WHAT IS THE CURRENT SITUATION?
- DOE Energy Mix
Coal remains to be the primary energy source for electricity generation, account to 50% of the electricity generation mix. Coal-fired powerplants remain the most stable and cheapest baseload.
Renewable energy
However, we recognize the impact of coal-fired and diesel-fired power plants on our environment. Thus, we continue to promote and support the development of renewable energy sources to supply our electricity requirements, Renewable energy, e.g, geothermal, hydro, solar, wind and biomass, accounted for 24 percent of electricity generation.
We continue to line up power projects nationwide to ensure adequate energy supply in the country, To date, there are 92 power projects in Luzon, Visayas and Mindanao, with a total installed capacity of 8.618 MW targeted to start commercial operation from 2018 to 2025. This is enough to meet the expected increase in the peak demand of 7,995 MW by 2025.
Empowering Energy Consumers
To empower our consumers to use energy wisely and protect them from disasters and other adverse situations, we have undertaken the following:
- Adopted an Energy Resiliency Policy to strengthen the capacity, promote disaster preparedness, and improve response mechanisms of the energy sector.
It provides strategic interventions such as the strengthening of existing energy infrastructure facilities, improvement of operational and maintenance practices, restoration of damaged infrastructures, and the development of resiliency standards for the construction of future energy facilities.
- Promulgated revised rules and regulations governing the business of retailing liquid fuels to address the safety and quality concerns. We introduced the Technology-Solutions Retail Outlet that uses emerging technologies and materials manufactured in the accordance with the standards of product safety certifying bodies such as the United Laboratories, other equivalent Nationally Recognized Testing Laboratories and the Conformìté Europèene (CE).
- Managed the impact of the TRAIN Law implementation. We implemented initiatives mitigate the adverse impact of the Tax Reform Law, as follows:
Retention of Exempt Status for Certain Vehicles
Before the implementation of the TRAIN Law, buses, trucks, cargo vans, jeepneys/jeepney substitutes, single cab chassis, special purpose vehicles, and automobiles used exclusively within the Freeport zone were exempt from the excise tax. The TRAIN Law retained the exempt status of these vehicles and included purely electric vehicles and pickup trucks in the list of exempted automobiles. The TRAIN Law also introduced a reduced excise tax rate or a 50% discount for hybrid vehicles.
Provision of Timely Advisories
We provided timely advisories and undertook monitoring, random inspections, data gathering, review of inventory levels, and issuance of show-cause orders to retailers who raised prices before Jan, 15, 2018. These regulating activities helped save consumers around P2.64 billion for gasoline, diesel and kerosene and P58.4 million for LPG. We also directed all distribution utilities to require their power suppliers to explain any additional charges that may arise as a result of the TRAIN Law’s implementation.
Provision of Fuel Discounts and Subsides
A Memorandum of Agreement among the DOE, Petron, Shell and Phoenix was signed in March 2018 to provide fuel discounts of P1.00/liter on liquid fuels, among, others, to PUV drivers. This will help avert transport fare increases.
We have started distributing “Pantawid Pasada” Cards to legitimate Public Utility Jeepney (PUJ) franchise holders in July 2018. Beneficiaries received their cards containing P5,000 as fuel subsidy.
- How many Filipinos Don’t Have Access to Electricity?
About 16 million people in the Philippines still do not have access to electricity, forming part of the 130 million in Southeast Asia who still do not have access to electricity.
This is according to the government think-tank Philippine Institute for Development Studies (PIDS) in a study by Adoracion Navarro, a senior research fellow of the Institute, Maxensius Tri Sambodo of Indonesian Institute of Sciences Economic Research Center, and Jessie Todoc, Philippines Country Manager of Southeast Asia Energy Access and Alternative Energy, International Copper Association Southeast Asia.
In the Philippines, 16 million of the population are without electricity, PIDS said.
And the problem persists in neighboring countries as well. In Indonesia, for instance, 63 million of its population is still without electricity and in Myanmar, 26 million, the think-tank said.
In Cambodia the number is 10 million and in Thailand, eight million. Vietnam, meanwhile, has two million people who have no access to electricity, almost the same as Laos 2.2 million. In Malaysia, the number is only 200,000.
In the region, only Singapore and Brunei Darussalam have 100-percent electrification rate, PIDS said.
At the current situation, about 63 million of the ASEAN population of 600 million is expected to still have no electricity in 2030, PIDS said in its study, citing projections from the International Energy Agency (IEA).
Lack of electricity access is much greater in rural areas than in urban areas. Improving the rural electrification ratio is a major challenge both at the national and regional levels considering the level of electricity access among the 10 ASEAN members, PIDS said.
In the Philippines, PIDS noted that the country has a total electrification rate of 83 percent. Its urban electrification rate is 94 percent, which is 21 notches higher than its 73-percent rural electrification rate.
Nevertheless, about half or 47 million people rely on traditional biomass for cooking, PIDS said.
The authors recommend linking the benefits from and strategies in ASEAN Energy Market Integration (AEMI) with the eradication of energy poverty in Southeast Asia.
In particular, the investment requirements and financing options should consider the needs of the energy-poor. Energy market integration in the region should also contribute to the respective members national economic growth and development, where lack of access to modern energy services is one of the constraints. To achieve universal access to electricity by 2030, the ASEAN would need to invest about $48 million, PIDS said.
Options to improve access to electricity include on-grid connection extensions, mini-grid distribution systems and off-grid electrification that can be financed by government budget, multilateral and bilateral official development assistance, and the private sector.
The government think-tank attributed the slow growth of electricity in the region to the 1997 Asian financial crisis.
- How much is the electricity rate in the Philippines vs. other Asian countries?
