 0.37065 0.05988 0.04158 1.04000 0.12691 0.07609 0.62742 0.04759 0.01137 0.05016 0.01281 0.06267 0.01571 0.00917 2.25272 0.85808 1.39464 2.00000 1.00000 0.20000 0.20000 0.10000 0.02500 0.02500 0.10000 0.05000 0.10000 0.05000 0.15000 0.40000 0.40000 0.40000 0.80000 0.20000 7.68495 4.91628 0.60000 0.80000 1.40000 14.70000 8.00000 1.60000 1.60000 0.80000 0.20000 0.20000 0.80000 0.40000 0.80000 0.40000 1.20000 2.40000 3.20000 3.20000 0.00000 1.10000 43.77222 48.68850 28.67222 3.49890 2.09790 17.29926 1.31246 0.31365 1.38313 0.35355 1.72782 0.43291 0.25264 0.40000 Private 0.40000
8.40111
120
Annex A.1.30 BARANGAY ELECTRIFICATION INVESTMENT REQUIREMENTS

Fund Source/Implementing Agency No. of Brgys NEA/ECs DOE Barangay Electrication Program Energy Regulation 1-94 Remote Area Electrication (inc. SPUG) PGMA Priority Areas (SC 38) DOE-Winrock AMORE Solar Energy for Rural Electrication and Developement (SERED) DOE-NEA DAR/Solar POwer Technology Support (SPOTS) PNOC-EDC IPPs MIRANT - Grid (next 500) - Grid (Beacon) - Mirant/Amore 2 - Mirant/DOE - Sustainable Solar Market Package (SSMS) KEPCO Luzon Hydro Philippine Rural Eelectricity Services (PRES) Private Investor-Owned Utilities (PIOUs) Cotabato Light & Power Government and Private Total 106 1 54 53 180 1 32 1 1 892 892 0.688 0.212 0.002 0.108 0.053 0.180 0.001 0.272 0.002 0.002 0.910 1162 1162 1.444 2.636 1.192 2.132 4.23 1.598 96 0.816 300 0.300 0.212 0.002 0.108 0.053 0.480 0.001 1.088 0.002 0.002 2.102 4.234 1.088 0.002 9 29 395 0.009 0.058 0.556 210 12 38 300 0.420 0.012 0.076 0.300 0.021 0.134 0.856 0.021 0.134 0.856 301 125 48 28 2 25 21 1 2007 Govt 0.500 0.179 0.048 0.056 0.004 0.050 0.021 0.021 0.001 0.022 Private No. of Brgys 160 556 20 22 118 186 2008 Govt 0.320 1.112 0.040 0.044 0.236 0.372 0 Private Govt 0.820 1.291 0.022 Total Private Total 0.820 1.313
121
Annex A.1.31 DOWNSTREAM INDUSTRY INVESTMENT REQUIREMENTS

2009 2.66 0.00 13.83 4.56 0.02 2.66 19.03 28.63 0.45 27.66 55.97 35.28 10.03 0.02 101.80 1.60 0.02 35.33 0.02 17.14 18.39 28.13 101.30 0.64 0.50 0.50 2010 2011 2012 2013 0.51 34.82 33.20 2014 0.52 16.62 16.60 Total 10.39 199.26 147.26 35.28 16.64 0.08 209.65
Sector
2007
2008
Oil
2.57
2.49
Natural Gas
0.00
0.00
Power Plant
LNG Terminal
Pipelines
Relling Stations
Total
2.57
2.49
122
Annex B: HISTORICAL PERFORMANCE

B.1 B.2a B.2b B.2c B.2d B.3a B.3b B.4 B.5 B.6 B.7 B.8 B.9 B.10 Energy Mix (In Million Barrels of Fuel Oil Equivalent, MMBFOE and Thousand Tons of Oil Equivalent, KTOE) Oil and Gas Sector Highlights Coal Sector Highlights Geothermal Sector Highlights Hydropower Sector Highlights Petroleum Products Consumption (In Thousand Barrels, MB) Oil Demand By Sector (In Thousand Barrels, MB) Oil Demand by Product (In Thousand Barrels, MB) Coal Consumption by Sector (In Metric Tons, MT) Coal Importation by Source (In Metric Tons, MT) Installed Generating Capacity (In Megawatt, MW) Power Generation by Source (In Gigawatt-Hour, GWh) Electrification Profile Energy Economy Indicators
123
Annex B.1 ENERGY MIX

1996 45.14 108.86 0.13 0.28 0.02 0.03 1.69 3.94 5.07 10.46 16.27 43.10 21.95 51.05 0.00 0.00 52.24 41.69 10.55 100.00 0.00 0.00 0.00 0.00 138.25 51.77 140.00 50.93 119.19 44.63 113.52 41.30 19.06 7.14 26.48 9.63 267.05 100.00 274.88 100.00 3.92 2.93 48.23 49.07 137.57 109.79 27.78 0.00 263.37 (4.19) 47.76 0.00 0.00 129.92 48.67 127.80 104.68 39.22 102.96 25.24 9.46 24.84 0.00 266.93 100.00 268.76 1.36 0.68 51.33 52.45 0.00 0.00 47.55 38.22 9.24 124.95 99.46 25.49 43.15 115.99 0.11 0.27 0.01 0.05 1.56 4.23 4.15 8.74 17.08 53.09 20.23 49.62 45.14 0.10 0.02 1.65 3.40 20.66 19.31 128.81 0.29 0.04 3.66 13.52 63.09 48.20 48.23 134.88 0.11 0.39 0.02 0.06 1.37 4.95 5.06 13.45 23.63 69.24 18.05 46.79 49.07 0.14 0.02 1.80 4.89 25.19 17.02 125.79 0.66 0.80 4.50 12.25 62.19 45.40 47.76 0.25 0.30 1.71 4.65 23.61 17.24 137.02 4.29 10.03 5.56 12.13 61.00 44.01 51.33 140.96 1.61 3.66 3.76 15.03 2.08 7.30 4.54 13.57 22.85 58.50 16.49 42.64 52.33 1.36 5.69 2.72 5.05 21.77 15.49 143.83 3.31 14.12 9.07 14.82 61.24 41.28 53.51 146.84 1.23 4.23 5.25 18.70 3.37 10.53 5.51 14.46 22.78 58.98 15.36 39.93 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 54.57 148.65 1.57 3.87 6.95 17.52 3.91 8.61 5.37 17.14 21.92 62.33 14.84 39.14 55.40 1.44 6.53 3.21 6.39 23.23 14.59
1994
1995
109.72 1.55 0.03 5.30 10.11 37.64 55.09
50.37 0.71 0.01 2.43 4.64 17.28 25.29
106.86 0.89 0.03 4.71 10.75 36.54 53.95
46.51 0.39 0.01 2.05 4.68 15.90 23.48
107.94 0.31 0.05 4.05 12.12 38.91 52.49
Indigenous Energy Oil Natural Gas Coal Hydro Geothermal Biomass (Bagasse and other RE) Solar and Wind CME Imported Energy Oil Coal Ethanol Total Energy Growth Rate, percent Self Sufciency, percent
0.00 0.00 108.10 49.63 104.03 47.76 4.07 1.87 217.82 100.00 7.77 50.37
0.00 0.00 122.90 53.49 116.65 50.77 6.25 2.72 229.77 100.00 5.49 46.51
0.00 0.00 0.00 0.00 0.00 0.00 131.20 54.86 143.44 56.85 140.99 54.86 120.29 50.30 127.91 50.70 125.33 48.77 10.91 4.56 15.53 6.15 15.65 6.09 239.13 100.00 252.30 100.00 256.98 100.00 4.08 5.50 1.86 45.14 43.15 45.14
0.00 0.01 0.00 0.03 0.01 0.00 0.00 0.00 0.00 46.49 122.21 45.42 119.65 44.60 37.00 96.52 35.87 91.43 34.08 9.48 25.69 9.55 28.21 10.51 0.01 0.00 0.01 0.00 268.79 100.00 269.05 100.00 268.30 100.00 0.01 0.10 (0.28) 53.51 54.57 55.40
NOTE: Biomass supply is based on 2004 Household Energy Consumption Survey
(In Thousand Tons of Oil Equivalent, KTOE)

