ENERGY PROSPECTS

FOR THE PHILIPPINES

ZENAIDA Y. MONSADA Secretary, Department of Energy

EPDP Conference 2016: Toward Inclusive and Sustainable Energy Development

13 January 2016

New World Hotel, Makati City

ENERGY DEPARTMENT OF

Talking Points

Energy Profile Policy Initiatives

Investment Opportunities

Development Challenges

ENERGY

PROFILE

Total Primary Energy Mix

Post CAA of 1999

Oil 30.6%

Natural Gas 6.4% Coal

22.3% Hydro 5.6%

Geothermal 18.4%

Biomass 16.3%

Wind 0.0%

Solar 0.0%

Biofuels 0.5%

Oil 31.3%

Natural Gas 6.4% Coal

22.4% Hydro 4.8%

Geothermal 18.7%

Biomass 15.6%

Wind 0.0%

Solar 0.0%

Biofuels 0.8%

2013 2014

Total Energy: 44.9 MTOE

Self-sufficiency: 56.9%

RE: 40.7%

RE + NG: 47.2%

Total Energy: 47.5 MTOE

Self-sufficiency: 56.1%

RE: 39.9%

RE + NG: 46.3%

Coal

11.3%

Oil Based

37.9%

Geothermal

5.3%

Hydro

45.0%

Solar

0.0%

Biomass

0.5%

Dependable Capacity = 15,878 MW RE Share = 31.33%

Dependable Capacity = 11,868 MW

RE Share = 25.3%

Source: DOE List of Existing Power Plant, June 2015

Coal

38.0%

Oil Based

13.4%

Natural Gas

23.2%

Geothermal

5.8%

Hydro

18.1%

Wind

0.9%

Biomass

0.2% Solar

0.3%

Dependable Capacity = 2,150 MW

RE Share = 47.7%

Dependable Capacity = 1,860 MW

RE Share = 50.8%

2015 Dependable Capacity Mix

LUZON VISAYAS MINDANAO

Coal

29.3%

Oil Based

22.9%

Geothermal

38.0%

Hydro

0.5%

Biomass

3.3%

Natural Gas

0.0% Solar

1.9%

Wind

4.0%

Total Generation = 28,033 GWh RE Share = 13.5%

Source: submitted Monthly Operations Report

NGCP Daily Operations Report

Total Generation = 5,336 GWh RE Share = 55.1%

Total Generation = 4,837 GWh RE Share = 51.4%

Total Generation = 38,206 GWh RE Share = 24.1%

LUZON VISAYAS MINDANAO

Coal

16.9%

Oil-based

31.8%

Natural Gas

0.0%

Geothermal 8.8%

Hydro

42.2%

Wind

0.0%

Biomass

0.3%

Solar

0.0%

Power Generation Mix

January to June 2015

Coal

51.9%

Oil-based

2.2%

Natural Gas

32.5%

Geothermal

7.3% Hydro 5.2%

Wind

0.7% Biomass

0.2%

Solar

0.1%

Coal

38.9%

Oil-based 6.0%

Natural Gas 0.0%

Geothermal

52.5%

Hydro

0.3%

Wind

1.2%

LFG

0.0% Biomass

0.7%

Solar

0.4%

Power Generation Mix

Philippines vs. ASEAN Member States

ASEAN-6 Power Generation Mix, as of 2013

Source: DOE, EGAT, Ministry of Energy and Mineral Resources (Indonesia), Economic Planning Unit (EPU-Malaysia) ERAV and EMA * Include Import

Other RE

Fossil Fuels Production

No. of Contracts

Monitored 2013 2014 1st Half 2015

Oil (in MMB) 1.88 3.07 1.21

29 SCs Gas (in BCF) 124.00 130.32 53.38

Condensate

(in MMB) 4.08 4.12 1.69

Coal

(in MMMT

@10,000 BTU/lb)

