By President Duterte
Over the past years, my administration worked tirelessly to make energy sufficient and accessible to all Filipinos to enrich their lives now and in the years to come.
Improved energy access
Despite various calamities, including the COVID-19 pandemic, we managed to improve our electrification level. Consistent with the 100% household electrification target by 2022, we increased our electrification level from 90.7% in 2016 to 94.5% in 2020 or 3.53 million additional households enjoying electricity service.
My administration is exerting all efforts to provide electricity access to the remaining 1.26 million households nationwide.
To further accelerate the government’s electrification efforts, we opened 69 zones in Negros Occidental and Palawan as remote, underserved, and unserved areas that could be serviced by the private sector as a “Qualified Third Party” (QTP). This aims to encourage private sector participation in rural or missionary electrification and speed up the total electrification of the country.
Increased installed and dependable capacities
We also endeavored to increase our installed and dependable capacities to ensure sufficient and secure power supply. In 2020, the installed capacity of the country reached 26,287 megawatts (MW), a growth of 22.70% from 21,424 MW in 2016.
On the other hand, dependable capacity grew by 22.59% from 19,096 MW in 2016 to 23,410 MW in 2020.
Increased power supply in Mindanao
Mindanao’s total installed capacity in 2020 increased by 67.48% from 2,737 MW in 2016 to 4,584 MW while dependable capacity grew by 70.85% from 2,360 MW in 2016 to 4,032 MW. (See table, page 16)
Increased power supply in Mindanao will pave the way for more economic investments and opportunities.
Wholesale Electricity Spot Market (WESM) in Mindanao
The need to improve power supply in Mindanao to address power outages necessitated the adoption of a mechanism for efficient scheduling, dispatch, and settlement of energy transactions.
This was addressed through the WESM. As envisioned under the Electric Power Industry Reform Act, Mindanao started transitioning to an electricity spot market on June 26, 2021.
The full commercial operation of the WESM in Mindanao on July 26, 2021 will attract more power industry investors and provide power supply sustainability in the region. To date, 87 participants are now registered in the WESM in Mindanao.
Mindanao-Visayas Interconnection Project (MVIP)
A single and unified national grid will come to fruition once the MVIP is completed as it connects Mindanao to the Visayas grid. In July 2017, the Energy Regulatory Commission (ERC) granted the National Grid Corporation of the Philippines (NGCP) the provisional authority to implement the project, which is targeted to be completed by December 2022 provided all regulatory requirements are expedited.
The identified potential benefits of the MVIP include reduced investments in power generation as a result of sharing of system reserves, lower number of generation plants to build in either Visayas or Mindanao, and less operating cost due to economic dispatch of generators.
The interconnection will also result in optimized use of available energy resources and additional generation capacities in the country.
Consumer welfare
Protecting the interests of our consumers had been at the core of my administration.
Thus, on May 27, 2021, I signed RA No. 11552, extending the lifeline rate or the subsidized rate in electricity bills for poor households for 30 years or until 2051, among others.
With this, around five million households are expected to benefit from the subsidized rate, with majority (2.65 million households) currently located in the National Capital Region (NCR).
This is in addition to the advisories issued in March 2020 during the enhanced community quarantine providing for, among others, the deferment of obligations and dues for the benefit of electricity consumers. They were also provided with a grace period to pay their bills and staggered payment option without interests, penalties, and other charges.
Advanced energy efficiency and conservation
Central to energy security is the integration of Energy Efficiency and Conservation (EE&C) as a national way of life. To build this culture and strengthen the implementation of our EE&C Law, we have been working to implement EE&C principles across all sectors of society.
Among our most recent initiatives and measures towards this end include:
Creation of the Inter-Agency EE&C Committee to evaluate and approve government energy efficiency projects and provide strategic direction in the implementation of the Government Energy Efficiency Program.
As a result, energy savings from government energy management program from January 2020 to March 2021 reached 11,613,746 kilowatt hours, equivalent to almost P98 million in monetary savings and carbon dioxide avoidance of almost 6,000 tons; and
Adoption of the Guidelines on the Energy-Conserving Design of Buildings to attain efficient energy utilization in buildings in accordance with energy conservation concepts and contribute to energy crisis mitigation.
As of June 2021, we had 162 Green Building Projects across the country.
• Secured the future of the energy sector
In the last five years, the following initiatives shaped the Philippine energy sector into one that focuses on energy security, access, reliability, and resiliency.
• We faithfully implemented RA no. 9513 or the Renewable Energy (RE) Act of 2008.
Towards this end, we ordered a periodic review of the law to determine our accomplishments and find better ways to promote our indigenous RE sources.
To date, the Philippines still has the highest RE share in the total primary energy supply among the Association of Southeast Asian Nations (ASEAN). (See table above)
In addition, the following recent policy shifts are aimed to boost RE:
Opened our geothermal sector to increased foreign investments by allowing 100% foreign participation in large-scale geothermal projects through Financial and Technical Assistance Agreements (FTAAs).
Under the third Open and Competitive Selection Process (OCSP 3), foreign companies were allowed to participate in geothermal exploration, development, and utilization activities, so long as these were large-scale, or had a minimum investment cost of about $50 million, and were pursued under FTAA, as provided under the Philippine Constitution.
A total of 22 Pre-Determined Areas (PDAs) covering potential geothermal and hydropower resources had been identified and were presented to various stakeholders during the launch of OCSP 3 in January 2021.
These PDAs, composed of 17 potential hydro projects and five geothermal projects, have a total potential capacity of about 150 MW and will be offered to RE developers deemed qualified based on the criteria set by the DOE.
Declared a moratorium on the endorsement of greenfield coal-fired power plants as the country needs to move towards a more flexible power mix.
This is to help build a more sustainable and resilient power system which can accommodate new, cleaner, and indigenous technological innovations.
Conventional energy contracting
We launched the Philippine Conventional Energy Contracting Program to facilitate the exploration and development of our indigenous energy resources and revitalize our upstream oil and gas sector.
As a result of our strong local and international promotional efforts, we received 14 applications to this program.
We are looking forward to the awarding of compliant applications, and the entry of more interested parties this year.
Apart from gradually displacing the share of fossil-based fuels in the energy supply mix, the deployment of more RE projects allowed us to generate P221.3 billion of investments since the implementation of the RE law in 2008.
More than half of which, or around P123.5 billion, was secured from awarded RE projects in the last five years alone (2016-2020). This provided new opportunities and created gainful employment for around 550,000 Filipinos.
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