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View/Download the PDF File of 2019-2020 Energy Accomplishment Report Table of Contents i MESSAGE 1 EXECUTIVE SUMMARY 08 BALANCING THE ENERGY PORTFOLIO • Conventional Energy (Oil, Gas, Coal) • Downstream Natural Gas • Power Development • Downstream Oil 24 MOVING TOWARDS A CLEAN ENERGY FUTURE • Renewable Energy • Biofuels • Alternative Fuels • Nuclear Power Program • Hydrogen • Smart Grid Policy 36 ENERGY EFFICIENCY FOR A GREEN ECONOMIC RECOVERY 40 ENSURING ENERGY ACCESS FOR ALL 46 INITIATING GOOD GOVERNANCE AND TRANSPARENCY 50 ESTABLISHING A RESILIENT ENERGY SECTOR 58 FOSTERING REGIONAL ALLIANCE 62 LIST OF ISSUANCES 64 DOE OFFICIALS ENERGY SECTOR ACCOMPLISHMENT REPORT: 2019-2020 Message The period 2019-2020 goes down in history as one of the most challenging periods of the 21st century. Our world is plagued with uncertainties and dangers brought about by climate change and the health pandemic. The challenge for government is to do more and to do better. Amidst the unprecedented economic and health crises, the Philippine Department of Energy (DOE) will continue to deliver its thrust of implementing effective policies that strengthen the Philippine energy sector and guide our nation in navigating these seemingly uncharted waters. The DOE reignites the Philippine energy pathway through the following focus areas: • Energy security • Resiliency of the energy system • Transition to clean energy and new technologies The 2019-2020 Energy Sector Accomplishment Report tracks down the major activities undertaken to ensure the achievement of a balanced energy portfolio, a smooth transition to a clean energy future and energy efficiency and conservation towards a green economic recovery and building back better. It commits to reinvigorate an accessible energy for all programs through good governance, transparency and resiliency. It likewise reiterates the significance of a healthy and mutually beneficial regional alliance. ALFONSO G. CUSI The tasks we are facing are daunting and insurmountable. Secretary Department of Energy To the DOE family, let us remain steadfast and rally behind one another to keep the bayanihan spirit alive in our commitment to serve the people who have put their trust and faith in us. To all our consumers and stakeholders, we reaffirm our pledge that the DOE will not waver in the delivery of affordable energy that is sustainable and accessible to all, while ensuring a robust and resilient energy system that will continue to serve our people through natural and man- made calamities, today and for generations to come. Mabuhay! 4i Executive Summary The DOE remains steadfast with its mission of improving that reached recommendatory status for awarding the quality of life of the Filipinos by formulating and five (5) applications that are currently in post- and implementing policies and programs to ensure evaluation stage. In 2020, two (2) applications sustainable, stable, secure, sufficient, and accessible with total investment cost of USD 50 million were energy. In achieving such mission, the DOE endeavors to recommended to the President for the award of balance between the provision of reliable and reasonably service contracts. priced energy services to support the country’s inclusive growth, and the protection of the environment. Energy Apart from supervising and monitoring 19 active resiliency remains at the core of the DOE’s initiatives to petroleum service contracts (SCs), the DOE also mitigate the impact of any disaster with its adoption in oversees the existing 32 coal operating contracts the planning and programming of energy programs and (COCs) - 22 COCs are in development and projects. production (D/P) stage, four (4) in exploration phase, and six (6) are for conversion from BALANCING THE ENERGY exploration to D/P stage. Semirara Mining and PORTFOLIO Power Corporation remains as the largest coal producer accounting for 90 percent of domestic The realization of energy supply security in the long-term production. requires a harmonious interplay of the various energy sub-sectors. This also entails a well-coordinated energy Downstream Natural Gas value chain for stability, from resource development up to utilization. The corresponding plans and programs Dubbed as the fuel of the future, natural gas is an implemented at the sectoral level are pivotal in assisting energy resource that is deemed to augment the the country’s economy. country’s rising energy demand. The initiatives on the natural gas industry benefitted from the Gas Conventional Energy Policy Development Project (GPDP). The GPDP is a 16-month Technical Assistance (TA) designed to A key development that promotes energy security implement the Philippine Downstream Natural Gas and drives resource exploration in the country is Regulation (PDNGR). The project commenced in President