7.84 7.58 4.5 78 COCs

MMB – Million Barrels

BCF – Billion Cubic Feet

MMMT – Million Metric Tons

Indigenous Energy Production

Fossil Fuels

Renewable

Energy

Capacity (in Megawatts) as of 1st Semester 2015

No. of

RESCs/

Projects

Monitored

Development

Operational Pre-

Development

Pre-

Construction

On-going

Construction Total

Biomass NA - 357.0 357.0 191.8 45

Geothermal 700.0 50.0 - 750.0 1,906.0 42

Solar 1,865.5 95.1 245.9 2,206.5 108.9 93

Hydropower 1,274.0 352.3 224.3 1,850.6 136.7 407

Ocean 31.0 - - 31.0 - 8

Wind 821.0 347.0 - 1,168.0 426.9 50

TOTAL 4,691.5 1,671.6 6,363.1 2,770.3 645

Indigenous Energy Production

Renewable Energy

Renewable

Energy

Capacity (in Million Liters) No. of

Projects

Monitored

as of 1st

Sem 2015

As of 2014 As of 1st Semester 2015

Construction* Operational Production Sales Construction* Operational Production Sales

Biodiesel - 584.9 171.6 163.5 - 584.9 102.5 103.0 11

Bioethanol 83.0 222.1 115.1 118.9 83.0 222.1 90.5 86.3 10

TOTAL 83.0 807.0 286.7 282.4 83.0 807.0 193.0 189.3 21

* With Certificate of Registration of Notice to Proceed Construction

54 ML Green Future Innovation Inc., Bioethanol Plant

(San Mariano, Isabela)

90 ML Chemrez Technologies Inc., Biodiesel Plant

(Bagumbayan, Quezon City)

Indigenous Energy Production

Biofuels

Natural Gas

Production and Consumption

(in MMSCF)

1994-2013 2014 2015 (Jan. - Sept.) Total

Production1 1,410,142 130,351 53,250 1,593,744

Consumption 2 1,354,214 125,611 51,642 1,531,466

Power3 1,330,580 122,305 50,732 1,503,617

Industrial 23,453 3,302 909 27,664

Transport 180 4 0 184

1 Data from 1994-2008 include production from San Antonio gas field. Libertad gas field started its commercial

production at 1400 hrs, 03 February 2012. (Source: Production-DOE Petroleum Resources Development Division).

2 Submission from gas users.

3 Commercial operations for Ilijan/SR/SL using natural gas as the primary fuel commenced in 2002. The power plants

partly operated on liquid fuel (gasoil, naphtha, and condensate) for start-up operations until the end of 2001.

Production and consumption data for 2001 may not reconcile accurately due to rounding off.

MMSCF – Million Standard Cubic Feet

Indigenous Energy Production

Natural Gas

geothermal

biomass

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Energy Intensity Oil Intensity

TOE/PhP M BBL/P100k

Energy and Oil Intensity

2000-2014

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Electricity Intensity Electricity Per Capita

Wh/PhP MWh/Person

biomass

Electricity Intensity and Per Capita

2000-2014

Power 45.58%

Industry 12.82%

Transport 17.57%

Residential 17.14%

Commercial 6.17%

AFF 0.72% 2013

Power 45.86%

Industry 12.64%

Transport 17.68%

Residential 16.55%

Commercial 6.58%

AFF 0.69% 2014

Sector 2013 2014

kTOE % Shares kTOE % Shares

Power Generation 22,438.59 45.58% 23,688.42 45.86%

Industry 6,313 12.82% 6,528 12.64%

Transport 8,650 17.57% 9,133 17.68%

Residential 8,440 17.14% 8,550 16.55%

Commercial 3,038 6.17% 3,397 6.58%

AFF 352 0.72% 354 0.69%

Total 49,232 100.00% 51,651 100.00%

Total Energy Consumption by Sector

Electrification

Household Electrification as of 30 September 2015

Year Total HH Actual HH

Energized

Households

Served

%

Electrification

2012 21,027,524 967,075 17,611,023 83.7

2013 21,411,442 864,304 18,475,327 86.2

2014 21,915,309 791,757 19,267,084 87.9

2015 22,310,084 551,760 19,818,844 88.8

POLICY

INITIATIVES

Power and Renewable Energy

• Must Dispatch and Priority Dispatch of Renewable Energy Resources

in the WESM

• Mandating All DUs to Undergo Competitive Selection Process (CSP)

in Securing Power Supply Agreements (PSA)