1996 45.14 15,719.52 0.13 40.07 0.02 4.50 1.69 568.24 5.07 1,511.12 16.27 6,223.75 21.95 7,371.84 43.15 16,749.54 45.14 18,599.54 0.11 38.77 0.10 42.12 0.01 7.66 0.02 5.90 1.56 610.77 1.65 528.28 4.15 1,261.46 3.40 1,952.08 17.08 7,665.64 20.66 9,110.89 20.23 7,165.23 6,960.27 48.23 0.11 0.02 1.37 5.06 23.63 18.05 1997 1998 1999 2000 2001 2002 47.76 19,785.15 0.25 619.10 0.30 1,448.75 1.71 802.19 4.65 1751.12 23.61 8,808.54 17.24 6,355.45 2003 2004 51.33 20,354.27 52.33 20,769.68 1.61 527.82 1.36 478.44 3.76 2,208.05 5.69 2,039.21 2.08 1,054.33 2.72 1,309.07 4.54 1,959.48 5.05 2,139.54 22.85 8,447.30 21.77 8,842.52 16.49 6,157.29 15.87 5,960.90 2005 2006 53.51 21,203.31 54.57 21,464.50 55.40 1.23 610.19 1.57 559.25 1.44 5.25 2,700.85 6.95 2,529.44 6.53 3.37 1,519.89 3.91 1,243.32 3.21 5.51 2,088.19 5.37 2,474.78 6.39 22.78 8,516.10 21.92 9,000.14 23.23 15.36 5,766.34 14.84 5,652.33 14.59 - 0.00 - 0.00 0.00 - 0.00 0.00 1.63 0.00 4.70 0.01 - 0.00 - 0.00 0.00 - 0.00 0.00 0.11 0.00 0.54 0.00 20,216.50 50.93 19,865.78 52.24 18,760.19 48.67 18,454.22 47.55 18,043.47 46.49 17,648.60 45.42 17,277.33 44.60 16,392.20 41.30 15,853.93 41.69 15,115.72 39.22 14,867.79 38.22 14,362.49 37.00 13,937.28 35.87 13,202.72 34.08 3,824.30 9.63 4,011.85 10.55 3,644.47 9.46 3,586.42 9.24 3,680.98 9.48 3,709.93 9.55 4,073.19 10.51 0.00 0.00 0.00 1.40 1.41 39,693.13 100.00 38,029.99 100.00 38,545.34 100.00 38,808.49 38,813.15 100.00 38,851.91 100.00 38741.83 100.00 2.93 (4.19) 1.36 0.68 0.01 0.10 (0.28) 49.07 47.76 51.33 52.45 53.51 54.57 55.40
1994
1995
15,843.02 50.37 15,430.78 224.33 0.71 127.95 4.54 0.01 4.39 764.87 2.43 680.70 1,459.56 4.64 1,551.69 5,435.20 17.28 5,276.10 7,954.52 25.29 7,789.95
46.51 15,586.27 0.39 44.16 0.01 7.40 2.05 585.00 4.68 1,750.38 15.90 5,619.24 23.48 7,580.08
19,476.64 49.07 18,164.21 55.97 0.14 95.58 8.75 0.02 115.32 714.73 1.80 649.10 1,941.85 4.89 1,768.73 9,998.36 25.19 8,980.13 6,756.97 17.02 6,555.36
Indigenous Energy Oil Natural Gas Coal Hydro Geothermal Biomass (Bagasse and other RE) Solar and Wind CME Imported Energy Oil Coal Ethanol Total Energy Growth Rate, percent Self Sufciency, percent
- 0.00 - 0.00 0.00 - 0.00 - 0.00 - 0.00 - 0.00 - 0.00 0.00 - 0.00 - 0.00 - 0.00 15,609.71 49.63 17,747.31 53.49 18,944.60 54.86 20,712.11 56.85 20,358.35 54.86 19,962.64 51.77 15,022.15 47.76 16,844.36 50.77 17,369.85 50.30 18,469.94 50.70 18,098.22 48.77 17,210.83 44.63 587.56 1.87 902.95 2.72 1,574.75 4.56 2,242.16 6.15 2,260.12 6.09 2,751.81 7.14 31,452.73 100.00 33,178.09 100.00 34,530.87 100.00 36,431.63 100.00 37,107.89 100.00 38,562.18 100.00 7.77 5.49 4.08 5.50 1.86 3.92 50.37 46.51 45.14 43.15 45.14 48.23
124
125 Annex B: HISTORICAL PERFORMANCE

