=== pep-2023-2050-vol1-section-d-page-081.pdf === transitioning the sector to the fourth Industrial Revolution (Industry 4.0), which utilizes the Internet of Things (IoT), AI, cloud computing, and digital platforms in key manufacturing industries such that by the end of the planning period, it accounts for 53.6 percent of the sector’s total energy requirement. Amidst the momentum for the utilization of clean fuels, coal and oil still play a significant role in the sector with 21.9 percent and 17.8 percent shares by 2050, respectively, to the industry’s TFEC. As these fuels heat-up boilers in the production and processing of various manufacturing industries, demand for coal and oil accelerates moderately at 4.3 percent and 3.6 percent per year, respectively, between 2022 and 2050 (Table 11). Table 11. Industry Final Energy Consumption, By Fuel (MTOE) Fuel Type 2022 2030 2040 2050 2022-2050 Levels % Shares Levels % Shares Levels % Shares Levels % Shares AAGR (%) * Avg. %Shares Oil Products 1.8 25.67 2.68 24.98 3.82 21.30 4.89 17.84 3.59 22.51 LPG 0.2 2.85 0.41 3.86 0.77 4.30 1.20 4.36 6.55 4.01 Kerosene 0.0 0.16 0.02 0.22 0.03 0.18 0.04 0.14 4.47 0.19 Diesel 1.2 16.88 1.69 15.74 2.29 12.77 2.84 10.33 3.12 13.89 Fuel Oil 0.4 5.78 0.55 5.14 0.73 4.05 0.82 3.00 2.52 4.42 Coal 1.8 26.11 2.69 25.10 4.27 23.79 6.02 21.93 4.29 24.13 Biodiesel 0.0 0.33 0.03 0.31 0.05 0.25 0.06 0.20 3.12 4.13 Electricity 2.4 34.90 4.31 40.23 8.43 46.97 14.72 53.64 6.57 44.39 Biomass 0.9 13.00 1.00 9.38 1.38 7.69 1.75 6.39 2.31 4.39 Total 7.1 100 10.71 100 17.95 100 27.44 100 4.94 100 *Average annual growth rates (AAGR) Figure 46. Industry Final Energy Consumption by Cement manufacturing accounts for the bulk of coal Sub-Sector Shares (%): 2050 consumption in response to the robust demand for Machinery & building materials as priority projects under various Equipment 10.6% Basic Metal infrastructure development plans materialize across the 10.8% Paper & planning horizon (Figure 46). Diesel is the most consumed Printing 6.4% Chemical oil product and contributes 10.3 percent share to the 5.3% industry’s TFEC by 2050. Its demand level increases at a yearly rate of 3.1 percent to 2.8 MTOE by the end of the Non-Energy Intensive planning period owing to its use as fuel in machinery 19.3% and equipment. On the other hand, the demand for LPG, Energy Intensive fuel oil, and kerosene are also on an uptrend with annual Total Demand: 80.7% 27.4 MTOE Food increments of 6.6 percent, 2.5 percent, and 4.5 percent Processing Cement 35.0% respectively. Biodiesel demand grows parallel to diesel 12.6% in compliance with the mandated blending rate and registers a 3.1 percent hike per year between 2022 and 2050. The requirement for biomass64 as fuel primarily for food processing and sugar manufacturing doubles to 1.8 MTOE by 2050 from its 2022 level of 0.9 MTOE. Services. The services sector continues to be the backbone and main driver of economic growth. Conscious of this vital role, the sector’s transition into a modern, productive, and resilient sector providing higher value-added and differentiated services requires harnessing the potential of the Philippines creative industries, information technology, and business process management sectors as key players in global value chains. These robust growth prospects drive the 4.0 percent acceleration in the sector’s aggregate energy demand as levels reach 13.2 MTOE by 2050 (Figure 47). 64 Arthaland Century Pacific Tower is among the most highly soughtafter global business addresses in BGC. It is a LEED Platinum and BERDE 5-star certified building (the highest categories in both green building rating standards), on track for WELL v2 certification, and stands as the world's first EDGE Zero Carbon certified project (Source: Arthaland Properties website) Includes charcoal, fuelwood, rice hull, bagasse, agriculture, and animal waste. Vo l u m e 1 72 === pep-2023-2050-vol1-section-d-page-082.pdf === Electricity supports majority of the sector’s energy requirement across the planning timeline. Technological innovations drive the growing demand for smart buildings and workspaces with digital tools for seamless collaboration and data-driven decisions, including cutting-edge facilities and equipment for efficient performance of service establishments. As such, demand for electricity ramps up by 5.1 percent and reaches 8.5 MTOE by 2050 vis-à-vis 2.1 MTOE in 2022 and results in an additional 17.5 percentage points in its share of the sector’s energy demand mix (Table 12). Table 12. Services Final Energy Consumption, By Fuel (MTOE) Fuel Type 2022 2030 2040 2050 2022-2050 Levels % Shares Levels % Shares Levels % Shares Levels % Shares AAGR (%) * Avg. %Shares Oil Products 2.00 45.04 2.61 42.10 3.37 36.69 4.28 32.56 2.75 38.98 LPG 0.51 11.55 0.98 15.73 1.75 19.07 2.76 20.96 6.18 17.33 Diesel 1.32 29.60 1.42 22.90 1.36 14.77 1.23 9.35 -0.24 18.57 Fuel Oil 0.17 3.89 0.22 3.47 0.26 2.84 0.29 2.24 1.92 3.08 Biodiesel 0.03 0.58 0.03 0.45 0.03 0.29 0.02 0.18 -0.24 0.37 Electricity 2.09 46.93 3.22 51.81 5.43 59.03 8.47 64.39 5.13 55.88 Biomass 0.33 7.45 0.35 5.64 0.37 3.99 0.38 2.87 0.46 4.77 Total 4.45 100 6.21 100 9.19 100 13.16 100 3.95 100 *Average annual growth rates (AAGR) Figure 47. Services Final Energy Consumption by Fuel (MTOE): 2000-2050 Aggregate consumption of oil rises steadily at 2.8 percent per year to 4.3 MTOE by 2050 and accounts for about a third (32.6 percent) of the demand mix for the same year. With an increasing number of service establishments adopt solar PV systems as a clean and sustainable energy source for back-up power, diesel loses its viability as fuel for generators and declines at an annual rate of 0.2 percent across theplanning horizon. Maintaining a 2.0 percent blending schedule for biodiesel results in consumption level that is also on a downtrend as it drops to 24 kTOE in 2050. On the other hand, LPG use, particularly among food services establishments and other similar businesses, speeds up by 6.2 percent between 2022 and 2050, while fuel oil grows modestly by 1.9 percent during the same period. Biomass completes the sector’s demand mix with 378 kTOE consumption in 2050. Agriculture. The agriculture sector has a critical role in economic growth and development since ensuring food security and ending hunger are key goals towards societal transformation, while its modernization is an essential condition in achieving the country’s industrialization goals. Conscious of these needs, the government has set forth a National Agricultural and Fisheries Modernization and Industrialization Plan (NAFMIP) as a directional plan that steers sector-wide growth and guides the trajectory of more detailed and operations-oriented and technology-driven agri-fishery development plans such as the Commodity System 64 73 Includes charcoal, fuelwood, rice hull, bagasse, agriculture, and animal waste. Philippine Energy Plan (top) Factory equipment for battery production and (bottom) software for energy management are among the technologies envisioned under the industry 4.0. (Source: Bosch Media Service) === pep-2023-2050-vol1-section-d-page-083.pdf === Roadmaps, Provincial Commodity Investment Plans (PCIPs), and Comprehensive Land Use Plans (CLUP).65 These transformational initiatives propel the 4.5 percent increase in the agriculture sector’s total energy consumption to 1.3 MTOE by 2050 – more than three (3) times its 2022 level of 0.4 MTOE (Figure 48). Table 13. Agriculture Final Energy Consumption, By Fuel (kTOE) 2022 Fuel Type Oil Products Kerosene 2030 2040 2050 2022-2050 Levels % Shares Levels % Shares Levels % Shares Levels % Shares AAGR (%) * Avg. %Shares 139.26 36.81 215.96 42.69 362.93 40.87 499.47 38.28 4.67 41.19 0.14 0.04 0.01 0.00 ** *** ** *** -40.22 *** Diesel 120.61 31.88 192.83 38.12 323.42 36.42 438.27 33.59 4.72 36.64 Gasoline 