- Impact of current situation
THE ENERGY SITUATION IN THE PHILIPPINES
The Philippines is an emerging economy whose vibrant business arena lends itself to the use of conventional fossil fuels as the main source to meet its primary energy demands.
THE ENERGY MIX
Based on the 2016 total energy consumption index of the Philippines, 47.9% of the country’s energy consumption was met by oil, 8.3% by coal, 0.2% natural gas, 22.4% by biomass[1], and the rest is met by renewable energy sources like wind, solar, and biofuel.
Regarding electricity generation, 12.19% of the Philippines’ electricity demand is met by geothermal energy, while 47.7% is met by coal, 8.93% by hydro, 21.9% by natural gas and 0.1% [2]by wind, solar and biofuel. While in terms of installed capacity for power generation, hydro is 63.2%, 35.1% is geothermal, 1.1% is biomass, and 0.6% by wind and 0.1% solar. [3]
The Philippines’ current energy mix leans heavily towards fossil fuels, with coal, natural gas, and oil, accounting for about 75% [4]of the country’s total electrical energy needs, primarily due to their low cost. Of these, the country’s most heavily used energy source is coal accounting to 49.6%.[5]
NATURAL GAS
The country is also heavily dependent on natural gas, producing 18,791 GWh of electricity from natural gas in 2013. This corresponded to 24.97% of the Philippines’ electrical energy needs during this period[6]. In the Philippines, there are only five known natural gas power plants: Santa Rita, Avion, San Gabriel, San Lorenzo, and Ilijan power plants. All of which are located in Batangas. [7]
The Malampaya Deep Water Gas-to-Power project is the country’s main source of natural gas. Since it began commercial operations in 2001, the Malampaya project has produced cleaner-burning natural gas which supplies five power plants in Luzon, the country’s largest island, with a combined capacity of 3,200 megawatts[8].
OIL
The Philippines also generates a significant amount of electrical energy from oil, albeit to a lesser degree than compared to coal and natural gas. As of March 2016, there were a total of 212 gas and diesel-powered facilities in the Philippines. The large number of oil-powered power plants is a result of a lower per plant output compared to coal and natural gas.[9]
Oil-powered power plants can be found dispersed across several provinces in Luzon, Visayas, and Mindanao.
INCREASING DEMAND AND POWER SUPPLY DEFICIENCY
In the global setting, economic growth and population increase have contributed heavily to the growing demand in energy.
In Southeast Asia, although coal remains in abundance in the region, it has met stiff social resistance. In turn, oil production is steadily declining. This decrease in oil production and the increase in demand have pushed the region to consequently increase its dependence on oil imports. And although gas production in the region remains stable, it still appears to lag behind regional demand for the long-term.
Here in the Philippines, the twin factors of economic and population growth have tolled heavily on the country’s energy resources. And with the continuing depletion of the country’s natural resources, there is already an urgent need to create alternative energy sources.
The fact is that the country’s energy situation is starting to get alarming. In April 2019, the Luzon grid was placed on red alert due to severe power supply deficiency. At the time, the National Grid Corporation of the Philippines (NGCP)–a privately-owned corporation in charge of operating, maintaining, and developing the country’s state-owned power grid–said that available capacity was only at 10,830 megawatts (MW) while peak demand was estimated to reach 10,371 MW.[10]
Rotational brownouts were then implemented in various parts of Luzon, including Metro Manila, which lasted for a few months.
Experts say that the disruptions in the Luzon grid were a precursor to a more serious power supply shortage in the coming years unless immediate action is done to enhance the country’s power-generation capability.
To meet the increasing power demands of the Philippines, the government needs to find more sources of energy, be it through an expansion of current renewable sources–such as sunlight, wind, rain, tides, waves, and geothermal heat–or through the tapping of indigenous and clean energy sources like natural gas.
THE ROAD TO ENERGY INDEPENDENCE
The fact remains that there is a continuing lack of public and private initiatives to explore and develop untapped natural resources in strategic locations in the country.
Energy security–the uninterrupted availability of energy sources at an affordable price–should therefore be a priority issue in every policy discussion in pursuit of national development. It is also imperative that energy planning is integrated into other areas that drive economic growth.
The bigger picture shows that there is a clear and urgent need to encourage more investments in energy infrastructure from the private sector as well as from global financiers. This, however, depends largely on their perception of the risks involved in dealing with government agencies, as well as the set of incentives that the government is willing to provide.
As such, the first crucial step is to initiate a public discourse on what must be done to move government decision-makers to create ways to beef up our energy reserves. This can be done through a Philippine Energy Independence Council that can trigger discussions that can lead to concrete steps towards our ultimate goal of energy independence.
[1] https://unstats.un.org/unsd/energy/meetings/2017a/4.3dep.pdf
[2] https://unstats.un.org/unsd/energy/meetings/2017a/4.3dep.pdf
[3] https://www.coursehero.com/file/18958767/Philippines/
[4] https://www.rappler.com/brandrap/finance-and-industries/what-is-next-natural-gas-philippines
[5] https://www.rappler.com/brandrap/finance-and-industries/what-is-next-natural-gas-philippines
[6] https://www.doe.gov.ph/sites/default/files/pdf/electric_power/power_situationer/2014_power_situationer.pdf
[7] https://www.rappler.com/brandrap/finance-and-industries/what-is-next-natural-gas-philippines
[8] https://malampaya.com/about/
[9] https://web.archive.org/web/20160610233915/http://www.doe.gov.ph/doe_files/pdf/01_energy_Situationer/2015_existing_power_plants_visayas_december_2015.pdf
[10] https://www.philstar.com/nation/2019/04/30/1913664/power-supply-deficiency-expected-until-june