Project Overview

1
Promotion of Demand-Side Management and Renewable
Energy under a Competitive Electricity Market
The Philippines Case Ms. Irma C.
Exconde Presented to the 6th Asian Development
Research Forum General Meeting June 7- 8, 2004,
Siam City Hotel Bangkok, Thailand
2
Outline of Presentation

• Overview of Energy Supply and Demand
• and National Energy Policies
• Energy Conservation Policies
• Renewable Energy Promotion Policies

3
ENERGY SUPPLY AND DEMANDandNATIONAL ENERGY
POLICIES
4
Energy Supply and Demand
Primary Energy, 2002 vs 2001
1/ MMBFOE - Million Barrels of Fuel Oil
Equivalent
5
Energy Supply and Demand Situationer
Energy Consumption by Sector, 2002 vs 2001
1/ MMBFOE - Million Barrels of Fuel Oil
Equivalent
6
POWER SECTOR SITUATIONER
Generation / Transmission / Distribution, 2003
Luzon
Visayas

• Interconnection
• Leyte-Luzon (440 MW)
• Leyte-Cebu (200 MW)
• Cebu-Negros (100 MW)
• Negros Panay (100 MW)
• Leyte-Bohol (35 MW)

Mindanao
7
Energy Supply and Demand Outlook
Energy Demand by Sector, 2004-2013
MMBFOE - Million Barrels of Fuel Oil Equivalent
8
SUPPLY DEMAND PROFILE
Luzon, 2004 2013
16100
Hydro - 350 MW
MW
Wind Power 65 MW
Additional Capacity Needed
12100
8100
Plant Retirements Oil-based 210 MW
(2009) Oil-based 650 MW (2010)
4100
100
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0
0
0
0
0
0
150
600
1350
900
750
1050
Indicative .Capacity
0
0
350
0
65
0
0
0
0
0
0
0
Committed
10435
10520
10520
10520
10520
10520
10520
10310
9660
9660
9660
9660
Existing
6,039
6,454
6,937
7,473
8,076
8,662
9,323
10,036
10,786
11,575
12,406
13,280
Peak
9
SUPPLY DEMAND PROFILE
Cebu, 2004 2013
1000
MW
Inteconnection Uprating
800
Additional Capacity Needed
600
400
200
Plant Retirements Oil-Based Plant 98.8 MW
(2011)
0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0
0
0
0
0
0
100
100
50
150
50
50
Indicative Capacity
180
180
180
360
348
325
299
271
241
209
175
139
Leyte-Cebu Int.
361
361
361
361
361
361
361
361
361
281
281
281
Existing
407
435
467
502
541
579
621
666
713
762
813
866
Peak
10
SUPPLY DEMAND PROFILE
Negros, 2004 2013
Interconnection Uprating
500
MW
Geothermal 60MW Biomass Cogen 80 MW
Additional Capacity Needed
400
300
200
100
0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0
0
0
0
0
0
0
0
0
0
50
50
Indicative Capacity
0
0
0
140
0
0
0
0
0
0
0
0
Committed
90
90
74
90
168
107
139
166
139
128
93
53
Cebu-Negros Int.
180
180
180
180
180
180
180
180
180
180
180
180
Existing
197
207
219
232
246
259
273
287
302
317
332
347
Peak
11
SUPPLY DEMAND PROFILE
Panay, 2004 2013
600
Interconnection Uprating
MW
500
Oil-based - 150 MW
Additional Capacity Needed
400
300
200
Plant Retirements Oil-based 75 MW
(2007, 2009)
100
0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0
0
0
0
0
0
0
50
100
150
200
250
Req'd. Cap. Add.
0
0
150
150
150
150
150
150
150
150
150
150
Committed
73
62
34
90
180
138
156
169
127
101
101
96
Negros-Panay Int.
141
141
141
141
141
116
116
66
66
66
66
66
Existing
183
195
210
225
243
260
279
299
320
342
365
389
Peak
12
SUPPLY DEMAND PROFILE
Mindanao, 2004 2013
2500
MW
Coal - 200 MW
2000
Additional Capacity Needed
1500
1000
500
0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0
0
100
0
0
0
200
0
150
0
100
Indicative Capacity
0
0
200
0
0
0
0
0
0
0
Committed
0
0
1422
1422
1422
1422
1422
1422
1422
1422
1422
1422
1422
1422
Existing
995
1,04 9
1,112
1,181
1,259
1,331
1,412
1,498
1,586
1,676
1,769
1,864
Peak
13
Energy Supply and Demand Outlook
Projected Energy Supply, 2004-2013
MMBFOE - Million Barrels of Fuel Oil Equivalent
14
National Energy Policy Framework