17.45 4.61 22.75 4.50 39.08 4.40 60.71 4.65 4.55 4.47 Fuel Oil 1.05 0.28 0.37 0.07 0.43 0.05 0.50 0.04 -2.65 0.07 Biodiesel 2.38 0.63 3.80 0.75 6.38 0.72 8.65 0.66 4.72 0.72 Electricity 236.69 62.56 286.13 56.56 518.73 58.41 796.67 61.06 4.43 58.09 Total 378.33 100 505.90 100 888.04 100 1,304.78 100 4.52 100 *Average annual growth rates (AAGR), **values less than 0.01 kTOE, ***shares less than 0.01 percent Upgrades in agricultural production and activities from being resource-based to technology-based drive the growth in the sector’s energy requirement. Electricity expands at an annual rate of 4.4 percent to 0.8 MTOE in 2050, while diesel rises slightly faster at 4.7 percent per year and reaches 0.4 MTOE by the end of the planning horizon (Table 13). The realization of the Philippine Figure 48. Agriculture Final Energy Consumption by Center for Postharvest Development Fuel (MTOE): 2000-2050 and Mechanization (PHilMech) target of achieving a level of at least four horsepower (hp) per hectare (ha)66 and the adoption of smart farming technologies push the aggregate share of electricity and diesel to 94.7 percent of the agriculture sector’s energy requirement in 2050. Gasoline and other oil products complete the range of fuels for the production, harvesting, and other agriculture-related processes. Utilization of gasoline, specifically in the fishery sub-sector, exhibits an upward trend towards 61 kTOE by 2050 and offsets the reductions in fuel oil (2.7 percent) and kerosene (40.2 percent) compared to their 2022 levels. B. TOTAL PRIMARY ENERGY SUPPLY The level of TPES under the Reference Scenario reaches 140.5 MTOE in 2050 from 61.6 MTOE in 2022. It exhibits an annual growth rate of 3.0 percent from 2022 to 2050 (Table 14). 65 66 BFAR. (2023, June 23). National Agriculture and Fisheries Modernization and Industrialization Plan 2021-2030. Retrieved September 19, 2023, from https://www.bfar. da.gov.ph/wp-content/uploads/2022/08/06232022_NAFMIP-2021-2030.pdf Why today’s farmers need to mechanize. (n.d.). Philippine Center for Postharvest Development and Mechanization. Retrieved September 23,2023, from https://www. philmech.gov.ph/?page=story_full_view&action=story_fullview&recordID=202282484053AMa6f3cd&recordCategory=RCEF#gsc.tab=0 Vo l u m e 1 74 === pep-2023-2050-vol1-section-d-page-084.pdf === Table 14. Total Primary Energy Supply, By Fuel (MTOE) Fuel Type 2022 2030 2040 2050 AAGR (%) * Levels % Shares Levels % Shares Levels % Shares Levels % Shares Coal 19.08 30.99 22.63 28.40 22.43 20.83 22.28 15.86 0.56 Natural Gas 2.61 4.24 4.92 6.18 10.83 10.06 24.82 17.67 8.37 Oil-based 19.83 32.22 25.58 32.10 34.50 32.05 43.50 30.96 2.84 Renewable 20.04 32.55 26.56 33.33 39.89 37.06 49.89 35.51 3.31 Geothermal 8.96 14.56 12.36 15.51 16.23 15.08 18.30 13.03 2.58 Hydro 2.51 4.08 2.70 3.39 6.65 6.18 10.59 7.54 5.27 Wind 0.09 0.14 1.34 1.69 4.21 3.91 7.98 5.68 17.44 Solar 0.16 0.25 1.54 1.94 4.30 3.99 6.34 4.51 14.13 Biomass 7.73 12.56 7.88 9.89 7.56 7.02 5.60 3.98 -1.15 0.59 0.95 0.73 0.91 0.94 0.87 1.09 0.78 2.24 61.56 100 79.69 100 107.65 100 140.50 100 2.99 Biofuels Total Self-Sufficiency (%) 49.4 49.5 41.6 2022-2050 38.9 *Average annual growth rates Oil remains the country’s main energy source, albeit with a slightly lower share of the energy mix in 2050 at 31.0 percent vis-à-vis 32.2 percent share in 2022. The bulk of oil supply supports the steady demand for oil and oil products, particularly from the transport sector. Coal supply expands slowly by 0.6 percent as its utilization for power generation diminishes across the planning period because of decarbonization targets. LNG imports augment natural gas supply and result in an 8.4 percent increase in levels between 2022 and 2050. The transition towards cleaner fuels, especially in power generation, sustains the 3.3 percent expansion in aggregate RE supply. Wind and solar post double-digit growths of 17.4 percent and 14.1 percent, respectively, while geothermal and hydro also add up to the increase in RE shares from 32.6 percent in 2022 to 35.5 percent by the end of the planning period. On the other hand, biomass supply contracts by 1.2 percent as demand for clean fuel for cooking improves, particularly in the household sector. Energy Supply for Power Application. Total supply requirement for power generation, i.e., fuel input, grows at an average rate of 3.5 percent from 32.7 MTOE in 2022 to 85.0 MTOE in 2050. Combined RE sources constitutes the bulk (51.3 percent share) of the fuel input mix in 2050 as it increases yearly by 4.6 percent. Natural gas accounts for more than a quarter (29.2 percent) of the 2050 fuel input mix and accelerates by 8.5 percent across the planning horizon (Figure 49). Given the shift towards low-carbon energy resources, coal supply for power generation contracts yearly by 0.2 percent and loses 33.3 percentage points in its share to the fuel input mix between 2022 (52.4 percent) and 2050 (19.0 percent). Oil remains the least contributor to fuel input with 0.4 percent share, while its levels decline by 3.0 percent towards the end of the planning period as energy storage systems (ESS) are more favored to maximize the electricity supplied by RE. Figure 49. 2050 Energy Supply for Power and NonPower Applications: By Fuel Shares (%) Note: Biomass for non-power includes biofuels Energy Supply for Non-Power Application. Close to two-fifths (39.5 percent) of the TPES in 2050 provides for the country’s non-power requirements. Oil accounts for 77.7 percent of the total energy supply for non-power applications, while both coal and biomass (including biofuels) contribute around 11.0 percent share. 75 Philippine Energy Plan === pep-2023-2050-vol1-section-d-page-085.pdf === Indigenous Supply The country’s indigenous energy supply exhibits yearly increments of 2.1 percent and reaches 54.7 MTOE in 2050, from 30.4 MTOE in 2022 (Figure 50). Total RE production more than doubled to 49.4 MTOE between 2022 and 2050 and constitutes 90.3 percent of domestic energy production in 2050. • Fossil Fuels Domestic oil supply level grows slowly by 0.5 percent across the planning horizon. With the increasing supply volume of renewables, oil contributes a small share of 0.8 percent to total indigenous energy in 2050. Other potential crude oil areas in addition to Galoc and Alegria oil fields sustain domestic oil production at 2.3 MMB per year between 2022 and 2050. Indigenous coal contributes a diminished 8.0 percent share to total domestic energy production in 2050 visà-vis 25.1 percent in 2022. Domestic coal production level drops to 4.4 MTOE in 2050 compared to 7.6 MTOE in 2022 with yearly contractions of 2.0 percent. Despite the downtrend, local coal targets a yearly production output of 6.5 MMT and continues to provide for the coal requirement of some power plants, as well as in the cement and basic metal subsectors. Figure 50. Total Indigenous Energy Supply, by Fuel (MTOE), 2010-2050 With declining reserves of the Malampaya gas fields, natural gas share to indigenous supply stands at 1.0 percent in 2050, as levels post a 5.3 percent annual rate of reduction to 0.6 MTOE in 2050 in comparison to 2.6 MTOE in 2022. The government is keen to explore other potential natural gas fields consistent with the target production level of 0.2 TCF/year. • Renewable Energy Geothermal energy level doubles to 18.3 MTOE by 2050 from 9.0 MTOE in 2022. It maintains its pivotal role as a major RE resource with steady increments of 2.6 percent across the planning horizon. With an additional capacity of 1.4 GW by 2050, geothermal continues to augment the country’s electricity needs. The DOE leads in the “Geothermal De-risking Roadmap for the Philippines” that seeks to identify, evaluate, and recommend pre-development stage derisking strategies in assessing and prioritizing policies and regulations that can increase geothermal development in the country.67 By 2050, hydro supply level rises more than four times to 10.6 MTOE from 2022 level of 2.5 MTOE and provides reliable source of electricity and as an ESS through pump storage technology. With 10.3 GW of additional capacities coming online across the planning horizon, hydro supply registers a 5.3 percent expansion and an improved share of 19.4 percent to total indigenous production by 2050. 