ENERGY SECTOR INVESTMENT OPPORTUNITIES

JOSE RENE D. ALMENDRAS Secretary Department of Energy

PRESENTATION OUTLINE
Energy Reform Agenda Investment Requirements Investment Opportunities in:
Energy Resource Development Alternative Fuels Power Generation Energy Efficiency and Conservation

ENERGY REFORM AGENDA

“Energy Access for More”
A key priority of government to mainstream access of the greater majority to reliable energy services and fuel, most importantly, local productivity and countryside development

Good Governance thru stakeholder participation, transparency, multi-sectoral partnership and use of ICT

Ensure Energy Security

Achieve Optimal Energy Pricing

Develop a Sustainable Energy System

INVESTMENT REQUIREMENTS (2010-2030)
Sector Fossil Fuel Resources Renewable Energy Resources Alternative Transport Fuels Power and Transmission Development Downstream Sub-Total Cost of power plant construction included in the Investment Cost of Renewable Energy Projects Total in Billion Php 543.93 902.48 41.37 342.54 59.61 1,889.93 62.74 In Billion US $ 24,476.85 40,611.60 1,861.65 15,414.30 2,682.45 85,046.85 2,823.30

Total

1,827.19

82,223.55

ENERGY RESOURCE DEVELOPMENT
Oil and Gas Coal Renewable Energy
(geothermal, hydropower, other RE)

EXISTING OIL & GAS SERVICE CONTRACTS

• Mean total resource of 8,895

billion barrels of oil equivalent
- 28,531 billion cubic feet of gas - 3,629 billion barrels of oil

OIL AND GAS AVAILABLE AREAS
Contract Areas AREA 1 AREA 2 AREA 3 AREA 4 AREA 5 AREA 6 AREA 7 AREA 8 AREA 9 AREA 10 AREA 11 AREA 12 Coverage (has.) 544,000 676,000 600,000 616,000 424,000 840,000 844,000 840,000 840,000 640,000 600,000 456,000 Location Cagayan Central Luzon Northwest Palawan Northwest Palawan Northwest Palawan Mindoro-Cuyo Mindoro-Cuyo East Palawan East Palawan East Palawan East Palawan Cotabato

(Development / Production – 30)

(Exploration – 30)

AVAILABLE AREAS  Argao, Cebu  Bislig, Surigao del Sur  Siocon, Zamboanga del Norte

GEOTHERMAL SERVICE CONTRACT AREAS
(PRODUCING FIELDS)
Mt. Makiling-Banahaw, Laguna/Quezon
Total installed capacity: 458.53 MWe

Tiwi,Albay
Total installed capacity: 289 MWe

LUZON

Bacon-Manito, Albay/Sorsogon
Total installed capacity: 151.5 MWe

Tongonan, Leyte
Total installed capacity: 722.68 MWe

VISAYAS Northern Negros, Negros Occidental
Total Installed capacity: 49.35 MWe

Palinpinon, Negros Oriental
Total Installed capacity: 192.5 MWe

MINDANAO Mt. Apo, North Cotabato/Davao
Total Installed capacity: 108.48 MWe

GEOTHERMAL SERVICE CONTRACT AREAS
(PRE-DEVELOPMENT STAGE)
Bontoc-Sadanga, Mt. Province (80 MW) Buguias-Tinoc, Benguet/Ifugao (60 MW) Daklan, Benguet (60 MW) Acupan, Benguet (20 MW) Natib, Bataan (40 MW) Maibarara, Laguna (20 MW) Mabini, Batangas (20 MW) Montelago, Oriental Mindoro (40 MW) LUZON Kalinga, Kalinga (60 MW)

Mt. Labo, Camarines Norte (65 MW)
Isarog, Camarines Sur (70 MW) Mt. Bulusan, Sorsogon (40 MW)

Biliran,Biliran (20 MW) Mt. Cabalian, Southern Leyte (80 MW) Sta. Lucia-Iwahig Puerto Princesa City, Palawan (~1 MW)

VISAYAS

MINDANAO Mainit, Surigao del Norte (30 MW) Amacan, Compostela Valley (20 MW)