• Promote economic growth, alleviate poverty and
  foster market-based industry through the
  following objectives
• Ensure sufficient, stable, secure, accessible
  and
• reasonable prices energy supply
• Pursue cleaner and efficient energy
  utilization and clean
• energy technology applications
• Cultivate strong partnerships and
  collaboration with key
• partners and stakeholders through
  establishments of
• arrangements to enhance sustain private
  sector support,
• participation and cooperation in energy
  projects

15
National Energy Policy Framework

• Promote economic growth, alleviate poverty and
  foster market-based industry through the
  following objectives
• Empower and balance the various interests of
  the
• energy public by conducting consumer
  welfare and
• protection awareness and advocacy programs
  and
• establishment and operationalization of
  appropriate
• consumer feedback and monitoring mechanisms

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Electric Power Industry Reform
What has been Done

• Unbundled the generation, transmission,
  distribution and
• supply functions to achieve a transparent
  and reasonable
• price of electricity
• Adopted the Long-Run Avoidable Cost Pricing
• Methodology to standardize the generation
  charges in
• Luzon, Visayas and Panay/Bohol
• Established a prototype Wholesale
  Electricity Spot Market
• Created the Philippine Electricity Market
  Corporation

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WAY FORWARD

• Power Development Planning is expected to evolve
  as we move forward in restructuring the power
  sector
• Need for viable sustainable power rates to
  encourage new investments in power generation
• Power reform is geared towards promoting
  competitive pricing to attain the true cost of
  energy
• WESM implementation will encourage competitive
  new entrants
• Distribution utilities are responsible to sign up
  new power supply agreements directly with IPPs
• The success of the electricity reform program is
  a concerted effort of the public and private
  sectors

18
ENERGY CONSERVATION POLICIES
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Demand Side Management (DSM)

• DSM Framework became effective December 29, 1996
  with the following goals
• To increase efficiency in generation,
  transmission and
• distribution of electricity and defer
  construction of
• power generating plants
• To offer alternatives to utilities to
  optimize resources
• and provide flexible options to reduce
  operating costs
• and increase cost-competitiveness
• To induce customers/consumers of electricity
  to adopt
• measures to effect changes in energy
  consumption and
• utility load shape
• DSM Framework delineated the roles of DOE,
  Electric Utilities and Electric Consumers to
  attain the above goals

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Energy Efficiency and DSM Programs and Projects

• Information and Educational Campaign
• Conducted workshops and seminars on
  efficient utilization
• of electricity in the household, academe,
  commercial,
• industrial and manufacturing
  establishments
• Power Patrol Program (Power Conservation and
• Demand Management 2.73
  MMBFOE savings
• Road Patrol Program 1.64
  MMBFOE savings
• Government Energy Management Program (GEMP)
• 
  3.17 MMBFOE savings

21
Energy Efficiency and DSM Programs and Projects

• Technical Assistance
• Programs include on-site surveys, energy
  audit,
• improvement of plant operational
  efficiency, mandatory
• reduction of systems losses,
  implementation of DSM
• 
  48.76 MMBFOE savings
• Heat Rate Improvement Program
  