50% RE shares by 2040 and onwards sustains energy security, with lesser reliance on imported fuels. Solar and wind assume their new roles as significant drivers of the country’s energy transition throughout the planning horizon. Solar production output soars at 14.1 percent per year as levels increase from 0.2 MTOE in 2022 to 6.3 MTOE. Mainstreaming of solar technology propels the 11.0 percentage points increase in its share of total domestic energy production by 2050. The country’s solar power industry attracts massive investment interest that pushes total installed capacity to 56.5 TW by the end of the planning period vis-a-vis 1.5 TW of capacity in 2022. Wind energy takes a double-digit growth of 17.4 percent yearly as its supply reaches 8.0 MTOE by 2050. Effectiveness of landmark policies on offshore wind (OSW) shows in the remarkable increase in wind capacity of more than 30 GW between 2022 and 2050. 67 With technical assistance from the Asian Development Bank (ADB) Vo l u m e 1 76 === pep-2023-2050-vol1-section-d-page-086.pdf === Consistent with the shift towards modern and clean fuels, traditional biomass68 supply suffers yearly declines of 1.1 percent, while its share of total domestic energy production in 2050 drops by more than half to 10.2 percent vis-à-vis 25.4 percent share in 2022. The downtrend stems from its reduced utilization among end-use sectors, particularly households. Of the 5.6 MTOE biomass supply levels in 2050, 0.4 MTOE serves as fuel input to power generation for the 92 MW additional capacities to come online across the planning period. Domestic production of biofuels stands at 0.6 MTOE in 2050 and completes the total indigenous energy mix with a share of 1.0 percent. In response to maintaining the current blending schedule for both bioethanol and biodiesel, total biofuel supply moves slowly at 0.1 percent between 2022 and 2050. Net Energy Imports Net energy imports register yearly gains of 3.7 percent, as levels rise to 85.8 MTOE by 2050 vis-à-vis 31.1 MTOE in 2022. It accounts for 61.1 percent of the country’s TPES by the end of the planning period. Figure 51. Net Energy Imports, By Fuel (MTOE), 2020-2050 Net oil imports lead with an average share of 57.3 percent between 2022 and 2050 (Figure 51). To meet the robust demand for non-power uses, net oil imports rise at an annual rate of 2.9 percent to 43.1 MTOE, or more than double the 2022 level of 19.5 MTOE. Coal’s sustained utilization in various industrial processes propels the 1.6 percent steady increase in its net import volume towards 17.9 MTOE by 2050. Despite the reduction in coal requirement for power generation, it remains a significant energy source and contributes an average share of 27.1 percent to net energy imports across the planning horizon. LNG imports augment the country’s demand for natural gas and compensate for the declining domestic output Commercial operation of the seven (7) LNG projects between from Malampaya and other gas fields vis-à-vis its increased 2022 and 2050 provides the utilization as a transition fuel for power generation. As needed infrastructure for LNG such, LNG imports accelerate by 8.3 percent per year, imports. while levels leap from zero volume in 2022 to 24.3 MTOE by 2050. The country expects to fully operate seven (7) LNG projects (storage and receiving facilities, import terminals, and regasification facilities across the planning period with total capacities of around 22 MTPA. Maintaining the 10.0 percent bioethanol blend across the planning period drives the volume of ethanol imports to 0.5 MTOE by 2050 from 0.2 MTOE in 2022. It contributes an average share of 0.7 percent to net energy import mix over the planning period. C. POWER DEMAND AND SUPPLY Electricity Sales Total electricity sales expand more than four times its 2022 level of 91.3 terawatt-hours (TWh) at an annual rate of 5.5 percent to 408.1 TWh by 2050. As the bulk of economic activities remain concentrated in the Luzon grid, it consistently contributes the largest share (more than 70.0 percent) of total electricity sales between 2022 and 2050. 68 77 Includes charcoal, fuelwood, rice hull, bagasse, agriculture, municipal and animal waste. Philippine Energy Plan === pep-2023-2050-vol1-section-d-page-087.pdf === Peak Demand With the uptrend in electricity sales, total peak demand increases more than three times its 2022 level of 16.6 gigawatts (GW) to 68.5 GW by 2050, which corresponds to an annual average growth rate of 5.2 percent (Table 15). With its robust regional growth prospects, the Visayas grid outpaces the other two grids with a 5.6 percent expansion in peak demand, while the Luzon grid accounts for bulk of the country’s total peak demand at an average share of 70.0 percent across the planning horizon. Table 15. Peak Demand and Electricity Sales Luzon Year Peak Demand (MW) Visayas Electricity Sales (GWh) Peak Demand (MW) Mindanao Electricity Sales (GWh) Peak Demand (MW) Philippines Electricity Sales (GWh) Peak Demand (MW) Electricity Sales (GWh) 2022 12,113 67,536 2,316 11,866 2,167 11,931 16,596 91,333 2028 16,149 90,901 3,280 17,085 3,153 16,811 22,582 124,797 2030 18,038 101,777 3,753 19,710 3,585 18,973 25,376 140,459 2040 29,984 177,810 6,634 37,729 6,140 33,647 42,758 249,186 2050 48,014 290,557 10,678 63,260 9,791 54,240 68,483 408,057 5.04 5.35 5.61 6.16 5.53 5.56 5.19 5.49 AAGR (%)* *Average annual growth rates for 2022-2050; sales exclude system’s losses and own use Total Gross Generation Figure 52. Gross Generation Output by Fuel (TWh), 2000-2050 The total gross generation accelerates at an annual rate of 5.1 percent and rises to 453.8 TWh from its 2022 level of 111.5 TWh (Figure 52 and Table 16) to meet the demand requirements. Aggressive promotion of RE technologies, particularly solar and wind, as means to achieve the target RE shares of 35.0 percent by 2030 and 50.0 percent by 2040 onwards result in heightened RE contributions of 59.6 TWh in 2030, 144.8 TWh in 2040 and 230.2 TWh in 2050. Milestone policies and strategies, such as the sustained implementation of the coal moratorium and utilization of LNG as a transition fuel, also contribute to the significant shift in the country’s power generation mix. Full commercial operation of the seven LNG projects likewise ensures sufficient supply for the country’s power generation requirements. Solar and wind generation output levels register the fastest increase with double-digit average growths of 17.4 percent and 14.1 percent, respectively. Solar generation output expands from 18.0 TWh in 2030 to 73.7 TWh by 2050, while aggregate generation from onshore and offshore wind ramps up to 92.8 TWh by 2050 compared to 15 TWh in 2030. RE and natural gas drives energy transition in the power generation with their combined aggregate share of more than 80% in the generation mix by 2050 Energy transition in the power generation sector takes place as coal generation output drops at a yearly rate of 0.1 percent, while both total RE and natural gas generation outputs expand by more than 8.0 percent between 2022 and 2050. Coal registers a sizeable decline in its share in the generation mix - from 59.6 percent share (66.4 TWh) in 2022 to 14.1 percent share (63.8 TWh) in 2050. With committed coal-fired power plants (CFPPs) still in the pipeline until 2030, coal’s share to power mix stands at 49.5 percent (78.2 TWh) but declines further to 24.9 percent (71.2 TWh) by 