Seismic Lines (km.) (MMBLS) 3.57 4.87 3.89 2.89 2.52 2.04 2.18 1.88 1.73 1.09 0 1 1 0 0 0 2 0 0 0 2 0 0 0 0 0 0 0 2 11 7 0 0 0 7 0 0 0 0 0 0 3.26 3.32 1.67 0.95 0.33 0.30 0.29 0.31 0.42 0.47 1.27 0.15 0.14 0.21 0.18 5,663 5 0 0 0 0 0 0 0 4 4 10 10 15 5 3 0 1 5 6 0 0 0 0 0 0 2 0 6 2 8 0 4 1 7 0 4 0 9 0 2 0 4 1 2 3 7 2 2 3 1 2 2 2 0 1 0 0 1 0 0 0 0 1 3 0 0 2 0 3 22,887 3,343 540 2,524 2,794 2,918 504 2,734 2,917 10,238 10,637 3,727 9,995 45,978 106,320 130,114 0 210 0 10,896 2,200 0 1,216 11,297 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.30 3.10 4.86 4.40 5.60 5.10 GP Wells GSEC SC Oil Condensate (MMBLS) Discovery Production Gas (MMCF) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 233.68 225.51 310.79 203.21 341.70 253.20 375.90 4,951.27 62,204.97 94,803.00 87,556.60 115,966.00 108,606.00
Annex B.2a OIL AND GAS SECTOR HIGHLIGHTS
No. of Wells Drilled
Onshore
Offshore
(Cum.)
(Cum.)
1982
32
93
1983
35
95
1984
36
96
1985
36
96
1986
36
96
1987
37
99
1988
39
104
1989
42
109
1990
44
111
1991
46
119
1992
46
124
1993
46
128
1994
49
136
1995
55
139
1996
56
141
1997
56
143
1998
56
146
1999
58
147
2000
61
155
2001
63
156
2002
63
156
2003
67
156
2004
67
158
2005
67
158
2006
68
158
Notes: * Includes 2D and 3D seismic lines acquisition GP - Geophysical Permit GSEC - Geophysical Survey and Exploration Contract SC - Service Contract
Annex B.2b COAL SECTOR HIGHLIGHTS

Annual Production (MT, R.O.M.) 557,983 1,019,594 1,216,388 1,261,564 1,235,503 1,208,072 1,358,241 1,360,416 1,243,013 1,325,591 1,660,660 1,581,873 1,449,160 1,333,185 1,108,381 1,076,611 1,157,204 1,176,658 1,353,453 1,229,822 1,664,762 2,030,289 2,726,499 3,164,432 2,529,308 315 314 312 370 384 384 383 382 381 399 423 421 420 420 420 440 440 315 370 371 354 354 337 312 263 Proven Cumulative Reserves (In Million MT) Potential 1,538 1,506 1,535 1,558 1,558 1,558 1,558 1,558 1,558 1,558 1,558 2,367 2,367 2,367 2,367 2,367 2,367 2,367 2,367 2,367 2,367 2,367 2,367 2,367 2,367
No. of Service Contracts (Cum.) 59 63 68 71 71 78 88 92 100 104 108 112 115 115 118 122 123 124 124 125 126 128 128 138 140
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
126

No. of Wells Drilled (Cum.) 287 324 336 350 356 362 373 394 413 433 456 486 534 572 595 607 608 610 614 619 627 637 648 658 661 2,017 2,017 2,017 1,629 1,797 2,017 2,017 2,017 2,017 2,043 1,900 1446 1819 1856 1931 1931 1931 1931 1931 1931 1978 1978 1,767 1154 1,788 1073 1,589 963 1,470 888 1,402 888 1,316 888 5,466 5,758 5,700 5,667 6,320 6,135 6,534 7,237 8,914 10,594 11,626 10,381 10,243 9,822 10,282 9,902 10,465 1,309 888 5,316 1,367 894 4,844 1,427 894 4,532 1,448 894 4,576 1,485 894 4,929 1,348 894 4,532 7.81 8.50 7.89 7.81 8.35 9.17 9.42 9.93 9.83 9.77 10.90 10.58 11.27 12.48 15.37 18.27 20.04 17.90 17.66 16.93 17.73 17.07 18.04 1,546 784 4,077 7.03 1,377 559 3,540 6.10 Capacity (MW) (Cum. MW) (GWh) (MMBFOE) Proven Steam Installed Gen. Capacity Electricity Generation Oil Displacement Forex Savings (Million US$) 200.19 201.25 217.93 226.65 103.04 132.60 113.00 148.48 195.55 175.22 176.80 155.84 166.94 175.80 217.65 235.33 186.43 319.65 546.82 420.25 441.51 474.17 625.07 880.98 1,140.72
Annex B.2c GEOTHERMAL SECTOR HIGHLIGHTS
No. of Fields
(Cum.)
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Annex B.2d HYDROPOWER SECTOR HIGHLIGHTS

Electricity Generation (GWh) 3,773 2,968 5,278 5,553 6,017 5,247 6,264 6,485 6,062 5,145 4,440 5,030 5,862 6,232 7,030 6,069 5,066 7,840 7,799 7,104 7,033 7,870 8,593 8,387 9,939 10.45 8.87 7.66 8.67 10.11 10.74 12.12 10.46 8.73 13.52 13.45 12.25 12.13 13.57 14.82 14.46 17.14 11.18 10.80 9.05 10.37 9.57 9.10 5.12 6.51 (MMBFOE) Equivalent Fuel Oil Displacement Forex Savings (Million US$) 213.37 146.51 253.80 255.34 135.49 153.52 146.12 181.13 216.87 156.57 137.72 138.33 154.84 178.58 234.17 197.35 105.95 236.55 366.82 287.59 303.15 379.93 522.40 746.13 1,083.40
Installed Generating Capacity (MW) 1,262 1,585 1,666 1,961 2,147 2,142 2,139 2,147 2,153 2,155 2,257 2,259 2,254 2,301 2,301 2,301 2,301 2,301 2,301 2,518 2,518 2,867 3,217 3,223 3,257
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
128

1996 15,791 4,142 36,297 9,119 4,577 6,187 35 23,236 99,385 110,463 108,774 110,576 103,702 104,328 104,294 26,826 26,470 24,300 17,571 17,793 15,559 35 35 36 28 26 24 25 13,624 102,952 7,694 5,357 5,869 6,701 6,750 6,422 6,725 5,049 5,007 5,178 4,533 4,014 3,669 3,330 9,927 10,690 11,904 12,288 12,214 12,732 13,183 39,354 38,575 39,956 39,884 40,435 41,787 41,492 42,194 12,754 2,980 7,349 26 13,978 104,110 4,470 4,970 5,420 5,545 5,691 5,938 5,975 5,755 17,109 17,671 17,913 17,151 17,404 18,165 18,597 19,074 1997 1998 1999 2000 2001 2002 2003 2004 2005 18,980 5,159 39,916 11,534 2,246 7,870 26 12,439 98,171 2006 17,835 4,708 37,727 10,931 1,747 7,899 27 11,123 91,998
1997 26,995 13,439 71,526 20,768 2,117 2,614 137,457 134,609 2,444 2,736 19,145 70,251 14,197 15,229 70,771 18,588 3,646 2,342 127,349 25,835 16,773 1998 1999 2000 13,565 14,113 65,559 17,306 4,657 2,066 117,267 2001 14,249 13,118 70,370 13,304 5,672 1,865 118,577 2002 9,720 13,336 71,085 12,155 5,683 2,036 114,015 2003 11,288 13,042 69,164 13,130 5,435 2,181 114,240 2004 13,231 12,871 71,930 12,510 4,775 2,024 117,341 2005 9,957 10,381 68,940 12,243 4,597 2,010 108,128 2006 7,280 9,344 64,562 11,394 4,911 1,786 99,277
Annex B.3a PETROLEUM PRODUCTS CONSUMPTION
1994
1995
Premium Gasoline
11,478
13,780
Regular Gasoline
3,597
3,959
Diesel
29,526
33,470
LPG
6,555
8,335
Kerosene
4,283
4,361
Avturbo
4,985
4,914
Avgas
52
34
Fuel Oil
14,298
23,078
Total
74,776
91,932
Annex B.3b OIL DEMAND By Sector
1994
1995
1996
Power Generation
22,981
26,916
26,006
Residential
9,825
11,614
12,473
Transport
49,142
57,686
65,595
Industrial
12,637
18,973
17,339
Commercial
1,335
1,482
1,642
Agriculture
1,836
2,177
2,336
Total
97,757
118,847
125,391
Annex B.4 OIL DEMAND By Product