• 2.09 MMBFOE savings
• Enactment of Anti-Pilferage of Electricity
  and Theft of
• Electric Transmission Lines/Materials Act
  of 1994
• 
  3.39 MMBFOE savings
• Other DSM Programs High Efficiency
  Lighting, Motor
• Efficiency, Consumer Efficiency
  Awareness, Power Factor
• Correction
  0.95 MMBFOE savings

22
Energy Efficiency and DSM Programs and Projects

• Consumer Protection
• Ensure consumers are protected from unscrupulous
  trading
• and market practices and sub-standard
  energy efficient
• products and services
  
• 26.26 MMBFOE savings
• Program Components
• Efficiency Standards and Labeling for Room
  Airconditioners
• Energy Labeling of Refrigerators
• Labeling for Compact Fluorescent Lamps
• Labeling for Fluorescent Lamp Ballasts
• Performance Certification of Fans and Blowers
• Efficiency Standards and Labeling of for
  Electric Fans
• Labeling for Linear Fluorescent Lamps
• Labeling for Electric Motors
• 
  

23
Issues in DSM Implementation

• Lack of clear-cut and more responsive
  regulatory policy to
• incentivize the promotion of DSM
  programs
• Recovery of lost revenues
• Financing for DSM projects
• Standard Retail Tariff
• Inclusion of costs in the consumers
  electric bill
• Pilot Project Syndrome
• Excess Capacity
• Subsidy
• DSM Promotion

24
Way Forward

• To promote universal use of energy efficient
  electric
• products, service and
  technologies
• To set minimum DSM goals for large
  utilities and simple
• DSM plan for small utilities and
  cost recovery
• plans for utilities who opted
  not to submit a DSM plan
• To create of a System Benefits Charge

25
RENEWABLE ENERGY PROMOTION POLICIES
26
Renewable Energy (RE)

• RE Framework aims to facilitate the energy
  sectors transition to a sustainable system with
  RE as an increasingly prominent, viable and
  competitive fuel option.
• Objective
• To be the worlds geothermal energy producer
• To be the leader in wind energy production
  in Southeast
• Asia
• To double hydropower installed capacity in
  2012
• To expand contribution of biomass, solar
  and ocean
• to the energy mix

27
Renewable Energy (RE)

• Institutional Arrangements
• Agencies Involved Department of Energy,
  National Electrification Administration, National
  Power Corp., Philippine National Oil Co., Energy
  Regulatory Commission, National Economic and
  Development Authority, Board of Investments,
  Department of Environment and Natural Resources
• Programs and Projects
• Rural Electrification of Unviable Areas

28
Barriers to Promotion of RE Under a Competitive
Electricity Market

• Non-comprehensive development plan on NRE
• RE projects not directed towards
  sustainability and real
• market approach
• Lack of clear policies and appropriate
  legislation on RE
• applications
• Lack of appropriate incentives for RE
• Uneven playing field in the area of RE
• Unfavorable utility regulations
• Difficulty in establishing power contract
• Difficulty in accessing traditional financing
  windows
• Lack of capacity in project packaging and
  presentation
• Lack of private sector involvement in small
  to medium scale
• RE projects

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Barriers to Promotion of RE Under a Competitive
Electricity Market

• Lack of success stories on sustainable RE
  applications in the
• country
• Lack of technology extension to users and
  suppliers of RE
• technologies
• Ineffective RE promotion and advocacy
  programs

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Way Forward

• Facilitate transformation of RE as an
  economically
• viable industry
• Enactment of the Proposed Renewable Energy
  Bill
• Salient Features
• gt On-grid Renewable Energy Development
• gt Off-Grid Renewable Energy Market
• gt Fiscal and Non-Monetary Incentives and
  Privileges
• Maximize the role of the private sector in
  off-grid rural
• electrification
• Establish national standards for renewable
  equipment

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THANK YOU