2040. Vo l u m e 1 78 === pep-2023-2050-vol1-section-d-page-088.pdf === The RE targets centered on variable RE or VRE such as solar and wind, provide an opportunity for ESS to support the grid stability due to intermittent supply. Starting in 2030, the grid requires 65 GWh from BESS and expands to 466 GWh by 2040 and 1,021 GWh by 2050. Table 16. Gross Generation Output, By Fuel (TWh) 2022 Fuel Type 2030 2040 2050 AAGR* (%) Levels % Shares Levels % Shares Levels % Shares Levels % Shares Coal 66.43 59.57 78.18 45.90 71.17 24.86 63.77 14.05 2022-2050 Natural Gas 17.88 16.04 31.48 18.48 69.26 24.19 158.76 34.98 8.11 Oil-based 2.52 2.26 1.07 0.63 1.06 0.37 1.06 0.23 -3.03 Renewable 24.68 22.13 59.62 35.00 144.82 50.58 230.23 50.73 8.30 -0.15 Geothermal 10.42 9.35 14.38 8.44 18.88 6.59 21.29 4.69 2.58 Hydro 10.08 9.04 10.53 6.18 25.95 9.06 41.30 9.10 5.16 Wind 1.03 0.92 15.63 9.17 49.00 17.11 92.76 20.44 17.44 Solar 1.82 1.63 17.96 10.54 49.99 17.46 73.72 16.24 14.13 Biomass 1.32 1.19 1.12 0.66 1.00 0.35 1.16 0.26 -0.47 111.52 100 170.35 100 286.31 100 453.81 100 Total BESS 0.06 0.47 5.14 1.02 11.00 *Average annual growth rates Figure 53. Installed Generating Capacity, By Fuel (MW), 2023-2050 Total Installed Capacity The uptrend in electricity sales and resulting power generation requires an additional capacity of 122.7 GW by 2050 constituting committed and new build power generation. It brings the country’s total installed generating capacity to 151.0 GW for the same year and translates to a 6.2 percent annual rate of increase from the 2022 installed generating capacity level of 28.3 GW. (Figure 53 and Table 17). Installed capacity from BESS also expands remarkably from 156 MW in 2022 to 3.8 GW by 2050 as this will complement the intermittency of VREs. Table 17. Installed Capacity, By Fuel (MW) Fuel Type Coal Total Capacity Capacity Additions 2022 2023-2028 2029-2050 Levels % Shares Levels % Shares 12,428 43.98 2,305 12.44 Levels 2050 % Shares Levels % Shares - - 14,733 9.76 Natural Gas 3,732 13.21 2,413 13.02 19,468 18.69 25,613 16.97 Oil 3,834 13.57 20 0.11 - - 3,854 2.55 70.72 Renewable 8,265 29.25 13,791 74.43 84,712 81.31 106,768 Geothermal 1,952 6.91 425 2.29 930 0.89 3,307 2.19 Hydro 3,745 13.25 295 1.59 9,970 9.57 14,011 9.28 Wind 427 1.51 3,700 19.97 28,142 27.01 32,269 21.37 Solar 1,530 5.41 9,328 50.35 45,620 43.79 56,478 37.41 Biomass Total BESS 611 2.16 42 0.23 50 0.05 703 0.47 28,259 100 18,528 100 104,810 100 150,967 100 156 - 2,080 - 1,544 - 3,780 - Note: The reference date for 2022 total capacity is 07 July 2023 79 Total Capacity Philippine Energy Plan === pep-2023-2050-vol1-section-d-page-089.pdf === The RE capacities constitute 70.7 percent (106.7 GW) of the installed generating capacity by the end of the planning horizon, wherein wind and solar have significant shares of 21.4 percent (32.3 GW) and 37.4 percent (56.5 GW), respectively. Natural gas, as a transition fuel, contributes 17.0 percent with capacity additions of 21.9 GW between 2022 and 2050. The advisory on coal moratorium impedes the deployment of new capacity for coal except for the projects that are already in the pipeline and scheduled between 2023-2027. The shares of coal and oil decline to 9.8 percent and 2.6 percent, respectively, in 2050. D. GREENHOUSE GAS (GHG) EMISSIONS Energy supply and demand dynamics translate to doubling of the GHG emission to 270.1 million metric tons of CO2 equivalent (MtCO2e) in 2050 compared to its 2022 level of 135.7 MtCO2e. With the shift towards RE and natural gas as primary fuels for power generation, the GHG emission in the transformation sector grows steadily at 1.6 percent across the planning horizon. Its share in total GHG emissions drops to 45.2 percent in 2050 from 57.1 percent in 2022 consistent with the decarbonization target in power generation. Increased energy consumption in the industry and transport sectors results in yearly increase of 4.0 percent and 2.6 percent, respectively, in their GHG emission between 2022 and 2050. By 2050, the transport sector contributes 27.1 percent and maintains its position as the second largest emitter next to the transformation sector. Figure 54. GHG Emission, by Sector (left) and by Fuel (right): Reference Scenario (in MtCO2e), 2010 – 2050 Transformation Transport Industry Services Household Agriculture Natural Gas Oil Coal Weakened reliance on coal, specifically in the power generation sector, slows down the fuel’s GHG emission at an annual rate of 0.5 percent towards 86.6 MtCO2e in 2050 as compared to 2022 level of 75.2 MtCO2e. On the other hand, as oil demand remains upbeat, its associated GHG emission rises by 3.0 percent per year across the planning horizon. With the influx of LNG imports, the GHG emission from natural gas accelerates by 8.4 percent each year as its level shoots up almost 10 times from 6.1 MtCO2e in 2022 to 58.0 MtCO2e in 2050 (Figure 54). HIGHLIGHTS FOR ENERGY SUPPLY AND DEMAND OUTLOOK 2023-2028 Total Final Energy Consumption Under the REF scenario, TFEC expands at an annual rate of 3.9 percent and reaches 45.0 MTOE by 2028 from its 2022 level of 35.9 MTOE. Energy requirement for industrial processes registers the fastest growth of 5.2 due to improved production capacities and robust consumer demand. As realization of mobility infrastructure projects between 2022 and 2028 sustain the transport sector’s position as most energy-intensive, it accounts for 34.1 percent of TFEC. Oil and electricity continue to provide for bulk of energy requirements across all sectors with a total share of 76.4 percent in 2028. 23 24 RA 11552 or “An Act Extending and Enhancing the Implementation of the Lifeline Rate, amending for the Purpose Section 73 of RA 9136, otherwise known as the Electric Power Industry Reform Act of 2001, as Amended by RA 10150.” RA 11310 or “An Act Institutionalizing the Pantawid Pamilyang Pilipino Program (4Ps)” signed by then President Rodrigo R. Duterte on 27 May 2021. Vo l u m e 1 80 === pep-2023-2050-vol1-section-d-page-090.pdf === Table 18. TFEC Under Reference Scenario, By Sector, 2022-2028 (in MTOE) Sectors Actual 2022 Outlook 2023 2024 2025 AAGR (%) 2026 2027 2028 2022-2028 Agriculture 0.38 0.41 0.36 0.36 0.38 0.41 0.44 2.48 Industry 7.11 7.31 7.73 8.19 8.67 9.15 9.65 5.23 4.36 Services 4.45 4.73 4.93 5.12 5.32 5.53 5.75 Household 10.31 10.47 10.68 10.92 11.17 11.42 11.69 2.11 Transport 12.32 12.83 13.25 13.75 14.30 14.86 15.41 3.79 Non-Energy Total 1.29 1.55 1.73 1.85 1.95 2.02 2.07 8.25 35.86 37.31 38.68 40.18 41.79 43.39 45.00 3.86 Table 19. TFEC Under Reference Scenario, By Fuel, 2022-2028 (in MTOE) Fuel Actual 2022 Outlook 2023 2024 2025 AAGR (%) 2026 2027 2028 2022-2028 Coal 1.95 1.94 2.04 2.15 2.27 2.39 2.52 4.38 Oil & Oil Products 18.27 19.27 20.11 20.99 21.92 22.78 23.62 4.38 Biodiesel 0.17 0.18 0.19 0.19 0.20 0.21 0.21 3.97 Bioethanol 0.41 0.39 0.40 0.42 0.43 0.45 0.47 2.48 Electricity 7.85 8.26 8.61 9.05 9.55 10.12 10.73 5.34 Biomass 7.22 7.27 7.33 7.38 7.41 7.44 7.45 0.53 35.86 37.31 38.68 40.18 41.79 43.39 45.00 3.86 Total Incorporating demand-side targets under the CES results in a 5.3 MTOE cumulative reduction in TFEC between 2022 and 2028 vis-à-vis the REF (Figure 55). Transport posts the largest decline compared to its levels under the REF as alternative fuels (electricity, biodiesel) displace portions of the sector’s gasoline and diesel consumption during the period. Implementation of EEC, particularly on electricity and oil products, reduces the energy requirement among sectors. On a per fuel basis, the consumption of biodiesel doubles as the mandated blend increases from 2.0 percent to 5.0 percent starting 2026. Figure 55. Sectoral (left) and Fuel (right) Level Difference, Clean Energy vs Reference, 2023-2028 (MTOE) 81 Philippine Energy Plan === pep-2023-2050-vol1-section-d-page-091.pdf === Total Primary Energy Supply