1997 13,439 8,779 4,659 71,526 21,570 32,926 9,301 7,729 20,768 127 323 3,712 16,605 2,117 1,020 506 591 2,614 9 66 2,210 329 26,995 23,957 3,038 137,457 42,392 50,782 21,578 9,927 5,049 7,729 1998 14,197 9,534 4,663 70,251 22,630 32,238 9,992 5,391 19,145 102 269 3,452 15,322 2,736 1,053 749 934 2,444 11 76 2,135 222 25,835 22,647 3,188 134,609 41,763 49,117 22,641 10,690 5,007 5,391 1999 15,229 10,419 4,809 70,771 23,316 32,751 8,800 5,905 18,588 102 304 3,924 14,258 3,646 1,383 1,186 1,078 2,342 17 64 2,096 164 16,773 14,924 1,849 127,349 41,805 39,224 23,333 11,904 5,178 5,905 2000 14,113 9,949 4,164 65,559 22,684 32,868 3,278 6,729 17,306 558 320 3,611 12,817 4,657 1,780 1,547 1,331 2,066 13 49 1,859 146 13,565 11,694 1,871 117,267 41,756 29,266 22,696 12,288 4,533 6,729 2001 13,118 9,443 3,675 70,370 23,084 32,914 7,595 6,777 13,304 703 282 3,672 8,646 5,672 2,068 2,224 1,380 1,865 11 57 1,625 172 14,249 12,434 1,815 118,577 42,250 30,227 23,095 12,214 4,014 6,777 2002 13,336 9,976 3,360 71,085 24,089 34,514 6,033 6,446 12,155 573 258 3,669 7,655 5,683 2,180 1,793 1,710 2,036 13 51 1,811 161 9,720 8,248 1,473 114,015 43,260 23,806 24,102 12,732 3,669 6,446 2003 13,042 10,070 2,972 69,164 24,561 34,099 3,748 6,750 13,130 759 303 3,935 8,133 5,435 2,348 1,578 1,509 2,181 12 56 1,880 233 11,288 9,667 1,621 114,240 43,113 23,291 24,573 13,183 3,330 6,750 2004 12,871 10,177 2,695 71,930 24,817 35,541 4,192 7,375 12,510 346 242 3,676 8,247 4,775 2,226 1,232 1,316 2,024 12 43 1,745 223 13,231 11,298 1,933 117,341 44,127 25,277 24,829 12,754 2,980 7,375 2005 10,381 8,392 1,990 68,940 24,129 33,567 3,335 7,896 12,243 752 221 3,612 7,658 4,597 2,378 924 1,294 2,010 10 36 1,813 151 9,957 8,436 1,521 108,128 41,438 20,875 24,139 11,534 2,246 7,896 2006 9,344 7,781 1,563 64,562 22,530 31,253 2,810 7,925 11,394 790 145 3,602 6,858 4,911 2,316 1,256 1,339 1,786 14 38 1,617 116 7,280 6,181 1,099 99,277 38,826 17,304 22,544 10,931 1,747 7,925
Residential LPG Kerosene Transport Gasoline Diesel Fuel Oil Aviation Fuel Industrial LPG Kerosene Diesel Fuel Oil Commercial LPG Diesel Fuel Oil Agriculture Gasoline Kerosene Diesel Fuel Oil Power Generation Fuel Oil Diesel Total Diesel Fuel Oil Gasoline LPG Kerosene Aviation Fuel
1994 9,825 5,846 3,980 49,142 15,055 24,784 4,265 5,038 12,637 85 239 3,076 9,237 1,335 625 710 1,836 20 65 1,666 86 22,981 20,145 2,836 97,757 32,362 34,443 15,075 6,555 4,283 5,038
1995 11,614 7,548 4,067 57,686 17,723 28,189 6,825 4,948 18,973 86 234 3,309 15,345 1,482 702 781 2,177 16 61 1,973 127 26,916 23,654 3,262 118,847 36,732 46,732 17,739 8,335 4,361 4,948
1996 12,473 8,215 4,258 65,595 19,915 31,059 8,399 6,222 17,339 113 258 3,130 13,838 1,642 791 851 2,336 18 61 2,108 148 26,006 23,058 2,948 125,391 39,245 46,294 19,933 9,119 4,577 6,222
130

Power Generation 1,256,976 1,420,972 2,470,363 3,275,721 4,045,758 4,882,889 7,170,194 6,995,997 6,525,469 6,307,223 6,586,695 7,832,044 7,037,396 73,333,220 21,527,107 2,148,249 1,924,519 1,667,000 1,560,492 1,245,138 1,271,841 1,299,117 1,266,257 1,338,172 1,553,741 1,391,036 36,941 47,375 25,611 32,588 28,464 41,768 52,927 46,394 31,704 77,113 78,118 695,157 1,342,289 47,452 1,279,619 42,663 Cement Indl/Direct Uses* Total 2,579,258 2,810,713 3,898,340 4,876,836 5,409,540 6,181,734 8,497,775 8,309,607 7,823,534 7,914,109 8,285,399 9,833,676 9,263,763 95,555,482
Annex B.5 COAL CONSUMPTION By Sector
(In Metric Tons, MT)
Year
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Total
* Energy Uses
Annex B.6 COAL IMPORTATION By Source
(In Metric Tons, MT)
1994
Source Australia China Indonesia Vietnam South Africa Russia Total 25,343 4,248,132 4,282,158 5,213,736 7,245,734 7,601,077
348,637 497,508 192,194
1995 367,818 338,303 561,754 140,903
1997 1,282,877 256,676 2,503,960 179,276
1998 1,229,439 603,882 2,311,926 136,911
1999 2,435,486 369,632 2,277,284 131,334
2000 422,174 3,844,362 2,735,531 159,903 83,765
2001 1,065,957 3,134,884 3,117,128 283,108
2002 372,981 3,492,002 2,725,519 275,357 39,155 6,905,014
2003 348,444 3,370,910 2,756,116 250,433 69,136 6,795,039
2004 368,484 3,425,329 2,638,767 468,510 73,112 6,974,202
2005 589,680 1,947,217 4,024,773 467,371
2006 809,008 1,015,776 5,289,959 602,557
74,893 1,113,232
302,001 1,710,779
1996 728,872 88,299 1,757,910 139,311 125,803 143,423 2,983,618
7,029,041
7,717,301
132

