$29bn energy investments needed till 2014 in Philippines.

THE Philippines will need P1.42 trillion ($29 billion) in investments to achieve energy self-sufficiency by 2014, says the country's energy secretary Angelo T Reyes.

Reyes says such investments are needed for the aggressive exploration and development of indigenous resources, acceleration of the implementation of the Biofuels Act to achieve mandatory mixes by 2011; infrastructure for gas, biofuels, renewable energy; and more programmes designed to improve energy efficiency. He notes that indigenous energy sources increased to 68 per cent of total power mix in the first quarter of this year from 64 per cent during the same period last year. "This is due to greater utilisation of geothermal and hydro and the indigenous gas from Malampaya and less of coal and oil," he says. Reyes cites a number of investments already in the pipeline that form part of the P1.42-trillion requirement. The country also reaped new investments such as the buy-in of ExxonMobil Corp in an existing service contract in the Sulu Sea, along with other petroleum service contracts in Cagayan, Davao, Palawan and Visayan Basins. Additional geothermal service contracts were also awarded for the areas of Compostela Valley, Biliran and Batangas which have a total potential capacity of 100 megawatts (MW). He also cites the expansion of the capacity of the wind farm in Bangui Bay in Ilocos Norte to 33 MW from 24.75 MW, and increase of annual silicon solar cell production capacity to 100 MW from 25 MW by Sunpower Philippines Manufacturing Ltd. In terms of alternative fuels, he says new investments in bio-ethanol also reached P2.9 billion in Leyte and Negros Occidental by Leyte Agri Corp and San Carlos BioEnergy, while P425 million in new investments are in the pipe-line in Tayabas, Quezon. Reyes also says his department projects electricity demand to grow 4.4 per cent annually until 2017. This will require investments to put up additional generating capacity of 3,000 MW to 4,100 MW in Luzon, 500 MW in the Visayas and 600 MW in Mindanao. To date, the country has a total of 1,028 MW of capacity nationwide, broken down as 608 MW in Luzon, 320 MW in the Visayas and 100 MW in Mindanao. "To meet these (future) power requirements, significant numbers of prospective investors expressed their interests. To date, there is a total of 4,480.5 MW of indicative additional generation capacities in the form of expansion of existing plants or putting up new plants," Reyes says. He added that aside from the interest, there are still untapped renewable energy resources: 1,200 MW of geothermal, 7,400 MW of wind power, and at least 2,284 MW of hydropower. Reyes also cites the need for $5 billion for natural gas pipeline for power and fuel. He also says that the government will continue to work on the feasibility of adopting nuclear power for power supply security and cost competitiveness. Citing the importance of closer coordination between government and the private sector in meeting future requirements, Reyes says: "We recognise that the multistakeholders dialogue which we have institutionalised in the sector is an effective means to resolve issues...without support from the private sector, all our plans and programmes will not be attained." The Philippines has been leading the region in the development of alternate and indigenous sources of energy since 1971. Its early development of geothermal energy has resulted in meeting 17 per cent of its energy needs through that alone making the Philippines the world's second largest producer of geothermal energy. It has also led the way in the development of hydropower, solar power and wind power. The largest solar plant in Southeast Asia is located in Cagayan de Oro. At the last Asean ministerial meeting, the Philippines asked Asean ministers to prioritise the development of renewable energy sources, to counteract the high price of imported oil. Secretary Reyes hopes to see 60 per cent self-sufficiency in energy by 2010. The Department of Energy (DoE) has 20 more geothermal sites identified in 13 regions, to be developed and 10 large hydropower projects. It also has marked out 23 sites for the development of wind power and there are said to be 1,000 such sites. Sunpower Philippines is expanding production of solar power and the government recently announced that additional oil exploration contracts have been awarded to an Australian-British partnership to further develop the oil reserves in Palawan. In Metro Manila, the DoE launched the "Switch" programme, which has resulted in 16 cities switching from incandescent light bulbs to fluorescent lighting which lasts five times as long as incandescent bulbs, and DoE estimates that if the 68 million incandescent bulbs still in use in the Philippines were replaced by fluorescent lighting, the savings would amount to $300 million in imported oil. The Philippines was the first country in this region to have a biofuels law which requires a 5 per cent blend of ethanol by 2009. A variety of energy sources are available for development. But unfortunately they are too expensive for the government to do the job alone. "Without support from the private sector," secretary Reyes explained at an economic briefing "our programme will not be attained." A number of companies are already investing, including Sunpower, the Leyte Agriculture Corporation, and San Carlos BioEnergy. Vicente Perez Jr, who was secretary of energy from 2001 to 2005, is now managing director of Alterenergy Partners, a company he founded that develops renewable energy sources, which he believes have growing importance in the emerging economies of Asia. The leading manufacturer of silicone solar cells in China, Shi Zhengrong, predicted that renewable clean power -- wind, solar, biofuels -- will be the growth industry of the 21st century. Shi is the seventh richest man in China today, and listed in Forbes magazine among the world's wealthiest. Since initial costs of most renewable energy sources are expensive up front, many investors and governments shy off their development. But as newer technologies are developed, which are bringing down costs, developers are prospering. In the US, the administration has shown little interest in a clear energy policy, except to encourage offshore drilling of oil. The development of wind and solar power is being done by private investors on a local basis. The timely oil find in the country's Galoc fields off the northwest tip of Palawan island last month was immediately announced by president Gloria Macapagal-Arroyo's spokesman, executive secretary Eduardo Ermita: The president is optimistic that this new development will positively impact on the administration's efforts to reduce the country's annual oil importation of US billion and, in turn, will also contain the increasing cost of food and other commodities. The president, a staunch advocate of alternative energy, herself enthused about the Galoc oil find in her speech before a forum attended by foreign investors. On energy independence, it's auspicious that we have this meeting because our new Galoc oil field started pumping oil to what we believe will redouble our crude oil production in our country. This is part of what we have done to increase energy independence during our administration from 41 per cent to 58 per cent -- the highest in our history -- through the greater use not only of oil exploration but of geothermal, biofuels and renewables, Macapagal-Arroyo says. The Galoc oil field's volume of extract confirms early production targets of 17,000 to 20,000 barrels of oil per day (bpd) in the first 90 days of operation. This will account for about six per cent of daily local demand of 300,000 bpd, Malacanang adds.

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