Table 20. TPES Under Reference Scenario, by Fuel, 2022-2028 Source Actual 2022 Outlook 2023 2024 2025 AAGR (%) 2026 2027 2028 2022-2028 Coal 19.83 20.10 20.46 21.34 22.27 23.13 23.97 3.21 Natural Gas 2.61 2.82 3.58 3.65 3.74 3.62 3.52 5.11 Oil 19.08 19.02 19.18 19.75 20.44 21.58 22.78 3.01 Renewable 20.04 21.69 21.52 22.24 22.57 23.96 24.93 3.71 Geothermal 8.96 10.23 9.88 10.24 10.98 11.37 11.98 4.95 Hydro 2.51 2.41 2.55 2.53 1.58 2.51 2.36 -1.01 Wind 0.09 0.09 0.28 0.42 0.73 0.81 0.87 46.21 Solar 0.16 0.23 0.47 0.60 0.92 0.87 1.22 40.86 Biomass 7.73 8.16 7.73 7.83 7.72 7.74 7.82 0.19 Biofuels 0.59 0.57 0.59 0.61 0.64 0.66 0.68 2.57 Total 61.56 63.64 64.73 66.98 69.01 72.29 75.21 3.39 RE Share (%) 32.55 34.09 33.24 33.20 32.70 33.15 33.15 By 2028, the country’s energy supply requirement reaches 75.2 MTOE as it grows yearly at a rate of 3.4 percent (Table 20). Under the REF, RE supports around 33.1 percent of the country ‘s energy needs in 2028. Geothermal accounts for 48.0 percent of the total RE followed by biomass at 31.4 percent. Hydro contributes around 9.5 percent, while the rest comes from solar, wind, and biofuels. Between 2022 and 2028, oil and coal still account for more than 30.0 percent of the country’s supply sources as both fuels are used for power and end-use applications such as transport and industry. Also, committed CFPPs are still up within this period. Meanwhile, natural gas accounts for 4.7 percent of the TPES. The impact of the energy supply-side assumptions under the alternative energy scenarios, CES 1 and CES 2, manifests in the higher RE shares of 38.6 percent and 39.2 percent, respectively, from 33.1 percent in the REF (Figure 56). This includes the impact of almost 2.0 GW of OSW capacities that form part of the country’s energy supply in 2028. Figure 56. 2028 Energy Mix, Fuel, Levels: REF, CES 1 and CES 2 23% 33% 23% 30% 39v% REF 39% 7% CES-1 7% CES-2 5% 31% 32% Coal Natural Gas Oil 31% Renewable Given the initiative towards energy transition, the share of coal declines from 30.3 percent in the REF to around 23.0 percent for both the CES energy mixes in 2028. There is also an increase in contribution from natural gas as LNG imports start to figure in the energy mix for the same year. PEP 2023 – 2050 vs PDP 2023 – 2028 Comparison of Results Matrix for Subchapter Outcome 4 Indicators Results Matrices (RM) accompany every chapter of the PDP 2023-2028 and contain indicator statements and targets to be achieved for the next six years. It is an instrument designed to provide results orientation to the PDP, anchored on results-based management (RbM), which is a strategy that focuses on performance by highlighting achievements of outcomes and impacts. Chapter 12 of the PDP titled “Expand and Upgrade Infrastructure” outlines the current challenges faced in infrastructure space, specifically in the sectors of connectivity, water, energy, and social infrastructure. It also emphasizes that economic transformation for our infrastructure sector will begin by “building better and more.” Vo l u m e 1 82 === pep-2023-2050-vol1-section-d-page-092.pdf === Energy-sector-related targets and indicators are provided under Subchapter Outcome 4. These are aligned with the SDG 7 that call for affordable, reliable, sustainable, and modern energy for all by 2030. The SDG 7 has three core targets as follows: (1) ensure universal access to affordable, reliable, and modern energy services; (2) increase substantially the share of renewable energy in the global energy mix; and (3) double the global rate of improvement in energy efficiency. Each of these core targets has corresponding measurable indicators, called SDG Tier 1 indicators, that form part of the RM for the Subchapter on Energy. The succeeding sections discuss these indicators in comparison with the PEP 2023-2050 for the medium-term 2023-2028. The PEP 2023-2050 exceeds the targets identified under the PDP 2023-2028 Subchapter Outcome 4: affordable, accessible, reliable and clean energy provided based on the resulting SDG Tier 1 Indicators. SDG Tier 1 Indicator 7.1.1 Proportion of population with access to electricity a. (Increased) proportion of households with access to electricity: The government, through the DOE, targets the achievement of the 100 percent household electrification target by 2028. Table 21. Household Electrification Level (in Percent) Actual 2021 PDP 2023-2028 PEP 2023-2050* Medium-Term Outlook 2022 95.41 96.71 2023 2024 2025 2026 2027 95.41 95.5 TBD TBD TBD 2028 TBD 93.09 94.8 96.8 98.6 99.9 100.0 *2021-2022 are actual data from Rural Electrification Administration and Management Division of the Electric Power Industry Management Bureau (REAMD-EPIMB) b. (Increased) electricity consumption (in kWh) per capita: The table below shows the projected level of electricity consumption per capita (in kWh) from the Energy Outlook 2023-2028, which exceeds the target for all years compared to the PDP 2023-2028. Electricity per capita grows by 4.0 percent from 999 kWh to 1,262 kWh under the REF, while the two clean energy scenarios (CES 1 and CES 2) show slightly lower levels due to the impacts of EEC. Table 22. Electricity Consumption (kWh) per capita Actual 2021 Medium-Term Outlook 2022 2023 2024 2025 2026 2027 2028 897 945 996 1,051 1,110 1,172 1,002 1,057 1,100 1,149 1,203 1,262 CES 1 1,002 1,057 1,096 1,142 1,194 1,250 CES 2 1,002 1,057 1,096 1,141 1,194 1,249 PDP 2023-2028 PEP 2023-2050* Reference 963 999 *2021-2022 are actual data from the Energy Balance Table or EBT (as of 07 July 2023) SDG Tier 1 Indicator 7.2.1 Renewable energy share in total final energy consumption a. 83 (Increased) share of renewable energy in the power generation mix: As more RE capacities are expected to take hold under the CES 1 and CES 2, RE shares are higher than the targets under PDP 2023-2028. Specifically, RE share by 2028 is 6.0 to 9.0 percentage points higher under the PEP visà-vis the PDP. The country is likewise on-track to achieve its RE target in 2030 as the share climbs further to 35.0 percent under the REF, and higher at more than 40.0 percent for both the CES 1 and CES 2. Philippine Energy Plan === pep-2023-2050-vol1-section-d-page-093.pdf === Table 23. RE Share in Generation Mix (in Percent) Actual* 2021 Medium-Term Outlook 2022 2023 2024 2025 2026 2027 2028 24 26 28 30 32 33 23.9 25.6 27.2 28.8 30.3 31.9 CES 1 23.9 28.0 29.6 34.6 34.3 39.2 CES 2 23.9 28.0 30.7 37.5 37.2 41.8 PDP 2023-2028 PEP 2023-2028 Reference 22.4 22.1 *2021-2022 are actual data from the EBT (as of 07 July 2023) SDG Tier 1 Indicator 7.3.1 Energy intensity measured in terms of primary energy and GDP a. (Decreased) energy intensity measured in terms of primary energy and GDP: Energy intensity is the amount of energy needed to produce one unit of economic output. A lower number means that the economy produces value using a lesser amount of energy, whichindicates improvements in energy efficiency. However, this result depends on the structure of the economy. Highly industrialized economies tend to use a greater amount of energy per unit of economic output. For the Philippines, the economic structure focuses more on services which is a less energy-intensive sector. By 2028, the country’s energy intensity level ranges from 2.5 to 2.4 TOE/PhP million (REF to CES 1 and CES 2) and translates to yearly average reductions of around 4.0 to 5.0 percent from 2022 level. Using 2005 as base year, energy intensity level drops by as much as 50.0 percent by 2030. Table 24. Energy Intensity (TOE per PhP Million at 2018 Constant Prices) Actual* 2021 2022 Medium-Term Outlook 2023 2024 2025 2026 2027 2028 TBD TBD TBD TBD TBD TBD 3.00 2.86 2.76 2.65 2.57 2.48 CES 1 2.99 2.87 2.73 2.60 2.49 2.36 CES 2 2.99 2.87 2.73 2.59 2.47 2.35 PDP 2023-2028 PEP 2023-2028 Reference 3.20 3.09 *2021-2022 are actual data from the EBT (as