Rodrigo Duterte’s lifting of the moratorium September 2018 and concluded in January 2020 in the West Philippine Sea. The consequent resulting in the formulation of comprehensive resumption of exploration activities for new oil and reference documents – Investors’ Guide and gas fields potentially carries an expected investment Evaluators’ Guidebook and Research Studies on of USD 25 million that may increase to USD 78 Natural Gas in the Philippines. These documents million with the service contractor’s fulfillment of its will ably aid investors, reviewers, and the industry work program commitments. The implementation as a whole. of the Philippine Conventional Energy Contracting Program (PCECP) complements the move to Anchored on the vision of establishing the boosting petroleum exploration. Since its launching Philippines as a liquefied natural gas (LNG) trading in 2018, the DOE processed six (6) area applications and trans-shipment hub that will cater to the Asia- ENERGY SECTOR ACCOMPLISHMENT REPORT: 2019-2020 1 Pacific Region, the DOE approved and issued Notice costs (SCC) and stranded debts (SD) transferred to Proceed (NTP) permits from 2018-2020, which to and assumed by the Power Sector Assets and authorized the development and construction of Liabilities Management (PSALM) Corporation. Both three (3) LNG Regasification Terminal projects in SCC and SD form part of the UC and are passed Batangas and one (1) in Quezon. The proposed on to consumers. On the other hand, the latter facilities in Batangas are expected to provide ensures the uninterrupted electricity supply from value proposition considering the existing market generating plants to end-users and protect the of Malampaya while the one in Quezon will serve integrity and reliability of the country’s transmission, potential markets in the neighboring provinces. sub-transmission, and distribution systems. Moreover, construction of these LNG import facilities will require a total capital expenditure of In an effort to ensure continuous supply of PhP 64.6 billion. electricity and assist all industry players despite the pandemic, the DOE issued advisories and Power Sector emergency measures covering: a) deferment of payments and obligations for 30 days (18 March Power remains as one of the fundamental energy 2020); b) continuous operation of generation sub-sectors as electricity is a valued commodity. facilities, WESM, and electric cooperatives (ECs); c) In 2020, the country’s existing installed enhanced community quarantine (ECQ) extension generating capacity increased by 2.8 percent (16 April 2020); d) grace period for electricity reaching 26,250 MW. The ongoing coronavirus bills falling under the ECQ (07 May 2020); and e) disease (COVID-19) pandemic had an impact implementation of a 30-day period and staggered on the demand wherein the country recorded a payment without interests, penalties and other peak demand of 15,282 MW, 1.9 percent lower charges to all payments due within the community compared from the previous year. quarantine in the entire power sector value chain (23 September 2020). With the strain brought by the pandemic, the power sector continued to enhance policies Downstream Oil governing the industry and its stakeholders. These policy issuances include: a) retail market The same with electricity, petroleum products are participation in the Retail Competition and essential commodities that affects the economy’s Open Access (RCOA); b) Wholesale Electricity day-to-day activity. For the downstream oil sector, Spot Market (WESM) covering WESM Mindanao, the country’s inventory level of petroleum products transition to a five-minute WESM, enhancement on stood at 48.8 days of supply equivalent to 2,650 WESM Design/New Market Management System million liters (as of 07 December 2020). This was (NMMS), and establishment of Independent comprised of 35.5 days of on-shore inventory of Market Operator (IMO); c) Embedded Generators; crude and refined products and 13.3 days of supply d) Ancillary Services (AS); e) Direct Connection; in-transit. The inventory level was lower compared f) Performance Audit and Assessment (PAA); to the year ago level of 51 days. g) transfer or relocation of distribution facilities (DOE and Department of Public Works and To ensure that there is sufficient supply, the DOE Highways/DPWH’s Joint Circular); h) Competitive continued to enforce compliance to the minimum Selection Process (CSP); and i) Universal Charge- inventory requirement (MIR). The DOE likewise Missionary Electrification (UCME) Rationalization. monitored the implementation of Executive Order (EO) 113, which temporarily modified the rates of Other significant progressions in the power industry import duty on crude oil and petroleum products were the President’s signing of Republic Act (RA) with
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