• Full Implementation of Retail Competition and Open Access (RCOA)

• Maintaining the Share of RE Resources in the Country's Installed

Capacity at 30%

• Further Enhancement of the WESM Design and Operations

• Commercial Operation of the Central Scheduling and Dispatch of

Energy and Contracted Reserves in the WESM

• Adoption of WESM Offer Price Cap and Floor Cap

Major Policies Issued

Downstream Oil

• Corresponding Philippine National Standard Specifications (PNS) for

the Euro 4/IV-PH Fuels Complying with the Euro 4/IV Emissions

Standard

• Amending DC No. 2011-02-0001 Entitled "Mandatory Use of Biofuel

Blend“

• Revised Guidelines on the Utilization of Locally-Produced Bioethanol

in the Production of E-Gasoline

• Implementing the Philippine National Standard Specification for

Anhydrous Bioethanol Fuel

Major Policies Issued

Web-based monitoring system to facilitate approval process of

applications in the energy sector and contains a database of

processes, existing forms, fees, project related information and

permits issued

Energy Virtual One Shared System (EVOSS)

INVESTMENT

OPPORTUNITIES

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

CapAdd-Peaking 0 0 0 0 0 0 0 0 100 250 400 400 550 600 750 900

CapAdd-Mid Range 0 0 0 0 0 0 0 200 600 1,000 1,500 2,000 2,300 2,500 2,600 2,600

CapAdd-Baseload 0 0 0 0 0 0 0 0 0 0 0 0 135 540 945 1,485

Committed Capacity 502 933 1,395 1,395 1,785 1,762 1,762 1,762 1,762 1,762 1,762 1,762 1,762 1,762 1,762 1,762

Existing Dependable Capacity 11,868 11,780 11,780 11,736 11,736 11,679 11,679 11,621 11,621 11,567 11,567 11,512 11,512 11,464 11,464 11,415

Req'd Reserve 1,653 1,668 1,682 1,697 1,713 1,729 1,747 1,765 1,784 1,804 1,825 1,846 1,868 1,891 1,916 1,941

System Demand 8,974 9,345 9,703 10,081 10,466 10,884 11,317 11,772 12,250 12,753 13,267 13,802 14,358 14,937 15,539 16,165

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

Cap

acit

y (M

W)

SUPPLY-DEMAND OUTLOOK (LUZON)

DDP-based Scenario Supply-Demand Outlook 2015-2030

LUZON GRID WILL NEED 4,985 MW CAPACITY ADDITION BY 2030

2016 Feb: 30 MW Macabud Solar Apr: 6.1 MW AseaGas Biogas Jun: 450 MW San Gabriel NG Jul: 0.75 MW ACNPC WTE Bio Ph2 Aug: 150 MW Limay Coal U1

2017 Jan: 150 MW Limay Coal U2 Jul: 10.8 MW SCJIPower Bio P2 Nov: 420 MW Pagbilao 3

2019 Feb: 60 MW Kapangan HEPP Mar: 1 MW Bulanao HEPP Jun: 460 MW SBPL** Sep: 1 MW Prismc HEPP

2020 Feb: 1.4 MW Magat A MHEPP 1 MW Magat B MHEPP Mar: 1.5 MW Tubao MHEPP

2015 Sep: 18 MW IBEC Bio* 82 MW Anda Coal* 150 MW SLPGC Coal U1* Oct: 100 MW Avion 150 MW SLPGC Coal U2* Nov: 135 MW SLTEC Puting Bato Coal U2* 10.8 MW GIFTC Bio 20 MW Currimao Solar Dec: 4.5 MW Bicol Biomass 0.75 MW ACNPC WTE Bio Ph1