HYDROPOWER PROJECTS
Project Name Location Estimated Estimated Estimated Project Capacity Project Cost Cost (MW) (Million USD) (Million PhP)
33.8 25.0 10.0 175.0 46.0 10.0 11.3 17.5 30.6 25.0 384.2 84.50 62.50 25.00 437.50 115.00 25.00 28.25 43.75 76.50 62.50 960.50 3,802.50 2,812.50 1,125.00 19,687.50 5,175.00 1,125.00 1,271.25 1,968.75 3,442.50 2,812.50 3,222.50

Amburayan River Hydropower Prospect Atok, Benguet Ilaguen Hydropower Prospect San Mariano, Isabela Quirino Hydropower Prospect Binongan Hydropower Prospect Addalam Hydropower Prospect Hubo hydropower Prospect Asiga River Hydropower Prospect Quirino, Ilocos Sur Tineg, Abra Aglipay, Quirino San Agustin, Surigao del Sur Santiago, Agusan del Norte

Cateel E Hydropower Prospect Davao del Norte Tran AC River Hydropower Prospect Lebak, Maguindanao Lake Mainit River Hydropower Prospect Jabonga, Agusan del Norte TOTAL *Initial list of Frontier Areas

ALTERNATIVE FUELS
Program Biodiesel Bioethanol 2009 Actual Production (in Million Liters) 136.5 23.3 Demand (in Liters) 130.9 87.3 2009 Production Capacity (in Million Liters) 395.6 49.0

Gasoline demand of 4.61 billion liters in 2011 will require bioethanol blend of 230.5 million liters (@ 5% minimum) and 461 million liters (@10% mandatory) Need at least 6-13 production plants at 30 million liter/yr capacity to meet the 5% or 10% mandated bioethanol blends in 2011, respectively Potential sites: Negros, Bukidnon, Zamboanga, Tarlac, Pampanga and Cagayan

POWER GENERATION

STATUS OF EPIRA IMPLEMENTATION
OPEN ACCESS AND RETAIL COMPETITION
Almost there.
• 91.8 % of NPC GenCos • NGCP as the TransCo Concessionaire • 68 % transferred to IPP Administrators

Establishment of WESM
• Luzon Commercial Operation on June 2006 • Preparation for WESM Visayas

Complied with.

Removal of Cross Subsidies
Inter-Grid Sept. 2002 Intra-Grid Oct. 2005 Inter-Class Oct. 2005

Complied with.

Unbundling
Rates are Structured and Unbundled.

Complied with.

Moving Towards A Competitive Power Market

LUZON POWER DEMAND AND SUPPLY OUTLOOK
Luzon grid needs a total additional capacity of 11,900 MW onwards to 2030
25,000

600 MW Coal-Fired (GN Power);
20,000

33.55 MW BacMan II 40.8 MW BacMan I-2

15,000

MW
10,000

4.6 % AAGR
Malaya (685.83 MW) Retirement

5,000

0
Required Additional Cap Committed Existing Capacity Required Reserve Margin Peak Demand

2009

2010 2011 300 41

2012 2013 300 634

2014 450

2015 2016 450 450

2017 2018 500 600

2019 650

2020 2021 500 650

2022 2023 650 650

2024 2025 800 650

2026 800

2027 2028 900 800

2029 2030 900 900

10,030 10,030 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 9,384 1,646 1,701 1,774 1,865 1,944 2,038 2,135 2,235 2,327 2,432 2,541 2,656 2,775 2,900 3,031 3,167 3,310 3,459 3,615 3,778 3,949 4,127 7,036 7,270 7,582 7,934 8,309 8,710 9,123 9,553 9,945 10,393 10,860 11,349 11,860 12,39412,952 13,53514,145 14,783 15,450 16,147 16,87517,636

Assumption: High Demand Forecasts

VISAYAS POWER DEMAND AND SUPPLY OUTLOOK
Visayas grid needs a total additional capacity of 2,150 MW onwards to 2030
4,500 4,000 3,500 3,000 2,500

240 MW Coal-Fired

(Cebu Energy Dev’t Power Corp, CEDC)
160 MW Coal-Fired (Panay Energy Dev’t. Corp.) 200 MW CFPP (KEPCO-Salcon) 17.5 MW Panay Biomass(GPP)