Coal 50 50 350 350 530 535 525 525 525 405 405 441 550 850 1,600 1,600 2,200 3,493 3,963 3,963 3,963 3,958 3,967 3,967 4,177 3 3 3 1,063 2,763 2,763 2,763 2,763 2,763 191 184 167 167 167 NA NA NA NA NA NA NA NA NA NA NA NA NA NA 25 26 Geothermal 559 784 894 894 894 894 894 888 888 888 888 963 1,073 1,154 1,417 1,819 1,856 1,931 1,931 1,931 1,931 1,932 1,932 1,978 1,978 Diesel/Oil 3,277 3,338 3,011 2,578 2,741 2,790 2,915 3,136 3,136 3,341 3,399 4,296 5,335 5,425 5,844 5,973 5,568 4,839 4,987 3,927 3,527 3,604 3,669 3,663 3,602 Natural Gas NRE T Total 5,148 5,757 5,921 5,783 6,503 6,545 6,640 6,863 6,869 6,789 6,949 7,959 9,212 9,730 11,162 11,693 11,928 12,567 13,185 13,402 14,702 15,124 15,548 15,619 15,803
Annex B.7 INSTALLED GENERATING CAPACITY
(In Megawatts, MW)
Year 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Hydropower 1,262 1,585 1,666 1,961 2,147 2,142 2,139 2,147 2,153 2,155 2,257 2,259 2,254 2,301 2,301 2,301 2,301 2,301 2,301 2,518 2,518 2,867 3,217 3,223 3,257
Annex B.8 POWER GENERATION By Source

Coal 433 568 1,083 3,347 2,643 2,246 2,582 2,413 1,934 1,942 1,791 2,015 1,348 2,109 4,855 7,363 9,388 11,183 16,663 18,789 16,128 14,939 16,194 15,257 15,294 12 20 16 17 848 8,771 13,139 12,384 16,861 16,366 19 55 Geothermal 3,540 4,077 4,532 4,929 4,576 4,532 4,844 5,316 5,466 5,758 5,700 5,667 6,320 6,135 6,534 7,237 8,914 10,594 11,626 10,442 10,242 9,822 10,282 9,902 10,465 Natural Gas Diesel/Oil 11,316 12,988 9,460 7,947 7,565 10,242 10,471 10,966 12,434 12,804 13,939 13,867 16,929 19,078 18,288 19,116 18,190 11,799 9,185 9,867 6,293 7,170 8,504 6,141 4,665 NRE 344 853 827 990 996 374 377 393 431 T Total 19,406 21,454 21,180 22,766 21,797 22,641 24,538 25,573 26,327 25,649 25,870 26,579 30,459 33,554 36,707 39,797 41,578 41,432 45,290 47,050 48,467 52,939 55,957 56,568 56,784
(In Gigawatt-Hour, GWh)
Year 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Hydropower 3,773 2,968 5,278 5,553 6,017 5,247 6,264 6,485 6,062 5,145 4,440 5,030 5,862 6,232 7,030 6,069 5,066 7,840 7,799 7,104 7,033 7,869 8,593 8,387 9,939
134

1994 41,945 28,087 66.88 1995 41,945 28,818 68.62 1996 41,945 29,400 70.01 1997 41,945 30,254 72.04 1998 41,945 31,599 75.24 1999 41,945 32,281 76.87 2000 41,945 33,647 80.12 2001 41,945 34,900 83.10 2002 41,945 36,578 87.10 2003 41,945 37,748 89.90 2004 41,945 38,763 92.41 2005 41,945 39,381 93.89 2006 41,945 39,910 95.15
Annex B.9 ELECTRIFICATION PROFILE
Total Number of Barangays Cum. Barangays Energized Electrication Level, percent
1992 41,945 26,785 63.78
1993 41,945 27,426 65.31
Annex B.10 ENERGY-ECONOMY INDICATORS

