Daniel Anthony L.

Cabrera

Areas for Future Policy Prescriptions

Identifying the strengths and weaknesses, provide a discussion of your policy
prescriptions/recommendations

In view of the urgent requirement of the Duterte Administration for access to electricity to
alleviate poverty in the countryside and achieve full electrification of households in the
three major islands, the Department of Energy is currently updating the Philippine Energy
Plan 2016-2030 as its contribution to the Ambisyon Natin 2040, outlined under President
Duterte’s Executive Order 5, which laid down the comprehensive energy master plan for
the next decade to deliver reliable and affordable electricity to sustain local economic
growth. The major pillars of the Plan are: a) Ensure energy security through development
of indigenous energy such as renewable energy and hydrocarbon fuels (oil, gas and coal);
b) Achieve optimal energy pricing in electricity and oil; c) Develop sustainable energy
system consistent with the country’s economic development plans.

Among the areas for future policy prescriptions are:

a) One Grid Philippines which aims to connect the Mindanao Grid with the Visayas
and Luzon grids. Currently, only Luzon and Visayas grids are operational, WESM
operations in Mindanao will start in June this year to ensure a reliable and stable
supply of power. Mindanao was not part of the WESM and its power grid was not
connected to the national grid. It was set up in September 2013, but was
suspended following a grid-wide power interruption in the region, preventing power
companies with excess generating capacity to offer their output to distribution
utilities. The strengths of One Grid Philippines are: a) it will build a sustainable
and reliable power supply; b) it will lower electricity rates in the long run. The
weaknesses are: a) The electricity rates will go up in the short run reflecting both
the limited supply of power generation capacity and the need to dispatch oil fired
plants to meet the demand; b) Coal fired plants will be commissioned to create
more abundant and competitive supply of power which can however create more
 pollution and is not environmentally friendly; c) Power plants are expensive and
it takes a long time to build.
b) Proper fuel mix policy. The Department of Energy is working on coming out with
a competitive laden energy mix economics. The proposed 70 percent baseload,
20 percent mid merit and 10 percent peaking and technology neutral power mix
will promote a more competitive market and eventually lower the power costs t
consumers pay. DOE needs to recognize the country’s needs for diversified
energy resources without mandating a strict power generation mix that will limit the
technologies of the private sector. This will help ensure stable baseload and ample
supply of power for the country as it moves towards industrialization. The
strengths of a proper fuel mix policy are: a) It will eventually lower the cost of
electricity; b) It will promote a more competitive market; c) It will provide
sustainable energy. The weaknesses are: a) Environmental concerns.

c) Promote Low Carbon Future which aims to reduce greenhouse gas emissions
through continuous exploration and development of local or indigenous sources
of energy like renewable energy and natural gases. The strengths of promoting
low carbon future are: a) Healthy and clean environment; b) Clean energy.
The weaknesses are: a) There are no large unutilized geothermal fields to
develop; b) renewable energy are very expensive; c) Our country does not
have extremely high potential RE resources (hydro, geothermal, wind, solar, and
biomass); d) Renewable energy alone will not be sufficient to address the energy
requirement of the country.

d) Encourage Investments in Infrastructure and Facilities, the Department of

Energy will plan for and build the portfolio of installed and dependable power
capacities specifically for baseload, mid-merit and peaking requirements aside
from downstream natural gas LNG. DOE will encourage exploration and
development of energy sources including energy crops, upstream biofuels,
establishment of power generation plants by granting tax incentives to investors.
The government can also reducing the number of requirements and permits
required for the establishment of plants and establishing a one-stop shop to
centralize the processing of requirements. The strengths of encouraging
investments in infrastructure and facilities are: a) More investors will be
encourage to come and invest in the Philippines; b) Sustainable energy for the
 future; c) lower price of electricity. The weaknesses are: a) Higher cost at the
start of operations; b) Environmental concerns; c) conflict with indigenous
community.
e) Implement and Monitor Sectoral Roadmaps and Action Plans In order to have
a more pragmatic approach to the various energy plans and programs, the DOE
will implement as well as monitor the various sectoral roadmaps and action plans
that include alternative fuels, energy efficiency and conservation, resource
development, renewable energy, downstream oil, gas and coal, power and
electrification, and ICT for energy. The DOE will advocate for the passage of the
energy sector’s legislative agenda which includes among others energy efficiency
and conservation, natural gas, liquefied petroleum gas and energy projects of
national significance and review of existing laws such as EPIRA, Downstream Oil
Products and Renewable Energy. The strengths of this will include: a) Long
term benefits for the consumers in terms of lower electricity; b) Sustainable
energy in the future. The weaknesses are: a) environmental concerns.

Discuss your own view on the prospect of the industry for the next five years

In my personal view, the power industry will have a bright prospect in the next five years.
Considering the growing demand of the economy, which is expecting to grow by at least
six percent per year, the demand for electricity will surge. It is considered as a sunrise
industry as the economy continues to grow, there is a need to invest in more power
projects to meet the growing demand. Energy is also one of the main focus of the Duterte
administration as contained in the President’s Executive Order No. 5 “Ambisyon Natin
2040” which laid down the comprehensive energy master plan for the next decade to
deliver reliable and affordable electricity to sustain local economic growth.

To ensure the success of the country’s power sector and meet the growing demands of
the public, the Department of Energy is creating and updating a comprehensive energy
master plan for the next decade and a half that, if formulated and implemented properly,
will help deliver reliable and affordable electricity to sustain local economic growth. These
sectoral roadmaps were a result of the review exercises done on the effectiveness of the
current agenda and the identification of implementation gaps in the program. Each of the
roadmaps is complemented by programs of action, which are broken down into short-,
medium- and long-term targets guided by its overall objectives by 2030. To ensure that
everyone is involved, the Department of Energy has conducted a series of consultations
with various stakeholders: local government units, electric cooperatives, nongovernment
organizations, civil society organizations, academe, renewable energy developers, oil
industry players, generation companies, chamber of commerce and industries, financial
institutions and development partners, in the cities of Cagayan de Oro, Legaspi, Iloilo,
Davao, Cebu and Metro Manila, to present the plan and generate inputs for its
enhancement. Among the department issues raised in the plenary discussion during the
consultations included initiatives on low carbon future (specifically, the lowering of
greenhouse gas emissions), oil deregulation, electricity pricing, rural electrification,
renewable energy development and its policy mechanisms, measures on energy efficiency
and conservation, and other local energy concerns.

Planning the country’s energy roadmap will help safeguard our Filipino consumers and our
industry participants from any undesirable energy scenarios in the future. But with the
increasing concern on energy security due to inevitable growing demand, the energy
challenge is not just for the government alone to solve. With the help of the private and
public sectors, civil society, academe, international community and each and every one of
us as consumers, we can greatly contribute to the expansion of the country’s economic
prospects through the provision of employment opportunities and generation of
investments for the present and future Filipino generations.

Executive No. 5 Approving and Adopting the 25 year long term vision entitled
Ambisyon Natin 2040 as Guide for Development Planning
Department of Energy, Philippine Energy Plan 2012-2030
Energy Strategic Decisions 2016-2030 Freeman by Henry J. Schumacher
September 16, 2016
http://www.philstar.com/cebu-business/2016/09/16/1624214/energy-strategic-
decisions-2016-2030
http://www.investphilippines.info/arangkada/wp-content/uploads/2011/06/10.-Part-
3-Seven-Big-Winner-Sectors-Infrastructure-Power.pdf