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

CapAdd-Peaking 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

CapAdd-Mid Range 300 300 300 300 300 400 500 500 500 500 500 500 500 600 600 600

CapAdd-Baseload 0 0 0 0 0 0 0 82 82 164 246 328 410 492 574 656

Committed Capacity 20 250 271 277 277 273 273 273 273 269 269 269 269 269 269 265

Existing Dependable Capacity 2,069 2,054 2,054 2,046 2,046 2,037 2,037 2,028 2,028 2,019 2,019 2,011 2,011 2,003 2,033 1,995

Req'd Reserve 274 341 344 347 349 352 354 357 360 364 368 372 376 381 386 391

System Demand 1,712 1,780 1,849 1,914 1,979 2,042 2,112 2,185 2,260 2,338 2,441 2,548 2,660 2,776 2,898 3,025

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

Cap

acit

y (M

W)

SUPPLY-DEMAND OUTLOOK (VISAYAS)

DDP-based Scenario Supply-Demand Outlook 2015-2030

2015 Sep: 8 MW Villasiga HEP 14 MW Nabas Wind Phase 2 Oct: 5 MW Calumangan DPP U1 5 MW Calumangan DPP U2 17 MW URC Bagasse Cogen Phase 2 Nov: 5 MW Calumangan DPP U3 3 MW VMCI Bio 18 MW La Carlota Solar Power Project Phase A

2016 Mar: 132.5 MW Cadiz Solar Power Project Jun: 135 MW Concepcion Coal 1 Sep: 10 MW Biliran GPP U1 Oct: 10 MW Biliran GPP U2 Nov: 135 MW Concepcion Coal 2

2015 Dec: 3.9 MW Calumangan DPP U4

2019 Dec: 0.8 MW Amlan HEPP

2018 Jan: 5.1 MW Igbulo HEPP Jun: 8 MW Cantakoy HEPP

2017 Jul: 15 MW Biliran GPP U3 Nov: 15 MW Biliran GPP U4

VISAYAS GRID WILL NEED 1,256 MW CAPACITY ADDITION BY 2030

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

CapAdd-Peaking 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

CapAdd-Mid Range 200 200 200 200 200 200 200 200 200 200 200 300 400 600 700 700

CapAdd-Baseload 0 0 0 0 0 0 0 0 0 0 0 0 0 0 105 210

Committed Capacity 84 862 995 1,445 1,464 1,445 1,445 1,445 1,445 1,445 1,426 1,426 1,426 1,426 1,426 1,466

Existing Dependable Capacity 2,003 1,991 1,991 1,985 1,985 1,975 1,975 1,965 1,965 1,955 1,955 1,945 1,945 1,936 1,936 1,926

Req'd Reserve 318 325 330 335 340 344 348 352 356 360 366 373 379 387 395 403

System Demand 1,566 1,742 1,877 2,008 2,131 2,233 2,325 2,421 2,520 2,623 2,777 2,939 3,112 3,294 3,488 3,693

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

Cap

acit

y (M

W)

SUPPLY-DEMAND OUTLOOK (MINDANAO)

DDP-based Scenario Supply-Demand Outlook 2015-2030

MINDANAO GRID WILL NEED 910 MW CAPACITY ADDITION BY 2030 2015

Sep: 1.6 MW PTCI Biomass Nov: 100 MW SEC Coal 1 Dec: 2.6 MW GEEC Biomass Cogen 11.9 MW SPC Koronadal DPP

2018 Mar: 4x135 MW GNPower Coal 1, 2, 3, 4 Jul: 30 MW Puyo HEPP

2017 Jan: 55 MW Minergy Coal 1 2.4 MW New Bataan HEPP Mar: 55 MW Minergy Coal 2 May: 55 MW Minergy Coal 3

2019 Aug: 8 MW Asiga HEPP Oct: 43.4 Manolo Fortich 1 HEPP 25.4 Manolo Fortich 2 HEPP

2016 Feb: 150 MW Therma South Coal 2 10 MW LPC Biomass Mar: 150 MW SMC Davao Coal U1 25 MW Lake Mainit HEPP Jun: 150 MW SMC Davao Coal U2 135 MW FDC Coal U1 Sep: 135 MW FDC Coal U2 Nov: 100 MW SEC Coal 2 Dec: 135 MW FDC Coal U3

Philippines:

• 16 Sedimentary basins

representing an

area of over 700,000

sq. km.