1995 802.22 4.68 68.62 25.71 16.62 209.75 43.16 222.86 6.25 249.74 (0.46) 255.38 2.26 265.46 3.95 278.71 4.99 849.12 5.85 69.95 26.22 19.32 892.86 5.15 71.54 29.47 18.86 887.91 (0.55) 73.15 40.89 12.13 918.00 3.39 74.80 39.09 17.21 958.40 4.40 76.50 44.25 26.14 990.04 1.76 78.03 51.00 22.81 1,032.97 4.34 79.59 51.61 23.80 1,081.50 4.70 81.18 54.22 26.79 1,138.02 5.23 82.80 56.00 37.54 1,209.47 4.97 84.46 55.06 49.32 273.92 0.23 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 1,274.42 5.37 86.97 51.29 61.48 272.88 (0.38)
1994
766.37 4.39 66.54 26.42 15.32
146.51 7.09
102.72 7.02
114.01 10.99
117.85 3.37
112.22 (1.22)
108.96 (2.91)
105.16 (3.49)
107.64 2.36
30,459.00 14.60 9.23 2.35 2.17 2.61 2.62 1.61 0.58 1.07
33,554.00 10.16
36,708.00 9.40
241.73 8.47 171.79 11.03 132.93 12.80 132.93 12.80 39,797.00 8.42 47,040.10 3.86 (0.26) (0.70) 2.20 2.52 1.13 48,467.44 3.03 0.52 (0.67) 0.70 2.47 1.05 52,941.00 9.23 0.84 (0.74) 1.96 2.45 0.97
240.24 (0.62) 171.36 (0.25) 129.20 (2.81) 129.21 (2.80) 41,578.00 4.48
245.49 2.19 176.09 2.76 122.63 (5.09) 122.65 (5.08) 41,432.00 (0.35)
250.89 2.20 174.43 (0.94) 113.61 (7.36) 106.61 (13.08) 45,290.00 9.31
55,957.00 5.70 0.96 0.45 1.09 2.45 0.95
99.49 (2.67) 56,567.74 (0.14) 0.05
96.20 (3.30) 56,784.13 0.38 (0.07)
1.62
1.60
3.33
1.64 2.14 2.48 2.48 1.63
1.11 0.45 5.06 5.04 (8.06)
0.64 0.81 (1.50) (1.50) (0.10)
0.50 (0.21) (1.67) (2.97) 2.12
(0.54) (0.03) 2.26
(0.62) 0.07 2.14
1.91
0.82 46.77 3.24 1.18
0.75 44.56 3.14 1.11
Economic Parameters GDP (in billion PhP) Growth Rate (in percent) Population (million) Forex (PhP/US$) Crude Cost ($ per barrel) Energy Energy (in MMBFOE) Growth Rate Energy (net of NRE, in MMBFOE) Growth Rate Petroleum (in MMBFOE) Growth Rate Oil (in MMBFOE) Growth Rate Electricity (in GWh) Growth Rate Elasticity Energy-to-GDP Energy-to-GDP (net of NRE) Petroleum-to-GDP Oil-to-GDP Electricity-to-GDP Intensity Energy-to-GDP (BFOE/P0000) Energy-to-GDP (BFOE/P0000) (net of NRE) Petroleum-to-GDP (BFOE/P0000) Oil-to-GDP (BFOE/P0000) Electricity-to-GDP (kwh/P000) Energy per capita (BFOE) Petroleum per capita (BFOE) Energy per capita (BFOE) (net of NRE) Oil per capita (BFOE) Electricity per capita (kwh) Imported Oil (MMBFOE) Imported Oil Share to Total Energy Oil Import Bill (CIF, MM$) Oil Fraction in Total Import Bill (%) 1.42 23.49 41.83 3.06 1.66 0.00 6.86 489.00 113.98 54.34 2.40 16.06 1.39 5.76 43.23 3.19 1.68 0.00 6.10 524.80 117.40 52.68 2.85 16.68 2.71 1.92 1.49 24.84 44.57 3.38 1.86 5.83 7.05 556.30 132.76 54.92 2.89 17.61 2.71 1.93 1.46 50.56 46.83 3.28 1.77 4.19 10.65 568.39 128.93 53.67 1.94 19.51 2.67 1.92 1.34 (15.00) 45.13 3.28 1.64 4.50 7.13 553.90 123.30 49.80 2.47 24.14 2.62 1.82 1.19 (16.71) 47.26 3.28 1.49 3.94 4.35 592.03 113.30 45.16 4.09 41.70 47.51 3.20 1.44 0.00 4.92 602.85 111.33 44.58 3,442.00 46.92 3.21 1.37 0.00 4.58 608.97 117.34 45.95 3,328.40 48.95 3.27 1.30 0.00 3.91 652.13 115.70 43.58 3,943.40 49.17 3.37 1.30 0.00 3.91 675.77 113.22 40.62 4,569.90
1.34 16.00 39.74 2.20 1.54 0.00 6.70 457.79 102.18 69.74 2.00 15.87
669.75 95.27 34.78
652.90 92.33 33.83
136
Department of Energy Officials
DEPARTMENT OF ENERGY OFFICIALS