20 MW Nasulo Geo (EDC)

MW
2,000 1,500 1,000 500 0
Required Additional Cap Committed Existing Capacity Required Reserve Margin Peak Demand 311

4.6 % AAGR

CEBU LBGT (48 MW) Retirement
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 150 240 335 398 339 348 361 375 390 406 420 442 464 487 512 538 565 593 623 654 687 722 758 797 100 150 100 150 100 150 150 150 200 150 200 200 200

1,505 1,505 1,457 1,457 1,457 1,457 1,457 1,457 1,457 1,457 1,457 1,457 1,457 1,457 1,457 1,457 1,457 1,457 1,457 1,457 1,457 1,457 1,331 1,430 1,448 1,486 1,545 1,603 1,666 1,733 1,797 1,887 1,983 2,082 2,187 2,297 2,413 2,535 2,663 2,797 2,938 3,086 3,241 3,404

Assumption: High Demand Forecasts

MINDANAO POWER DEMAND AND SUPPLY OUTLOOK
Mindanao grid needs a total additional capacity of 2,500 MW onwards to 2030
4,500 4,000

42 MW Sibulan Hydro
3,500

8 MW Cabulig Hydro
3,000

MW

50 MW Mindanao Geothermal
2,500 2,000 1,500 1,000

4.6 % AAGR
1X200MW CONAL

500 0
Required Additional Cap Committed Existing Capacity Required Reserve Margin Peak Demand 42

(Saranggani) Phase 1 – 2012 Phase 2 - 2014
2009 2010 2011 2012 50 2013 2014 2015 2016 2017 2018 2019 100 100 50 100 100 100 100 2020 2021 2022 2023 2024 2025 2026 2027 100 100 100 150 150 150 150 150 2028 2029 2030 200 150 200

50
8

200

2x100MW CONAL
1x100MW (Zambo)
652 682 714 747 200MW STEAG

1,682 1,682 1,682 1,682 1,682 1,682 1,682 1,682 1,682 1,682 1,682 1,682 1,682 1,682 1,682 1,682 1,682 1,682 1,682 1,682 1,682 1,682 318 333 347 362 379 396 414 433 454 475 497 520 544 569 596 623 781 817

1,359 1,421 1,483 1,549 1,620 1,692 1,769 1,852 1,942 2,031 2,125 2,223 2,326 2,434 2,546 2,664 2,787 2,916 3,050 3,191 3,339 3,493

1x200MW (no date yet)

Assumption: High Demand Forecasts

El Nino impact: 500MW+

POWER PROJECTS IN LUZON GRID
Northwind Aparri Project (40 MW)=2011 Pagudpud Wind (40 MW) Burgos Wind (86 MW) – 6 MW=2011 40 MW=2012 40 MW=2013 Northwind Pamplona (30 MW)=2011 APEC CFB Phase II (50 MW)=2010 Pantabangan Expansion (78 MW) 2x300 MW Coal-Fired GN Power (600 MW)=2012 First Gen San Gabriel (550 MW)=2013 Ilijan Expansion (300 MW) TAOil Power Project (2x135 MW)=2013 Green Power Nueva Ecija Biomass (18 MW)=2012 Pangasinan Biomass 1 (18 MW)=2013 Pangasinan Biomass 2 (18 MW) Green Power Isabela Biomass (18 MW)=2012 Balintingon River (30 MW)=2015 Kalayaan CBK Expansion (360 MW)=2014 Pagbilao Exp. (400 MW) Quezon Power Exp.(500 MW)=2016

Energy World Wind Farm (50 MW)=2011 Mauban Wind Farm (12MW)=2014

Legend:
Natural Gas HEP Geothermal Coal-Fired Biomass Wind

Green Power Mindoro Biomass (18 MW)=2017

Tanawon Geo (40 MW)=2013 Rangas Geo (40 MW)=2015 Manito-Kayabon Geo (40MW)=2016 Energy World Kanan B1 HPP (145 MW)=2013

