1. State Policies and Energy Markets VINCENT S. PÉREZ Secretary Department of Energy REPUBLIC OF THE PHILIPPINES

2. OUTLINE State of the Philippine energy sector Government thrusts for energy development : Sustainability –Natural Gas –Development of New and Renewable Energy (NRE) Sources –Power Sector Reform –Cooperation and collaborative actions with ASEAN neighbors

3. STATE OF PHILIPPINE ENERGY SECTOR

4. PRIMARY ENERGY MIX Y2000 Total Energy: 249.5 MMBFOE Self-Sufficiency Level: 45%

5. PROJECTED ENERGY MIX Total Enegy: 297.35 MMBFOE Self-Sufficiency Level: 53% Y2004 Source: PEP 2002-2011 Indicative Scenario: High Indigenous

6. POWER GENERATION MIX Y2000 45,290 GWh

7. PROJECTED GENERATION MIX Y2002 51,600 GWh Self-sufficiency Level: 64%

8. PHILIPPINE ENERGY THRUSTS

9. ENERGY THRUSTS Stable, secure & efficient energy supply Fair & reasonable energy prices Consumer welfare enhancement Energy efficiency & conservation Environmental friendly energy sources

10. MALAMPAYA DEEP WATER GAS-TO-POWER PROJECT

11. Depth 0 45 m 850 m Wells Two 16” wet gas flowlines Offshore Platform 24” dry gas pipeline Batangas onshore gas processing plant Subsea mainfold 2,700 MW Power Plants MALAMPAYA DEEP WATER GAS-TO-POWER PROJECT

12. A 504-km subsea pipeline will bring Malampaya natural gas from offshore Palawan to Luzon SUBSEA PIPELINE

13. FINANCIAL IMPACT OF MALAMPAYA GAS PROJECT Govt Revenues (20 yrs) US$ 8.1 B Savings : –Forex US$4.5 B –Electricity2.2 B –Environmental1.1 B

14. This corridor is composed of more prospective areas near the Malampaya gas field THE CORRIDOR OF FOCUS

15. THE EMERGING NATURAL GAS INDUSTRY Malampaya Gas to Power Project Ilijan Sta Rita San Lorenzo Other Power Plants Ind’l. Plants Transp. Sector CNG/LNG Tankers Gas Receiving Plants Gas Wells Gas Plants Trans-ASEAN Gas Pipeline Bldgs. Distribution Cos. Traders / Marketers

16. Renewable Energy: GEOTHERMAL POWER DEVELOPMENT

17. PACIFIC RING OF FIRE

18. GEOTHERMAL POWER IN THE PHILIPPINES Installed capacity of 1,931 Mwe Leyte Geothermal Field - world’s largest geothermal plant for wet steam 2nd largest user of geothermal energy resources for power generation Potential of 730 MW from 11 explored prospect areas

19. 112.5 MW Tongonan I Power Plant 1 x 60 MW Mahanagdong B Geothermal Power Plant WITHIN THE LARGEST GEOTHERMAL FIELDS

20. NEW RENEWABLE ENERGY DEVELOPMENT Wind Energy Solar Energy Ocean Energy

21. WIND POWER POTENTIAL SITES Philippine wind energy potential could be as much as 70,000 MW, with high potential wind energy utilization in the following areas: Ilocos, Mt. Province, Cuyo Is., Batanes, Catanduanes, Tagaytay, Lubang and Cabra Is., W. Batangas, Guimaras, Masbate, NE Negros Occidental and Palawan

22. Located in Northern Philippines Project cost of US$ 54 Million Largest wind farm in Southeast Asia Installation of 56 units of 750 kW wind turbine generators 40 MW WIND FARM

23. Translating Goals to Strategies Large-scale utilization of NRE sources Promotion of energy efficiency and conservation Adoption of environment energy systems; and Establish synergy between energy development & environmental concerns INTEGRATED ENERGY- ENVIRONMENT APPROACH

24. POWER SECTOR REFORMS

25. MAJOR FEATURES OF THE POWER REFORM ACT Privatization of National Power Corporation generating assets Creation & privatization of Transmission Company (TRANSCO) Creation of Power Sector Asset and Liabilities Management Corporation (PSALM) Wholesale Electricity Spot Market

26. NEW POWER STRUCTURE Creation of several Gencos clusters Unbundling of electricity tariffs for transparency Opening up of high voltage transmission lines for easy access of distributors and large consumers Opening up of distribution lines for competitive consumers

27. COLLABORATIVE ACTIONS IN ASEAN...

28. ASEAN PLAN OF ACTION FOR ENERGY COOPERATION Interconnection of energy infrastructure ASEAN Power Grid Trans-ASEAN Gas Pipeline Economic integration –Regional sustainability –Supply security

29. ASEAN PLAN OF ACTION FOR ENERGY COOPERATION Promotion of clean coal technology Existing NRE projects Enhance energy security and diversification Advocacy of energy efficiency practice in ASEAN buildings and industries Environmental quality

30. MALAMPAYA’S LINK TO TRANS-ASEAN GRID

31. Vast energy potential in various energy sources New laws and policies promulgated Government’s firm commitment to energy development and industry deregulation Economic viability of energy-related projects with 5% to 6% p.a. electricity demand growth WHY IS PHILIPPINE ENERGY SECTOR ATTRACTIVE?

32. THANK YOU! www.doe.gov.ph