Angelo T. Reyes Secretary Mariano S. Salazar Ramon G. Santos Roy V. Kyamko Ramon Allan V. Oca (OIC) Loreta G. Ayson (OIC) Undersecretaries Matanog M. Mapandi Leonilo B. Lariosa Annette M. Rafael Teresita M. Repizo Assistant Secretaries
Bureaus Dir. Lilian C. Fernandez (OIC) Energy Policy and Planning Bureau Dir. Mylene C. Capongcol Asst. Dir. Irma C. Exconde Electric Power Industry Management Bureau Dir. Mario M. Marasigan Asst. Dir. Evelyn N. Reyes (OIC) Energy Utilization Management Bureau Dir. Restituto G. Taganas, Jr. (OIC) Asst. Dir. Alicia N. Reyes (OIC) Energy Resource Development Bureau Dir. Antonio E. Labios Visayas Field Office Dir. Manuel M. Llaneza Mindanao Field Office
Services Dir. Criselda M. Funelas Legal Services Dir. Efren L. Balaoing (OIC) Administrative Services Dir. Araceli A.S. Soluta (OIC) Financial Services Dir. Romeo S. Aano (OIC) Information Technology and Management Services Dir. Raquel S. Huliganga Energy Research Testing and Laboratory Services
137
BCF BOPD ckt.-kms. CO2 GWh KTOE kW kWp MB MMB MMBFOE MMCFG MMMT MMSCF MMT MTOE MVA MW Php sq. kms. TCF TOE
Billion Cubic Feet Barrels of Oil Per Day Circuit Kilometers Carbon Dioxide Gigawatt-hours Thousand Tonnes of Oil Equivalent Kilowatt Kilowatt (peak) Thousand Barrels Million Barrels Million Barrels of Fuel Oil Equivalent Million Cubic Feet of Gas Million Metric Tons Million Standard Cubic Feet Thousand Metric Tons Million Tonnes of Oil Equivalent Megavolt Ampere Megawatt Philippine Peso Square Kilometers Trillion Cubic Feet Tonnes of Oil Equivalent
138
List of Units of Measurements
LIST OF UNITS OF MEASUREMENTS
List of Acronyms
LIST OF ACRONYMS
AAP ACD AFTA AHAM AMEM AMEM-SOME AMORE AMM ANGVA A.O. APAEC APEC-EMM APEC-EWG APG APSA ARC Batman 1 Batman 2 BCQ BIR BOI BOT BRECDA CAA CAI CAMPI CAPEX CBRED CCRU CCT CEPZA CFL CME CMM CMMI CNG CNOOC CNPLS COC CSEZ CWPO DA DBM DBP D.C. DENR Automobile Association of the Philippines Asian Cooperation Dialogue ASEAN Free Trade Area Agreement Association of Home Appliance Manufacturers ASEAN Ministers on Energy Meeting ASEAN Ministers on Energy Meeting Senior Officials Meeting on Energy Alliance for Mindanao Off-grid Renewable Energy Abandoned Mine Methane Asia Pacific Natural Gas Vehicle Association Administrative Order ASEAN Plan of Action on Energy Cooperation Asia Pacific Economic Cooperation Energy Ministers Meeting Asia Pacific Economic Cooperation Energy Working Group ASEAN Power Grid ASEAN Petroleum Security Agreement Agrarian Reform Community Batangas-Manila Gas Pipeline Bataan-Manila Gas Pipeline Bilateral Power Supply Contracts Quantities Bureau of Internal Revenue Board of Investment Build-Operate-Transfer Barangay Renewable Energy and Community Development Association Clean Air Act Certificate of Authority to Import Chamber of Automotive Manufacturers of the Philippines, Inc. Capital Expenditure Capacity Building to Remove Barriers to Renewable Energy Development Continuous Catalytic Reform Unit Clean Coal Technology Cavite Export Processing Zone Authority Compact Fluorescent Lamp Coco-Methyl Ester Coal Mine Methane Chase Makros Management, Inc. Compressed Natural Gas China National Offshore Oil Corporation Cebu-Negros-Panay-Leyte-Samar Coal Operating Contract Clark Special Economic Zone Consumer Welfare and Protection Office Department of Agriculture Department of Budget and Management Development Bank of the Philippines Department Circular Department of Environment and Natural Resources Development and Livelihood Fund Department of Energy
139
DLF DOE
DSM DTI DU EAS EC ECA ECC ECT ECTF EELS EF EIMP EMB E.O. EOR EPIRA ER ERC ESA ESCO ESI ESOM ET Loop FAME FFV GDP GEF GEMP GFA GFI GHG GK GSLFAP GVA IAEA IEC IEE IEF IOR IPP IRR JAMA JAPEX JDA JICA JMSU JODI KEPCO LFO LGU LOI LPG
140
List of Acronyms
DOF DOJ DOLE DOST DOT DOTC
Department of Finance Department of Justice Department of Labor and Employment Department of Science and Technology Department of Tourism Department of Transportation and Communications Demand-Side Management Department of Trade and Industry Distribution Utility East Asia Summit Electric Cooperative Energy Conversion Agreement Environmental Compliance Certificate The Energy Charter Treaty EAS-Energy Cooperation Task Force Energy-Efficient Lighting Systems Electrification Fund Energy Information Management Program Environmental Management Bureau Executive Order Enhanced Oil Recovery Electric Power Industry Reform Act Expanded Rural Electrification Energy Regulatory Commission Energy Sales Agreement Energy Service Company Energy Security Initiative Electricity Supply, Operation and Maintenance Metro Manila Gas Loop Fatty Acid Methyl Ester Flexi-Fuel Vehicle Gross Domestic Product Global Environment Facility Government Energy Management Program General Framework Agreement Government Financing Institution Greenhouse Gas Gawad Kalinga Gasoline Station Lending and Financial Assistance Program Gross Value Added International Atomic Energy Agency Information, Education and Communication Initial Environmental Examination International Energy Forum Improved Oil Recovery Independent Power Producer Implementing Rules and Regulations Japan Automobile Manufacturers Association Japan Petroleum Exploration Philippines, Ltd. Joint Development Agreement Japan International Cooperation Agency Joint Marine Seismic Undertaking Joint Oil Data Initiative Korean Electric Power Corporation Liquid Fuel Oil Local Government Unit Letter of Intent Liquefied Petroleum Gas
List of Acronyms
LRT LTFRB MAR MEPS METI MFI MIR MMDA MMS MOA MOPS MOST MOU MRT MSC NBB NCC NCR NEDA NEECP NGO NGVPPT NNPP NPC NPP NPSC NSCB NSO OEB OECD OEM OTEC PAGCOR PAMATEC PCA PCC PCRM P.D. PDM PDP PECR PELMATP PEMC PEP PETROVIETNAM PHESI PhilRice PIA PNCC PNOC-AFC PNOC-EDC PNRI PNS PRES PSALM
141
Light Railway Transit Land Transportation Franchising and Regulatory Bureau Maximum Allowable Revenue Minimum Energy Performance Standards Ministry of Energy, Trade and Industry Micro-finance Institutions Minimum Inventory Requirement Metropolitan Manila Development Authority Market Management System Memorandum of Agreement Mean of Platts Singapore Market Operations Scenario Tests Memorandum of Understanding Metro Rail Transit Market Service Center National Biofuels Board Negotiated Commercial Contract National Capital Region National Economic and Development Authority National Energy Efficiency and Conservation Program Non-government Organization Natural Gas Vehicle Program for Public Transport Northern Negros Power Plant National Power Corporation New Power Provider Nuclear Power Steering Committee National Statistical Coordination Board National Statistics Office Overall Energy Balance Organization for Economic Cooperation and Development Original Equipment Manufactured Ocean Thermal Energy Conservation Philippine Amusement and Gaming Corporation Paris-Manila Technology Corporation, Inc. Philippine Coconut Authority Pre-Commercial Contract Pricing and Cost Recovery Mechanism Presidential Decree Price Determination Methodology Power Development Plan Philippine Energy Contracting Round Philippine Efficient Lighting Market Transformation Project Philippine Electricity Market Corporation Philippine Energy Plan Vietnam Oil and Gas Corporation Philippine Hybrid Energy Systems, Inc. Philippine Rice Research Institute Philippine Information Agency Pre-Negotiated Commercial Contract PNOC-Alternative Fuels Corporation Philippine National Oil Company-Energy Development Corporation Philippine Nuclear Research institute Philippine National Standard Philippine Rural Electrification Service Power Sector Assets and Liabilities Management
PSC PSPC PTFCC PUV QTP R.A. REPF RPP RWMHEEF SAARC SC SCA SDA SEC SISID SPOTS SRA SSMP STF SURE RAB ROMM TAGP TCPPA TDP TFEC TPES TransCo TWRG UC USAID USDOE USGS WB-GEF WESM WTI
Corporation Production-Sharing Contract Pilipinas Shell Petroleum Corporation Presidential Task Force on Climate Change Public Utility Vehicle Qualified Third Party Republic Act Renewable Energy Policy Framework Rural Power Project Reforestation, Watershed Management, Health, and/or Environment Enhancement Fund South Asian Association for Regional Cooperation Service Contract Settlement and Clarification Agreement Self-Drive Away Securities and Exchange Commission Small Island Submarine Interconnection Development Solar Power Technology Support Sugar Regulatory Administration Sustainable Solar Market Package Special Trust Fund Solution Using Renewable Energy Regulatory Asset Base Rehabilitation, Operation, Maintenance and Management Trans-ASEAN Gas Pipeline Technical Committee on Petroleum Products and Additives Transmission Development Plan Total Final Energy Consumption Total Primary Energy Supply National Transmission Corporation Transmission Wheeling Rate Guidelines Universal Charge United States Agency for International Development United States Department of Energy United States Geological Services World Bank-Global Environment Facility Wholesale Electricity Spot Market West Texas Intermediate
142
List of Acronyms
Conversion Table
CONVERSION TABLE
Length 1 meter Area 1 square meter 1 square kilometer 1 hectare Volume 1 liter 0.0353147 cubic foot 0.264172 US gallon 0.001 cubic meter 0.219969 Imperial gallon 5.6146 cubic feet 0.158987 cubic meter 42 US gallons 34.9726 Imperial gallons 10.7639 square feet 0.386102 square mile 100 hectares 10,000 square meters 2.47105 acres 39.3701 inches Crude Oil Aviation gasoline Motor gasoline Kerosene Gas Oil Diesel Oil Lubricating Oil Fuel Oil Asphaltic bitumen Product specific gravity ranges Specific Gravity 0.80-0.97 0.70-0.78 0.71-0.79 0.78-0.84 0.82-0.92 0.82-0.92 0.85-0.95 0.92-0.99 1.00-1.10 Barrels per tonne 8.0-6.6 9.1-8.2 9.0-8.1 8.2-7.1 7.8-6.9 7.8-6.9 7.5-6.7 6.9-6.5 6.4-5.8
Converting into Barrels of Fuel Oil Equivalent (BFOE) Energy Forms are converted into a common unit, BFOE, based on fuel oil equivalent at 18,600 BTU/lb as follows: Electricity Regular Gasoline Premium Kerosene Diesel Oil LPG Aviation Gas Fuel Oil Pitch PPC Coal (10,000 BTU/lb) Alcohol Bagasse (50% moisture) Coconut Oil 600 kwh 1 bbl 1 bbl 1 bbl 1 bbl 1 bbl 1 bbl 1 bbl 1 bbl 1 MT 1 bbl 1 MT 1 bbl 1.0000 0.8470 0.8624 0.8798 0.9328 0.6384 0.8478 1.0058 1.0197 3.3500 0.5561 1.4400 1.0000
1 US barrel
Mass 1 kilogram 2.20462 pounds 0.907185 tonne 0.892857 long tone 1,000 kilograms 2,204.62 pounds 0.984207 long tone 1.10231 short tons 2,240 pounds 1.12 short tons 1.101605 tonnes
1 tonne (metric)
1 long ton (Imperial)
Approximate heat energy content of fuels Crude oil Gasoline Kerosene Benzole Ethanol Gas oil Fuel oil (bunker) Coal (bituminous) LNG (natural gas) Crude oil BFOE Coal Electricity BTU/lb 18,300-19,500 20500 19800 18100 11600 19200 18300 10200-14600 22300 MJ/kg 42-45.2 47.7 46.1 42.1 27.0 44.7 42.6 23-734.0 51.9
Energy and Power 1 international table (IT) 1 calorie 4.1868 joules 1 kilocalorie=(IT) 1.163 watt hours 1 kilowatt hour 3,412.14 BTUs 895.845 kilocalories (IT) 3.6 megajoules 1.34102 horse powerhours 1 metric horsepower 735.499 watts 542.476 foot pounds force/second 0.98632 Imperial horsepower 737.562 foot pounds force/second 1.35962 metric horsepower
0.1344 TOE/bbl 0.1444 TOE/bbl 0.488 TOE/MT 0.086 TOE/MWh
1 kilowatt
143
We, at the Department of Energy together with our attached agencies: the Philippine National Oil Company (PNOC) and its subsidiaries, National Power Corporation (NPC), National Electrification Administration (NEA), Power Sector Assets and :Liabilities Management (PSALM) Corporation, National Transmission Corporation (TransCo) and the Wholesale Electricity Spot Market (WESM) through the Philippine Electricity Market Corporation (PEMC) gratefully acknowledge the various contributions from our partners in government and the private sector who collaborated with us in coming up with the 2007 Philippine Energy Plan Update. This Plan Update would not have been possible without the valuable inputs and support of our co-workers, and respected stakeholders from the energy circle as well as other concerned organizations. We wish to particularly thank the National Economic and Development Authority, Bangko Sentral ng Pilipinas (BSP), National Statistics Office and the National Statistical Coordination Board (NSCB) for providing us the socio-economic planning parameters used in coming up with the energy demand forecasts. We also acknowledge with appreciation the continuing support of the United States Agency for International Development-Energy and Clean Air Project and its academic network for providing us with the technical assistance in the conduct of the regional energy consultations in four key cities of the country, namely: the cities of Bacolod, General Santos, Laoag and Batangas. Similarly, we wish to thank the local government units of these respective cities for their significant contributions rendered during the consultations.
144
Acknowledgements
ACKNOWLEDGEMENTS
DEPARTMENT OF ENERGY Republic of the Philippines Energy Complex, Meritt Road Fort Bonifacio, Taguig City (632) 4792900 www.doe.gov.ph