of 07 July 2023) III. Clean Energy Scenario The CES presents the impact of progressive initiatives toward energy transition in addition to current decarbonization strategies under the REF. The CES also covers expansion to a more diversified energy mix characterized by the entry of OSW (19.0 GW for CES 1 and 50.0 GW for CES 2) and nuclear power, as well as voluntary retirement and possible repurposing of CFPPs. On the demand side, CES adopts higher biodiesel blend, EEC target, and EV penetration rate. Vo l u m e 1 84 === pep-2023-2050-vol1-section-d-page-094.pdf === A. TOTAL FINAL ENERGY CONSUMPTION The demand-side targets under the CES slow down the progress of TFEC as it grows at an annual rate of 3.0 percent between 2022 and 2050 or 0.4 percentage points less than the REF with 3.4 percent. By 2050, TFEC under the CES stands at 82.9 MTOE or 7.7 MTOE lower than the REF for the same period. Changes by Sector All sectors register reduced energy consumption under the CES compared to the REF (Figure 57). Of the difference between the two scenarios in 2050, the transport and industry sectors comprise 5.2 MTOE, while the rest of the end-use sectors (services, households, agriculture) and nonenergy use, contribute to the remaining 2.5 MTOE. The reduction in energy consumption for the transport sector stems from the displacement of gasoline and diesel due to the target increase of EV penetration in road transport, combined with higher biodieselblend and fuel savings on other oil products. In addition, energy Figure 57. Level Changes in TFEC By Sector (CESREF) (MTOE), 2023– 2050 savings (electricity and oil) effectively taper down the energy requirement of other sectors. Figure 58. Level Changes in TFEC By Fuel (CES-REF) (MTOE), 2023– 2050 Changes by Fuel Total consumption of oil and oil products falls by as much as 7.0 MTOE in 2050 under the CES vis-à-vis the REF. Gains from the implementation of EEC on electricity in other sectors are offset by the rise in the transport sector’s utilization. This brings the net decline in electricity utilization to 395 kTOE in 2050 between the two scenarios (Figure 58). Biodiesel levels rise twice as much in the CES to 731 kTOE in 2050 from 169 kTOE in 2022. These changes reflect the impact of fuel diversification in end-use sectors due to an increase in biofuel blend rate, as well as EEC and CREVI targets. B. TOTAL PRIMARY ENERGY SUPPLY Figure 59. Level Changes in TPES, by Fuel: CES-REF (MTOE): 2023-2050 With the dynamic changes in the country’s TFEC and power sector, the TPES under the CES registers a 2.6 percent annual increase between 2022 and 2050, which is 0.4 percentage points slower than the rise in TPES under the REF. As total energy supply under the CES stands at 127. 3 MTOE by 2050, the gap between the two scenarios reaches 13.2 MTOE (Figure 59) due to the adoption of new technologies (OSW and nuclear), as well as new power plants with improved efficiency and requiring lesser fuel than the existing ones. 85 Philippine Energy Plan === pep-2023-2050-vol1-section-d-page-095.pdf === Total RE share in the CES energy mix in 2050 stands at 41.1 percent or 5.6 percentage points more than the REF’s 35.5 percent in 2050 (Figure 60). With the aggressive promotion and utilization of RE for power generation, the share of fossil fuels (coal, oil, and natural gas) diminishes by a cumulative 16.5 percentage points and drops to 51.0 percent by 2050 vis-à-vis 67.4 percent in 2022. Nuclear enters the country’s energy mix by 2032 and accounts for 7.9 percent share to TPES in 2050. Figure 60. 2050 Energy Mix, 2040 vs 2050 for REF and CES 2040 REF (Inner) Total: 107.6 MTOE 8% 1% 5% 4% 4% 5% 5% 6% 6% 15% 1% 5% 19% 7% 1% 6% 21% 2050 REF (Inner) Total: 140.5 MTOE 14% 1% 4%4% 16% 8% 7% 6% 2040 10% 10% 2050 13% 6% 32% 16% 6% 8% 18% 31% 29% 29% 13% 2040 CES (Outer) Total: 100.4 MTOE 2050 CES (Outer) Total: 127.3 MTOE Changes in Energy Supply for Power Application Total fuel requirements for power generation in 2050 under the CES register a level of 79.2 MTOE and account for 62.2 percent of TPES during the same period. This is 1.7 percentage points lower than the REF for the same year, which reflects improved plant efficiencies, as well as the displacement of fossil fuels to give way for the increasing share of renewables. Decommissioning of coal capacities leads to a reduction in coal’s share to fuel input mix between the REF and the CES at 3.5 percentage points for 2050. The increase RE share from 51.4 percent to 58.0 percent in 2050, bulk of which comes from OSW and solar, brings down natural gas share by 15.8 percentage points under the CES vis-à-vis the REF for the same year (Table 25). Table 25. Fuel Input, By Fuel (MTOE), 2040 and 2050 for REF vs. CES 2040 Source 2050 REF CES REF % Pts Diff in Shares CES vs REF CES Levels % Shares Levels % Shares Levels % Shares Levels % Shares Coal 18.07 29.61 14.76 24.81 16.19 19.04 12.28 15.52 2040 -4.79 2050 -3.52 Natural Gas 10.83 17.74 6.50 10.93 24.82 29.20 10.61 13.40 -6.82 -15.80 Oil-based 0.35 0.57 0.29 0.48 0.35 0.41 0.29 0.36 -0.09 -0.05 Renewable 31.78 52.08 32.90 55.30 43.64 51.35 45.91 58.00 3.22 6.66 Geothermal 16.23 26.60 15.82 26.59 18.30 21.53 16.56 20.92 -0.01 -0.62 Hydro 6.65 10.90 6.46 10.87 10.59 12.46 8.41 10.62 -0.04 -1.84 Wind 4.21 6.90 4.84 8.14 7.98 9.38 12.43 15.70 1.24 6.32 Solar 4.30 7.04 4.86 8.17 6.34 7.46 7.65 9.67 1.12 2.21 Biomass 0.38 0.63 0.91 1.53 0.44 0.51 0.87 1.09 0.90 0.58 Nuclear Energy Total - - 5.04 8.48 - - 10.06 12.71 8.48 12.71 61.02 100 59.50 100 84.99 100 79.15 100 0.00 0.00 Vo l u m e 1 86 === pep-2023-2050-vol1-section-d-page-096.pdf === Changes in Energy Supply for Non-Power Application Non-power requirement under the CES stands at 48.2 MTOE and accounts for more than a third (37.8 percent) of the 2050 energy mix, albeit 1.7 percentage points lower than the REF for the same year (Table 26). By the end of the planning period, target energy savings from oil and bioethanol bring a 16.2 percent and 28.9 percent reduction in their levels under the CES, respectively. Meanwhile, as the mandated biodiesel blend increases from 2.0 percent to 5.0 percent effective 2026, its non-power utilization also increases twice as much in 2050 between the REF and the CES. Efficiency improvements in the use of coal among industrial processes also reduces its utilization by 9.2 percent between the two scenarios. Changes in Indigenous Energy Aggregate supply of RE and nuclear energy drives the 0.8 Table 26. Non-Power Requirements, By Fuel (MTOE) REF vs CES Fuel 2022 Actual 2050 REF CES % Change in Levels CES-REF Coal 1.95 6.10 5.54 -9.15 Oil 18.27 43.15 36.17 -16.18 Biodiesel 0.17 0.35 0.73 111.07 Bioethanol 0.41 0.75 0.58 -22.45 Biomass 7.22 5.16 5.16 0.00 Total 28.01 55.50 48.18 -13.19 Share to TPES 45.49 39.50 37.84 Figure 61. Level Changes in Indigenous Energy by Fuel (CES-REF) (MTOE), 2023 – 2050 percentage points difference in annual growth rate of total indigenous energy, from 2.1 percent under the REF to 2.9 percent under the CES by 2050. Nuclear and wind exhibit the largest positive level changes between the REF and the CES due to higher contribution in the generation mix, while the expansion in biodiesel blend rate also contributes to the difference between the two scenarios across the planning timeline (Figure 61). The entry of nuclear energy in 2032 complements the country’s push for energy transition and self-sufficiency. Despite the importation of uranium minerals, its enrichment, i.e., conversion to useful energy for nuclear power generation, is considered a domestic energy production, such that by 2050, domestic nuclear energy supply reaches 10.1 MTOE. These trends in indigenous energy supply sustain the country’s self-sufficiency under the CES as it reaches 52.8 percent in 2050 or 14.0 percentage points higher than the REF’s 38.8 percent for the same period. Higher renewable energy supply in the CES translates to improved self-sufficiency levels vis-à-vis the REF despite increasing LNG imports for power generation. Changes in Net Energy Imports The volume of net energy imports under the CES is lower than the REF by an average of 19.5 percent between 2022 and 2050 (Figure 62). The changes in net energy imports reflect the decreasing utilization of natural gas and coal in CES with substantial RE inputs for power generation. Similarly, the reduction in demand for mostly imported fuels such as coal, oil, and bioethanol in other industries results in lower net energy imports under the CES compared to the REF across the planning horizon. By 2050, net energy imports rise to 59.9 MTOE, which translates to yearly increase of 2.4 percent. Of the 25.9 MTOE difference in the level of net energy imports between the scenarios, natural gas makes up the biggest share at 54.9 percent, followed by oil with 27.2 percent, coal with 17.2 percent, and bioethanol for the remaining 0.6 percent. 