Special Report: More secure energy sector, less power intensive economy seen

(Last of two parts)

While some have remained critical of the supposed “slow pace” of developments in the energy sector, a greater number of stakeholders have expressed optimism, noting that the Department of Energy is moving in the right direction.

Alfredo Ramos, chairman of the Petroleum Association of the Philippines, said participants in the upstream oil and gas industry were “keenly anticipating” the resurgence of upstream exploration and development given the expected significant developments in 2010.

“We look forward to the new leadership in the DOE to continue the momentum toward more petroleum exploration in the Philippines. As before, the Petroleum Association of the Philippines will continue to work with the government in pursuing the goal of energy security and independence through the search for, discovery and development of indigenous petroleum resources,” he added.

Accomplishments

Reynaldo P. Bantug, president and CEO of Japanese-backed ethanol producer Green Future Innovations Inc., added that under the present administration, “we have gone a long way.”

“We have some major accomplishments for 2012. We have actually settled a lot of issues as far as policies are concerned—we were able to come up with FIT rate … We think these are major milestones that boost the confidence of investors. We are happy that all these uncertainties have been addressed,” he said.

Fernando Martinez, chairman of independent player Eastern Petroleum and of Independent Philippine Petroleum Companies Association (Ippca), noted that the local downstream oil industry had moved a “step further to maturity.”

“Intensified competition benefited the consumers and proved the merits of a deregulated, open and transparent market. The downstream oil industry is the least of DOE’s concerns,” Martinez said.

Targets

Over the next few years, the DOE targets to implement several medium- and long-term measures to ensure the country’s energy security.

Recently, the DOE launched the Philippine Energy Plan 2012-2030, which indicated that at least P3 trillion in fresh investments will be needed by the energy sector between 2012 and 2030.

Petilla said the latest version of the PEP was anchored on the Energy Reform Agenda, which is focused on providing “energy access for more.”

Under the PEP, the energy sector will be guided by the following policy thrusts:

— Ensure energy security or the availability of energy supply at a reasonable price;

— Expand energy access focused on providing electrification to the countryside to usher economic growth;

— Promote low carbon future in response to global calls on mitigating the environment;

— Climate-proof the energy sector to ensure that energy facilities and infrastructures are resilient to climate change;

— Promote investments in the energy sector considering that nearly 90 percent of the funding requirements will come from the private sector; and

— Develop regional energy plans to complement regional development thrusts and objectives.

The DOE wants the country’s renewable energy-based power generation capacity to increase threefold with the addition of 9,931.3 MW by 2030.

The National Biofuels Board is expected to help the DOE achieve its biofuel blend targets over the planning horizon.

“Biofuels as we said will be used as blends. More than what the law requires, our aspiration is to reach 85 percent bioethanol blend in 2030,” Energy Secretary Carlos Jericho L. Petilla said.

Through the continued implementation of the Philippine Energy Contracting Rounds and monitoring of the performance of the service contractors vis-à-vis their development programs, the DOE sees a modest increase in the production of indigenous fuels.

The DOE is also enticing investors to invest in power generation facilities.

Generation capacity

“With the expected economic growth of the country to reach over 7 percent at the end of the planning horizon, we will need an additional capacity of 11,400 MW, based on our Power Development Plan,” Petilla said.

The DOE also aims to realize its “One Grid, One Nation” goal by interconnecting Mindanao and the Visayas. The grids of Luzon and Visayas are already interconnected.

As the energy sector’s contribution to the poverty reduction goal of the Aquino Administration, the DOE and National Electrification Administration vow to provide electricity to 32,441 sitios (settlements) from 2012 to 2015. This will bring sitio electrification level to 100 percent by 2015.

Likewise, between 2012 and 2017, about 6.1 million households will be energized to realize 90 percent household electrification by 2017.

As part of promoting a low carbon future, the DOE aims to achieve 10-percent energy savings by 2030. It also hopes to see 30 percent of all public utility vehicles running on alternative fuels by 2013.

Petilla committed that the DOE would ensure the smooth flow of energy investments by working closely with concerned agencies and institutions in harmonizing energy laws with other national laws.

Given these policy thrusts, the DOE is envisioning “a more secure energy sector, less energy-intensive economy, more efficient and sustainable energy systems and facilities, and reduced dependence on oil importation.”

“A more secure energy sector would mean the realization of our targeted increase in power generation capacities, an interconnected transmission system, a reliable distribution network through electric cooperatives and the timely implementation of downstream energy infrastructures particularly for natural gas,” Petilla explained.