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PHILIPPINE ENERGY PLAN

ABOUT THE COVER

PHILIPPINE ENERGY PLAN

PEP 2007 - 2014

4 9 13 23 28 33 40 44 48 50 53 56 59 61 62 65 78 123 137 138 139 143 144

ANGELO T. REYES Secretary

PEP 2007 - 2014 ii

MESSAGE FROM THE SECRETARY

PEP 2007 - 2014

LIST OF TABLES AND FIGURES

PEP 2007 - 2014 iv

LIST OF TABLES AND FIGURES

The Update takes stock of the energy sectors accomplishments

II. Energy Supply and Demand

3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0

1.00 0.50 0.00 -0.50 -1.00

Energy Supply and Demand 4

Energy Supply and Demand

Per Capita Consumption

0.40 0.30 0.20 0.10 0.00

PRIMARY ENERGY SUPPLY

Less export, bunkering and (+/-) stock change

FINAL ENERGY CONSUMPTION

Coal 27.0% Total Generation: 56,568 GWh Natural Gas 28.8%

Solar and Wind Oil-Based 0.1% 8.2%

Coal 26.9% Total Generation: 56,784 GWh

Geothermal 18.4% 2006

Oil Supply/Demand Report FY 2006

Energy Supply and Demand 6

Energy Supply and Demand

Figure 7. FINAL ENERGY DEMAND BY SECTOR

Figure 8. ENERGY CONSUMPTION OF THE TRANSPORT SECTOR BY SUB-SECTOR, 2006

Residential 28.4% 2006 Total Demand: 22.5 MTOE

Charcoal 8.5% Fuelwood 50.6% Agriwaste 5.1%

Fuel Oil 18.4%

Biomass 23.3% Total Consumption: 5.39 MTOE

Natural Gas 1.0%

Energy Supply and Demand 8

Energy Supply and Demand

Indigenous Energy Supply

Petroleum Products 85.4%

Diesel 77.1% Fuel Oil 6.0% Gasoline 0.6%

Total Consumption: 0.28 MTOE

Imported Oil 31.8%

Total Supply: 43.5 MTOE

Imported Oil 29.6%

Total Supply: 48.1 MTOE

Imported Energy Supply

Imported Oil 32.9%

Total Supply: 54.5 MTOE

FINAL ENERGY DEMAND

Energy Supply and Demand 10

Energy Supply and Demand

Energy Demand by Sector

SWMh Natural Gas

2012 2013 2014 Electricity

Energy Supply and Demand 12

III. Energy Independence

Exploration and Production