87 Figure 62. Level Changes in Net Energy Imports, by Fuel (CES-REF) (MTOE), 2023 – 2050 Philippine Energy Plan === pep-2023-2050-vol1-section-d-page-097.pdf === Changes in GHG Emissions Demand and supply-side mitigation measures reduce the level of GHG emission under the CES by as much as 70.5 MtCO2e by 2050 (Figure 63). The transformation sector takes the biggest chunk (69.0 percent share) of the difference in GHG emission between the scenarios because of energy transition in the power sector. The expected energy savings on electricity and oil, as well as fuel diversification in the transport sector, also result in lower GHG emissions from end-use sectors. Figure 63. Level Changes in the GHG Emission (CES-REF) (MtCO2e), 2023–2050 (left) by Sector & (right) by Fuel In terms of fuel, natural gas accounts for 47.1 percent of the total GHG reduction between the CES and REF by the end of the planning period. Due to large volume of aggregate RE resources as fuel input to power generation, the GHG emission from natural gas drops by more than half from 58.0 MtCO2e in the REF to 24.8 MtCO2e in the CES in 2050. Oil is still the biggest source of GHG emission for both scenarios. However, its level under the CES is lower by 19.9 MtCO2e compared to the REF in 2050, while coal also registers a reduction of 17.3 MtCO2e for the same year. C. POWER SUPPLY AND DEMAND Figure 64. Level Changes in Electricity Sales (GWh) (CES-REF), 2023–2050 Changes in Electricity Sales Total electricity sales under the CES reach 403.5 TWh in 2050 vis-à-vis 408.1 TWh under the REF, as the difference between the two scenarios peak at 4.6 TWh (Figure 64). Gains in energy savings offset the expected hike in transport’s electricity consumption with the impact of a 50.0 percent penetration rate of EVs. The annual rate of increase in electricity sales under the CES registers at 5.4 percent. Changes in Gross Generation The CES paves the way for the crucial role of RE in changing the country’s generation mix through its 50.0 percent share by 2040, which increases further to more than 50.0 percent by 2050 (Figure 65). Improved efficiency of power plants under the CES results in slightly lower gross generation level of 443.9 TWh vis-à-vis 453.8 TWh under the CES. However, the power mix changes significantly as decarbonization takes place through combined RE and natural gas that constitute 71.8 percent share and 80.2 percent share in 2040 and 2050, respectively, which effectively reduces coal’s share to 20.9 percent and 11.0 percent for the same milestone years. Vo l u m e 1 88 === pep-2023-2050-vol1-section-d-page-098.pdf === Figure 65. Gross Generation Mix by Fuel Shares, 2040 & 2050 | REF vs CES 1% 2040 REF (Inner) Total: 286.3 TWh 1% 7% 9% 11% 16% 14% 21% 18% 20% 17% 20% 2040 9% 20% 25% 15% 21% 15% 9% 7% 4% 7% 5% 33% 9% 2040 CES (Outer) Total: 279.2 TWh 2050 35% 24% 7% 2050 REF (Inner) Total: 453.8 TWh 2050 CES (Outer) Total:443.9 TWh The realization of RE target shares under the CES induces a significant rise in wind generation output to 144.5 TWh by 2050, which translates to a 32.6 percent share in the generation mix for the same year (Table 27). This is due to OSW awarded contracts that bring an additional 19 GW capacities by the end of the planning period. Despite the natural gas’ role as a transition fuel, it gives way for the increasing share of VRE, such as solar and wind, and thus reflects a declining share in the generation mix under CES at around 15.0 percent for 2040 and 2050. The CES also provides a window for the entry of nuclear and other emerging technologies. Generation output from these energy sources rises from 9.7 TWh in 2032 to 19.4 TWh in 2040. By the end of the planning timeline, it accounts for 8.7 percent of the country’s generation mix equivalent to 38.6 TWh. Table 27. Gross Generation, By Fuel (TWh), 2040 & 2050 for REF vs CES 2040 Source Levels CES % Shares Levels % Shares 24.86 58.45 20.94 63.77 14.05 48.64 10.96 Natural Gas 69.26 24.19 41.59 14.90 158.76 34.98 67.87 15.29 -9.29 -9.70 Oil-based 1.06 0.37 0.88 0.32 1.06 0.23 0.88 0.20 -0.06 -0.04 Renewable 144.82 50.58 158.90 56.92 230.23 50.73 287.90 64.86 6.34 14.13 18.88 6.59 18.40 6.59 21.29 4.69 19.25 4.34 0.00 -0.35 Hydro 25.95 9.06 25.22 9.03 41.30 9.10 32.79 7.39 -0.03 -1.71 Wind 49.00 17.11 56.32 20.17 92.76 20.44 144.54 32.56 3.06 12.12 Solar 49.99 17.46 56.52 20.24 73.72 16.24 88.99 20.05 2.78 3.80 Biomass 1.00 0.35 2.45 0.88 1.16 0.26 2.33 0.52 0.53 0.27 - - 19.36 6.93 - - 38.62 8.70 6.93 8.70 286.31 100 279.19 100 453.81 100 443.90 100 - - * * Total BESS 0.47 Levels % Shares 7.78 Levels % Pts Diff in Shares CES vs REF CES 71.17 Nuclear and Other Technologies % Shares REF Coal Geothermal 89 2050 REF 1.02 Philippine Energy Plan 24.55 2040 -3.92 2050 -3.09 === pep-2023-2050-vol1-section-d-page-099.pdf === Changes in Total Installed Capacity Figure 66. Level Changes in Installed Capacities by Fuel (CES-REF) (MW) 2023 – 2050) The CES generates 3.4 GW aggregate capacity more than the REF (Figure 66) as its levels rise to 154.3 GW in 2050. Wind and nuclear and other emerging technologies account for bulk of the increase, as new capacities of around 13.6 GW and 4.8 GW, respectively, come online across the planning horizon. These offset the reduced capacities from coal, natural gas, solar, and hydro. From the 2022 total installed capacity level of 28.6 GW, the CES requires 129.7 GW of additional capacity (excluding decommissioned capacities) to provide for the country’s electricity needs by 2050 (Table 28). In the same year, aggregate RE installed capacity stands at 114.8 GW and represents the biggest chunk of the mix at 74.4 percent. Along with the voluntary retirement and possible repurposing of CFPPs, the CES allows for the reduction in its total installed capacities of around 3.6 GW compared to the REF across the planning horizon. The BESS also ramps up its contribution to total installed capacity with 22.0 GW under the CES in 2050 with the increased capacity of VREs. Table 28. Installed Capacity, By Fuel (MW) Fuel Type Total Ca pacity 2022 Levels Coal Capacity Additions 2023-2050 %Shares 12,428 Total Capacity: 2050 REF Levels CES REF CES %Shares Levels 43.98 2,305 2,305 14,733 9.76 11,111 %Shares 7.20 Natural Gas 3,732 13.21 21,881 15,989 25,613 16.97 19,721 12.78 Oil 3,834 13.57 20 20 3,854 2.55 3,854 2.50 74.41 Renewable 8,265 29.25 98,503 106,568 106,768 70.72 114,833 Geothermal 1,952 6.91 1,355 1,005 3,307 2.19 2,957 1.92 Hydro 3,745 13.25 10,265 6,800 14,011 9.28 10,546 6.83 Wind 427 1.51 31,842 45,460 32,269 21.37 45,887 29.74 Solar 1,530 5.41 54,948 53,164 56,478 37.41 54,694 35.44 611 2.16 92 138 703 0.47 749 0.49 - - - 4,800 - - 4,800 3.11 28,259 100 122,708 129,681 150,967 100 154,319 100 3,624 21,859 3,780 Biomass Nuclear and Other Technologies