• Combined potential of

4,777 MMBFOE

• 29 Active Petroleum

Service Contracts

• Philippine Energy

Contracting Round

(PECR)

Oil and Gas Areas of Opportunities

SAMAR Resource Potential - 27.00 In-situ Reserves - 8.59

SURIGAO Resource Potential - 209.00

In-situ Reserves - 69.55

DAVAO Resource Potential - 100.00

In-situ Reserves - 0.21

SARANGANI Resource Potential - 120.00

MASBATE Resource Potential - 2.50 In-situ Reserves - 0.08

MINDORO Resource Potential - 100.00

In-situ Reserves - 1.44

SEMIRARA Resource Potential - 570.00

In-situ Reserves - 112.32

NEGROS Resource Potential - 4.50 In-situ Reserves - 2.01

BUKIDNON Resource Potential - 50.00

ZAMBOANGA Resource Potential - 45.00 In-situ Reserves - 37.99

MAGUINDANAO Resource Potential - 108.00

SULTAN KUDARAT Resource Potential - 300.30

SOUTH COTABATO Resource Potential - 230.40 In-situ Reserves - 81.07

CEBU Resource Potential - 165.00

In-situ Reserves - 11.63

BATAN-POLILLO- CATANDUANES

Resource Potential - 17.00 In-situ Reserves - 6.02

QUEZON Resource Potential - 2.00 In-situ Reserves - 0.09

CAGAYAN VALLEY Resource Potential - 336.00 In-situ Reserves - 82.57

Coal 76 COCs in 17 Reserve Areas

• Nominated by private companies

• Located in traditional coal mining

provinces in the following Coal

Regions in Mindanao:

a. Surigao Coal Region

b. Agusan-Davao Coal Region

c. Zamboanga Coal Region

d. Cotabato-Saranggani Coal

Region

Coal PECR5 Areas Offered

COCs Awarded from PECR 5 Offered Areas

Company COC No. Date Awarded Contract Area

CoalBlack Mining Corp.

(CMC)

193 December 29, 2014 Tandag & Tago, Surigao del Sur

Sahi Mining Corp. (SMC) 194 December 29, 2014 Sibagat, Agusan del Sur & Butuan

City, Agusan del Norte

Sahi Mining Corp. (SMC) 195 December 29, 2014 Sibagat, Agusan del Sur & Butuan

City, Agusan del Norte

Philsaga Mining Corp 196 December 29, 2014 Bunawan, Agusan del Sur

Philsaga Mining Corp 197 December 29, 2014 Bunawan & Trento, Agusan del Sur

Sahi Mining Corp. (SMC) 198 December 29, 2014 Godod, Zamboanga del Norte &

Kabasalan, Zamboanga Sibugay

Sahi Mining Corp. (SMC)

199 December 29, 2014 Godod, Zamboanga del Norte &

Kabasalan, Zamboanga Sibugay

Develop strategic

infrastructure for receiving,

storage, transmission and

distribution

Promote use of natural gas

beyond power

Serve as major alternative

fuel for industry, transport

and residential BATMAN 1

(Batangas Manila)

80-100 kms. (2015-17)

BATMAN 2

(Bataan - Manila)

140 kms. (2020)

BATCAVE

(Batangas – Cavite)

40 kms (2022)

SU-MA

(Sucat - Malaya)

35 kms. (2017)

ET LOOP

(EDSA – Taft Loop)

40 kms. (2020)

