WEEK 8

ENERGY (FOSSIL FUELS AND RENEWABLE ENERGY)

OBJECTIVES

1. Understand the energy distribution and consumption in the Philippines.

2. Study the electrical energy demands based on Philippine population and economic
growth.

3. Identify the cause and effect of using renewable and non-renewable energy source.

4. Understand various government policies/laws with regards to the environment,

energy, and natural resource.

ENERGY IN THE PHILIPPINES

The total primary energy consumption of the Philippines in 2012 was 30.2 Mtoe
(million Tons of oil equivalent), most of which came from fossil fuels. Electricity
consumption in 2010 was 64.52 TWh, of which almost two-thirds came from fossil fuels,
21% from hydroelectric plants, and 13% from other renewable sources. The total
generating capacity was 16.36 GW.

The Philippines is an emerging economy and its economy has greatly shifted from
agriculture to industry. In terms of energy use, conventional fossil fuels (oil and gas) are
the main source for its primary energy demands.

According to the 2011 primary energy consumption of the Philippines,

• 31% of the consumption was met by oil,

• 20% by coal, 22% by geothermal,

• 12% by biomass, 6% by hydro and

• 1% by other renewable energy like wind, solar and biofuel.

The Philippines is located in the Pacific Ring of Fire and thus has a high geothermal
potential. In terms of electricity generation,

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 • 41.4% of the electricity demand is met by geothermal energy

• 28% by coal,

• 11.4% by hydro,

• 15% by natural gas and

• 0.1% by wind, solar and biofuel.

In terms of installed capacity for power generation

• 63.2%, is Hydro,

• 35.1% is geothermal,

• 1.1% is biomass and

• 0.6% by wind and 0.1% solar.

The population of the Philippines is over 101 million people, and as a rapidly developing
nation, has seen a rapid increase in GDP, averaging 6.1% from 2011 to 2015. Energy-
intensive manufacturing and retail industries are the driving factors of the Philippines'
economic growth. Given its large population and rapidly growing economy, the country's
energy needs are significant and growing rapidly.

According to the Philippines Department of Energy, the Philippines consumed 75,266

gigawatt-hours (GWh) of electricity in 2013. Of this,

• 27.39% went to powering residential areas,

• 24.31% to commercial establishments and

• 27.46% to the industrial sector.

With 72.84% of electrical energy being consumed by Luzon, 14.75% by Visayas, and
12.41% by Mindanao in 2013.

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ELECTRICITY

The Philippines’ demand for electrical energy in 2013 represents a 42.17% increase
from 2012, when the demand for energy was at 52,941 GWh. It is expected that the
country’s demand for power will increase as the Philippines’ population and economy
continue to grow.

The Philippines’ current energy mix highly favors fossil fuels, with coal, natural gas,
and oil, accounting for 73.56% of the country's total electrical energy needs, primarily due
to their low cost.

The Philippines's most heavily used energy source is coal. Of the country’s 75,266
GWh electrical energy demand in 2013, 32,081 GWh or approximately 42.62% was
sourced from coal. This heavy dependence on coal is further apparent by the high number
of coal-fired power plants in the country. As of March 2016, there were 32 coal-fired power
generation facilities connected to the energy grid. These facilities are spread throughout
the country, although most of them are in Luzon and Visayas. The number of coal-fired
power plants in the country is set to increase by 25 by the year 2030 to keep up with the
Philippines’ growing energy demands.

Besides coal, the Philippines is also heavily dependent on natural gas. The
Philippines produced 18,791 GWh of electricity from natural gas in 2013. This
corresponded to 24.97% of the Philippines’ electrical energy needs during this period. As
of March 2016, there were a total of 13 natural gas generation facilities connected to the
energy grid, 12 of which are in Luzon and one of which is in Cebu on Visayas.

The Philippines also generates a significant amount of electrical energy from oil,
albeit to a lesser degree than compared to coal and natural gas. In 2013, the Philippines
sourced 5.97% of its energy from oil-based sources. As of March 2016, there were a total
of 212 gas and diesel-powered facilities in the Philippines. The large number of oil-powered
power plants is a result of a lower per plant output compared to coal and natural gas. Oil-

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powered power plants can be found dispersed across several provinces in Luzon, Visayas,
and Mindanao.

RENEWABLE ENERGY

In 2013, renewable energy provided 26.44% of the total electricity in

the Philippines and 19,903 gigawatt-hours (GWh) of electrical energy out of a total demand
of 75,266 gigawatt-hours. The Philippines is a net importer of fossil fuels. For the sake of
energy security, there is momentum to develop renewable energy sources.

The types available include:

• Hydropower

• Geothermal Power

• Wind Power

• Solar Power

• Biomass Power.

The government of the Philippines has legislated a number of policies in order to

increase the use of renewable energy by the country.

The government has committed to raising to 50% the contribution of renewables of its
total electricity generating capacity, with 15.3 gigawatts (GW) by 2030. The move would
help the country in its commitment to reduce its carbon emissions by 70% by 2030.

BACKGROUND

There is momentum to decrease reliance on fossil fuels due to the negative effects
such as pollution, climate change and financial uncertainty because of fluctuating fuel
prices. Legislation passed by the Congress of the Philippines to support the use of
renewable energy include the Electric Power Industry Reform Act (2001); the Biofuels Act
(2006), which encourages the use of biomass fuels; the Renewable Energy Act (2008); and
the Climate Change Act (2009), which provides a legal basis for addressing climate change
through sustainable development.

