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Guide Questions and Answers on Energy

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Guide Questions and Answers on Energy GUIDE QUESTIONS AND ANSWERS ON ENERGY 29 August 2017 Compiled by: Consumer Welfare and Promotion Office Table of Contents FOSSIL FUELS ................................................................... 1 OIL AND GAS ..................................................................................... 1 1. Why is there a need to explore for Oil and Gas resources? .................... 1 2. What is a seismic survey and how is it conducted? ................................. 1 3. What is exploration drilling and why is it important? ................................ 3 4. How are seismic surveys and exploration drilling permitted in the Philippines? ........................................................................................ 3 5. How does an exploration company become the contractor of an SC and what activities does it have to perform? ...................................... 4 6. Is the DOE/Service Contractor's project covered by relevant environmental clearances? ....................................................................... 4 7. Are Local Government Units (LGUs) and Non-Governmental Organizations (NGOs) consulted on the Project? .................................... 5 8. What are the benefits of the project for the local communities? .............. 5 9. When will LGUs share in the benefits of commercial resource extraction? ................................................................................. 5 10. What are the fiscal terms in the Philippines? ........................................... 6 11. What is the historical production of oil and gas? ...................................... 7 12. How many Service Contracts are currently being supervised and monitored by DOE?......................................................... 8 COAL .................................................................................................. 9 13. Where are the country's coal deposits and coal mines? .......................... 9 14. How much is local coal production to date? ............................................. 9 15. What is the current coal demand/consumption? .................................... 10 16. What is the Philippines' coal potential? .................................................. 10 17. Does the Philippines have high-quality coal? ......................................... 10 18. What programs are being undertaken by the department to spur coal exploration and development activities? ................................. 11 19. What are the investment opportunities in the coal sector? .................... 11 20. How many Coal Operating Contracts (COCS) do we have in the Philippines? ...................................................................... 12 21. What are the incentives under the Coal Operating Contract (COC) system? ....................................................................................... 12 22. How does coal use affect the environment and what are the mitigating measures? ................................................................. 12 23. How do you plan to address mounting opposition to coal? .................... 13 RENEWABLE ENERGY .................................................... 14 RENEWABLE ENERGY ................................................................... 14 24. What is Renewable Energy? .................................................................. 14 i Table of Contents 25. What is the state policy on Renewable Energy? .................................... 14 26. What are the salient provisions of the 2008 RE law? ............................. 14 27. What are the incentives being offered under RE law? ........................... 15 28. What are the economic benefits in the RE law? ..................................... 16 29. How does RE become administratively feasible? .................................. 16 30. Is RE politically feasible? ........................................................................ 16 31. Is there any study that the DOE has conducted that quantifies the losses and gains of the proposed measures or policy interventions that make the proposed incentives RE necessary for public good? ..................................................................... 17 32. The proposed measures are based on policies being implemented in Europe. Is there any study that reports the effectiveness of such policy measures? ................................................. 17 33. What about the impact of proposed measures to the rates of electricity? What will offset such impact? .................................. 18 34. How many RE contracts have been awarded so far? And how much potential and installed capacities were incurred? ......................... 18 35. What is Feed-in Tariff (FIT)? .................................................................. 19 36. Why do we need the FIT? ...................................................................... 19 37. What are the rules governing the FIT system? ...................................... 19 38. What is “installation target”? And why do we need it in the FIT system? ................................................................................................... 19 39. What is FIT rate? .................................................................................... 19 40. What is FIT-ALL? .................................................................................... 20 41. How is FIT-ALL calculated? .................................................................... 20 42. What are the latest approved FIT rates? ................................................ 20 43. How to be FIT eligible RE Project? ......................................................... 21 44. What is the FIT implementation process? .............................................. 21 45. What is Net Metering? ............................................................................ 21 46. Why is Net Metering an important incentive? ......................................... 21 47. How Net Metering works?....................................................................... 22 48. What is a typical Net Metering set-up? ................................................... 22 49. What types of power generating facilities are eligible for Net Metering? ................................................................................................ 22 50. What benefit will I get if I go into Net Metering? ..................................... 22 51. What is the optimum size of an RE facility that I can install in my premises?.......................................................................................... 23 52. How can you apply for Net Metering services with your distribution utility? ................................................................................... 23 GEOTHERMAL ENERGY ................................................................. 24 53. What is Geothermal Energy? ................................................................. 24 54. What elements compose a geothermal system? ................................... 24 ii Table of Contents 55. What are the different manifestations of a geothermal system? ............ 25 56. How is geothermal resources being studied, developed and utilized as an energy source? ................................................................. 25 57. How does a geothermal power plant differ from other power plants? .................................................................................................... 25 58. Can a geothermal operation cause a volcanic eruption? ....................... 26 59. What are the investment opportunities in the geothermal sector? .................................................................................................... 26 60. What are the incentives under the Geothermal Service Contract System? .................................................................................................. 26 61. What are the possible direct-use application in the Philippines? ........... 27 62. Why is Geothermal not included in the Feed-In-Tariff (FIT)? ................. 27 63. What is Renewable Energy Safety, Health and Environment Rules and Regulations (RESHERR)? .................................................... 28 64. What is the Department’s Position on the Issues being raised by Concerned Non-governmental Organization (NGOs)? ..................... 28 65. How to avail additional investments for RE projects? ............................ 30 HYDROPOWER ................................................................................ 30 66. What is a hydroelectric power resource? ............................................... 30 67. What is a hydroelectric power system? .................................................. 30 68. How are hydropower resources developed? .......................................... 31 69. What are the major components of a hydropower facility? .................... 31 70. What are the procedures in the development and operation of a hydropower facility/ (ies)? ....................................................................... 31 71. What are the documentary requirements for Service Contracts? .......... 32 72. How much is the investment requirement for hydropower project? ................................................................................................... 33 73. Can a foreigner invest in hydropower projects? ..................................... 33 74. Are there any successful hydropower projects in the Philippines? ............................................................................................
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