Natural Gas Infrastructure

BIODIESEL DEMAND

Year Diesel

Demand

Biodiesel Blends (Target)

Supply Requirement

(in million liters)

2016 7,176.41 5% 358.82

2020 7,923.37 10% 792.34

2025 8,693.73 20% 1,738.75

2030 9,030.68 20% 1,806.14

BIOETHANOL DEMAND

Year Gasoline Demand

Bioethanol Blends (Target)

Supply Requirement

(in million liters)

2015 3,818.61 10% 381.86

2020 4,328.87 20% 865.77

2025 4,712.28 20% 942.46

2030 5,084.05 20%/85% 1,016.81

Biofuels Requirement

Supply-Demand

DEVELOPMENT

CHALLENGES

• Diversify sources of fuel and technologies

• Conserve and manage current and future demand

• Promote physical security of energy facilities

Energy Supply Security and Demand Side Management

• Enhance energy and economy relationships to support inclusive economic growth

• Harmonize policies across economic sectors and at all levels of government

• Meet future demand for energy at reasonable rates

Economic Growth and

Development

• Promote and utilize the use of clean technology

• Put up climate-proof energy infrastructures

• Implement INDC commitment

Climate Change Mitigation and

Adaptation

• Integrate Renewable Energy sources

• Timely approval and implementation of infrastructure projects

Infrastructure Development

Development Challenges and

Actions Needed

Power Demand Outlook by Fuel – Electric Power in GWh

0

100

200

300

400

500

600

700

2001 2010 2020 2030 2040 2050

Actual Projection

TWh

BAU Scenario

New Tech

Other RE

Geothermal

Hydro

Coal

NGas

Oil0

100

200

300

400

500

600

700

2001 2010 2020 2030 2040 2050

Actual Projection

TWh

Fuel Mix Scenario

New Tech

Other RE

Geothermal

Hydro

Coal

NGas

Oil

A fuel mix policy could prevent increasing share of coal in total power generation

Development Challenges

• Fuel Mix Policy for power generation and demand sectors

Power Demand Outlook CO2 Emission in MTCO2

-

50

100

150

200

250

300

350

400

2001 2010 2020 2030 2040 2050

Actual Projection

Fuel Mix Scenario

Coal

NGas

Oil

-

50

100

150

200

250

300

350

400

2001 2010 2020 2030 2040 2050

Actual Projection

BAU Scenario

Coal

NGas

Oil

30%

Reduced emissions (e.g. CO2, PM, SOx, NOx) from power generation can help improve people’s health conditions and productivity

A fuel mix policy has the potential to reduce GHG emission from power generation

Development Challenges

Impacts of Current Low Oil Prices

Stimulates oil consumption in transport with increased GHG

emissions

– Need to accelerate additional capacity requirement for

biofuels

Makes alternative fuels and technology development

uneconomical

Makes RE less attractive and competitive

Slows down Indigenous Oil and Gas Development

Dampens energy efficiency and conservation efforts

Development Challenges

Pending Bills

• Liquefied Petroleum Gas

• Amendments to Biofuels Act of 2006

• National Land Use Act of the Philippines

• Energy Efficiency and Conservation

• Downstream Natural Gas Industry Development

• Alternative Fuel Vehicles

Proposed Bills

• Declare Energy Projects as Projects of National

Significance

Legislative Agenda

Good Governance thru stakeholder participation, transparency,

multi-sectoral partnership and use of ICT

Ensure

Energy Security

Achieve Optimal

Energy Pricing

Develop a

Sustainable

Energy System

“Energy Access for More” A key priority of government to mainstream access of

the greater majority to reliable energy services and

fuel; and help address local productivity and

countryside development

Transparency

Initiatives, Implementation and Information

Energy Reform Agenda

THANK YOU

Pease visit:

https://www.doe.gov.ph

EPDP Conference 2016: Toward Inclusive and Sustainable Energy Development

13 January 2016

New World Hotel, Makati City

ENERGY DEPARTMENT OF