Energy World CCGT (2x150 MW)=2011

- Indicative Projects, 3,448 MW - Committed Projects, 600 MW

POWER PROJECTS IN VISAYAS GRID
Aklan HEP (41 MW)=2012 Villasiga HEP (8MW)=2012 Panay Energy Development Corporation (164 MW)
Unit I=Sept 2010 Unit II=Dec 2010

Cebu Energy Development Corporation (246 MW) Green Power Negros (18 MW)=2014
Unit I=March 2010 Unit II=June 2010 Unit III=Jan 2011

Green Power Samar (18 MW)=2015

Green Power Iloilo (35 MW)
Unit I=2011 Unit II=2012
P A N A Y

Southern Leyte Geo (40 MW) 2019

Legend:
HEP Geothermal Coal-Fired Biomass

KEPCO SPC Power (200 MW)
Unit 1= Feb 2011 Unit II= May 2011

EDC Nasulo Geothermal (20 MW)=2013

Dauin Geo (40 MW) 2017

- Indicative Projects, 186 MW - Committed Projects, 654 MW

POWER PROJECTS IN MINDANAO GRID
Green Power CDO Biomass (18 MW)=2013 CEPALCO Cabulig HEP (8 MW)=June 2011 Tagoloan HEP (68 MW)=2012

Minergy Bunker Fired (20 MW)=4th Qtr. 2010 HEDCOR Sibulan Inc. (42.5 MW) Unit I=March 2010 Unit II=August 2010

AGUS 3 HEP (225 MW)=2011

Conal Holding CFTPP (200 MW) Unit I=2012 Unit II=2014 Legend:
HEP Oil-based Coal-Fired Geothermal Biomass

EDC Mindanao Geothermal 3 (50 MW)=2014

Green Power Davao Biomass(18 MW)=2017

HEDCOR Tamugan. (27.5 MW)=2011

- Indicative Projects, 581 MW - Committed Projects, 100 MW

ENERGY EFFICIENCY AND CONSERVATION

EE&C TECHNOLOGIES
Lighting System (Fluorescent Lamp, Compact Fluorescent Lamp, Light Emitting Diodes, High Pressure Sodium Lamps) Air-conditioning System (Window Type ACU, Package Type ACU, Split Type, Centralized AC (Chiller), Absorption Type, Chilled Water Type AC System) The Energy Management and Building Automation System Green Building High Efficiency Motors High Efficiency Transformer Fuel-Efficient Boiler Heat Exchanger Variable Speed Control for Motors Cogeneration System

SUMMARY

INVESTMENT OPPORTUNITIES
OIL AND GAS Twelve (12) petroleum contract areas in shallow to deep waters with total hectarage of 7,920,000 Possible joint ventures with the existing service contractors COAL Three (3) available contract areas for exploration and development Possible joint ventures with the existing service contractors RENEWABLE ENERGY Possible joint ventures with existing Geothermal Service Contractors for exploration Hydro frontier areas available for pre-development phase Possible joint ventures with the existing service contractors for hydro

INVESTMENT OPPORTUNITIES
ALTERNATIVE FUELS Production plants for bioethanol ENERGY EFFICIENCY & CONSERVATION Promotion and utilization of EE& C Technologies

INVESTMENT OPPORTUNITIES
POWER SECTOR Infrastructures in power generation Greenfield generation projects Possible joint ventures with proponents of indicative projects NPC plants and NPC-IPP contracts for privatization Competition Electricity trading in the Wholesale Electricity Spot Market Transition from a government-supervised Market Operator to an Independent Market Operator Supply/aggregation business Metering service provider Missionary electrification New Power Providers

NEXT STEPS

NEXT STEPS FOR THE INVESTORS
Please contact DOE thru Ms. Lisa Go of the Investment Promotion Office (IPO) for more data/information on the area/project For joint ventures, DOE-IPO will coordinate with the existing service contractors and arrange for a meeting with the interested company. For new areas, DOE-IPO will brief the investor on how to go about an energy project, i.e. service contracts or power generation project; provide with the checklist of requirements and the process flow needed for the type of project DOE-IPO will coordinate with the concerned DOE bureaus or units for more details on given area/site DOE-IPO contact details : Telefax : (+632) 840-2255 E-mail address doe_ipo@doe.gov.ph

SALAMAT PO

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