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 Renewable energy implementation is important to the Philippines for several
reasons. The geographic characteristics of the country make it vulnerable to the adverse
effects of climate change. Rising sea levels are a threat because the Philippines is
an archipelago with many cities located in coastal areas. As the coastline recedes due to
rising seas, coastal cities become vulnerable to flooding. Climate change has also been
linked to changing weather patterns and extreme weather events.

Reliance on fossil fuels is detrimental to the energy security of the Philippines. The
Philippines is a net importer of fossil fuels. In 2012, the Philippines imported 20 million tons
of coal. Eight million tons were produced domestically. In 2010, the Philippines imported
54 million barrels of oil and produced 33,000 barrels. Given this dependence on imported
coal and oil, the Philippines is vulnerable to price fluctuations and supply constraints.

The Philippine Department of Energy wrote:

“The harnessing and utilization of renewable energy comprises a critical component of the
government's strategy to provide energy supply for the country. This is evident in the power
sector where increased generation from geothermal and hydro resources has lessened the
country's dependency on imported and polluting fuels. In the government's rural
electrification efforts, on the other hand, renewable energy sources such as solar, micro-
hydro, wind and biomass resources are seeing wide-scale use.”

SOURCES

The Philippines utilizes renewable energy sources including hydropower, geothermal and
solar energy, wind power and biomass resources. In 2013, these sources contributed
19,903 GWh of electrical energy, representing 26.44 percent of the country's energy needs.

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Renewable electricity production (GWh) by source.

ELECTRICITY SITUATION
The table below provides an overview of the electricity tariffs in Philippines

SOURCE: NATIONAL POWER CORPORATION

NOTE: THE CONVERTION RATE FROM PHP TO USD IS 0.0245 (AS OF MARCH 2013)

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POLICY

The Government of Philippines has introduced various

policies to foster renewable energy. Some of the policies
are income tax holiday up to 7 years, duty-free import of
equipment for renewable energy technologies and so on.
In 2012, the government launched the new feed-in tariff
(FIT) and is summarized in the table

SOURCE: ERC 2012

NOTE: THE CONVERTION RATE FROM PHP TO USD IS 0.0245 (AS OF MARCH 2013)

USAGE OF RENEWABLE ENERGY

Renewable energies include wind, solar, biomass and geothermal energy sources. This
means all energy sources that renew themselves within a short time or are permanently
available. Energy from hydropower is only partly a renewable energy. This is certainly the
case with river or tidal power plants. Otherwise, numerous dams or reservoirs also
produce mixed forms, e.g. by pumping water into their reservoirs at night and recovering
energy from them during the day when there is an increased demand for electricity. Since
it is not possible to clearly determine the amount of generated energy, all energies from
hydropower are displayed separately.

In 2015, renewable energies accounted for around 27.5 percent of actual total
consumption in the Philippines. The following chart shows the percentage share from
1990 to 2015:

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ACTIVITY: ENERGY (FOSSIL FUELS AND RENEWABLE ENERGY)

Choose one renewable energy that will provide the best sustainable solution for the
Philippines. Site an example of a renewable energy project implemented in our country.

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MODULE 5 – 8 SOURCES:

• https://www.suffolkwildlifetrust.org/conservationadvice/meadows-and-
grassland/grassland-and-scrub
• http://grasslandsbiome3.weebly.com/human-impact.html
• https://www.thoughtco.com/overview-of-the-grassland-biome-130169
• https://www.un.org/sustainabledevelopment/wp-content/uploads/2017/05/Ocean-
fact-sheet-package.pdf
• https://courses.lumenlearning.com/earthscience/chapter/oceans-and-coastal-
environments/
• https://earth.esa.int/web/guest/earth-topics/oceans-and-coasts
• https://www.nap.edu/read/12782/chapter/5
• https://health2016.globalchange.gov/climate-change-and-human-health
• https://www.climatelinks.org/resources/climate-change-risk-profile-philippines
ADB. 2009. The Economics of Climate Change in Southeast Asia: A Regional
Review.
• CIA World Factbook. 2016. Country Profile.
• IFPRI. 2015. Agricultural Growth and Climate Resilience in the Philippines.
• Cinco, T. et. al. 2013. Climate Trends and Projections in the Philippines.
• Department of Health, Republic of the Philippines. 2012. National Objectives for
Health 2011–2016. FAO. 2011. Implications of climate change on fisheries and
aquaculture.
• FAO. 2011. Aquastat Country Profile: Philippines.
• FAO. 2014. Fishery and Aquaculture Country Profile.
• Kahana, R. et. al. 2016. Projections of sea level change.
• Rincon, M. et. al. 2008. Climate Change in the Philippines.
• UNFCCC. 2014. Second National Communication.
• USAID. 2012. Philippines Climate Variability Profile.
• USAID. 2014. Typhoon Yolande Factsheet #22.
• World Bank. 2004. Philippines Environment Monitor.
• World Bank. 2016. Data Country Profile.

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 • World Bank. 2011. Vulnerability, Risk Reduction, and Adaptation to Climate
Change: Philippines. World Bank. 2013. Turn Down the Heat: Climate Extremes,
Regional Impacts, and the Case for Resilience.
• WHO. 2015. Eliminating Malaria.
• WHO. 2016. Dengue Factsheet. Map Source: Adapted from Center for
Environmental Geomatics - Manila Observatory. 2005.
• https://www.amnesty.org/en/what-we-do/climate-change/
• https://en.wikipedia.org/wiki/Energy_in_the_Philippines
• https://energypedia.info/wiki/Philippines_Energy_Situation
• https://www.globallegalinsights.com/practice-areas/energy-laws-and-
regulations/philippines

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