Total BESS 156 22,015 Note: Reference date for 2022 total capacity is 07 July 2023 Vo l u m e 1 90 === pep-2023-2050-vol1-section-d-page-100.pdf === D. IMPACT OF 50 GW ADDITIONAL OFFSHORE WIND (OSW) CAPACITY Cognizant of the need to transition the country’s energy sector, the DOE remains steadfast in its commitment towards the aggressive promotion of renewable energy, which results in the immense interest in RE resources. The OSW holds the greatest potential in diversifying our energy portfolio towards low-carbon, clean, and sustainable fuels with a total of 178 GW of OSW potential capacity. Potential areas currently under consideration comprise 18 GW of fixed and 160 GW of floating capacities over six (6) development areas from Northwest Luzon down to the Negros/Panay area. Thus, from a CES 1 with 19 GW OSW capacity by 2050, this PEP considers further increasing OSW to 50 GW capacity (CES 2). It is also noteworthy to mention that OSW provides the highest capacity factor (with an average of 44.0 percent) than any other VRE technology. Total Primary Energy Supply TPES under the CES 2 with 50-GW OSW is 3.9 percent lower compared to the CES 1 with 19-GW OSW capacities as more efficient technologies comprise the country’s energy mix in 2050 (Table 29). Wind’s share to the energy mix also ramps up from 4.4 percent in 2030 to 15.5 percent by 2050 which pushes the total RE share to 42.5 percent during the same year. Wind energy consistently displaces a portion of the contribution of other RE sources, including coal and natural gas. The decline in coal’s share in the TPES to 13.2 percent in 2050 vis-à-vis its 31.0 percent share in 2022, is an outcome of the decommissioning of power generation capacities (voluntary retirement) across the planning horizon (Figure 67). Figure 67. TPES Mix, by Fuel Shares (%): 2030, 2040 and 2050, CES 1 (19 GW OSW) vs CES 2 (50 GW OSW) 1% 1% 9.9% 11.1% 1.9% 1.7% 3.4% 2.7% 1.7% 15.5% Table 29. Total Primary Energy Supply, By Fuel (MTOE): 2022, 2040 & 2050: CES 1 vs CES 2 Source 2030 2040 CES 2 [with 50 GW OSW] 2050 2030 2040 2050 Coal 19.08 18.84 18.72 17.82 15.93 17.05 Natural Gas 2.61 5.30 6.50 10.61 4.81 5.74 7.62 Oil-based 19.83 23.02 28.95 36.46 23.02 28.95 36.46 Renewable 16.13 20.04 29.28 41.21 52.38 30.43 39.76 52.05 Geothermal 8.96 13.19 15.82 16.56 13.17 13.56 14.79 Hydro 2.51 3.29 6.46 8.41 3.27 5.93 6.96 Wind 0.09 2.06 4.84 12.43 3.15 8.20 18.95 Solar 0.16 1.30 4.86 7.65 1.39 2.85 4.10 Biomass 7.73 8.49 8.08 6.03 8.49 8.09 5.93 Biofuels 0.59 0.96 1.14 1.31 0.96 1.14 1.31 - - 5.04 10.06 - 5.04 10.06 122.32 Nuclear and Other Tech Total 91 CES 1 [with 19 GW OSW 2022 ACTUAL 61.56 76.45 100.43 127.33 74.19 96.55 RE Share (%) 32.55 38.31 41.03 41.14 41.02 41.18 42.55 Self-Sufficiency 49.42 55.28 51.04 52.93 58.51 51.58 54.83 Philippine Energy Plan === pep-2023-2050-vol1-section-d-page-101.pdf === As the additional OSW capacity boosts the level of total RE supply, the CES 2 effectively leads to increased indigenous energy. It translates to an improved self-sufficiency level of 54.8 percent from 52.9 percent under the CES 1, and much higher than its 2022 level of 49.4 percent. With such selfsufficiency level by 2050, the volume of net energy imports stands at 55.3 MTOE, or 7.8 percent less than CES 1’s 59.9 MTOE for the same year. Total Installed Capacity Increasing OSW capacity to 50.0 GW slightly pushes the country’s total installed capacity to 156.4 GW in 2050 compared to 154.3 GW under the CES 1 (Table 30). As wind’s share to the capacity mix gets bigger under the CES 2, it also displaces other RE capacities, specifically solar. By 2050, RE share under the CES 2 declines to 73.7 percent from 74.4 percent under the CES 1. This slight reduction is primarily due to the displacement of technologies with lower capacity factors, such as solar and onshore wind (Figure 68). Meanwhile, the increased share of RE and decommissioning of 4.3 GW capacity from CFPP lead to increased natural gas capacities by 2.9 GW between the two CES scenarios. Meanwhile, the BESS capacities reach 24.7 GW under CES 2, a bit higher than CES 1 due to increased share of VREs. Figure 68. Capacity Mix, by Fuel Shares (%): 2030, 2040 and 2050. CES 1 (19 GW OSW) vs CES 2 (50 GW OSW) Table 30. Capacity Additions and Total Installed Capacity, By Fuel (MW): CES 1 vs CES 2 Source 2022 Total Capacity CES 1 [with 19 GW OSW) 2023-2028 2029-2050 2050 Total Capacity 2023-2028 2029-2050 2050 Total Capacity 12,428 2,305 - 11,111 2,305 - 9,929 Natural Gas 3,732 2,413 13,576 19,721 2,413 16,444 22,589 Oil-based 3,834 20 - 3,854 20 - 3,854 Renewable 8,265 13,458 93,110 114,833 14,919 92,033 115,217 Geothermal 1,952 425 580 2,957 425 580 2,957 Hydro 3,745 770 6,030 10,546 770 5,410 9,926 Coal Capacity Additions CES 2 [with 50 GW OSW] Capacity Additions Onshore Wind 427 3,910 22,050 26,387 5,371 10,037 15,835 Offshore Wind - 2,000 17,500 19,500 2,000 48,100 50,100 1,530 6,231 46,934 54,694 6,231 27,890 35,651 611 122 16 749 122 16 749 - - 4,800 4,800 - 4,800 4,800 28,259 18,195 111,486 154,319 19,656 113,277 156,389 156 2,080 19,779 22,015 2,080 22,426 24,662 29.25 73.96 83.52 74.41 75.90 81.25 73.67 Solar Biomass Nuclear and Other Technology Total BESS RE Share (%) Vo l u m e 1 92 === pep-2023-2050-vol1-section-d-page-102.pdf === Gross Power Generation The power generation mix under CES 2 highlights the immense output from wind power plants. From 0.9 percent share in 2022, wind’s contribution expands remarkably to 49.5 percent share in 2050, which brings the aggregate share of RE to as much as 70.7 percent during the same year (Table 31). Consistent with the structure of the capacity mix, wind power replaces a portion of other RE, specifically solar, as well as coal and natural gas (Figure 69). Table 31. Gross Generation, By Fuel (TWh): 2022, 2040 & 2050: CES 1 vs CES 2 Source 2022 Actual CES 1 [with 19 GW OSW] 2030 2040 CES 2 [with 50 GW OSW] 2050 2030 2040 2050 Coal 66.43 64.08 58.45 48.64 52.65 51.96 42.05 Natural Gas 17.88 33.90 41.59 67.87 30.77 36.74 48.77 Oil-based 2.52 0.88 0.88 0.88 0.88 0.89 0.88 Renewable 24.68 70.00 158.90 287.90 83.68 169.85 314.55 Geothermal 10.42 15.35 18.40 19.25 15.31 15.77 17.21 Hydro 10.08 12.82 25.22 32.79 12.77 23.14 27.15 Wind 1.03 23.94 56.32 144.54 36.65 95.33 220.38 Solar 1.82 15.08 56.52 88.99 16.14 33.15 47.74 Biomass 1.32 2.81 2.45 2.33 2.81 2.45 2.07 - 19.36 38.62 - 19.36 38.62 168.86 279.19 443.90 167.99 278.80 444.87 0.59 7.78 24.55 0.63 6.48 33.15 41.45 56.92 64.86 49.81 60.92 70.71 Nuclear and Other Technology Total 111.52 BESS RE Share (%) 22.13 Figure 69. Generation Mix, by Fuel Shares (%): 2030, 2040 and 2050. CES 1 (19 GW OSW) vs CES 2 (50 GW OSW) 93 Philippine Energy Plan === pep-2023-2050-vol1-section-d-page-103.pdf === GHG Emissions Figure 70. Level Change in GHG Emission: CES 1 vs CES 2 (MtCO2e), 2023-2050 The transformation sector, i.e., power generation, gets a respite from GHG emissions due to the impact of CES 2 pathway. Between 2022 and 2050, the cumulative reduction in GHG emission of the sector is 282.1 MtCO2e due to the additional 50.0 GW OSW capacity. In terms of fuel, emission from coal is likewise reduced by a cumulative of 243.0 MtCO2e across the planning horizon (Figure 70). The GHG emission from natural gas also registers a cumulative reduction of 39.8 MtCO2e by 2050. IMPACT OF A 20.0 PERCENT BIOETHANOL (E20) BLEND UNDER CES 2 AS A HYPOTHETICAL SCENARIO Aside from the power sector, the transport sector also requires more efforts for diversification to further reduce the dependence on imported oil, address fuel price escalation concerns and mitigate the upsurge in GHG emission. A hypothetical scenario of 20.0 percent bioethanol blend (E20) for gasoline provides an opportunity to achieve energy security and affordability objectives of the sector. Integrating E20 from 2023 to 2050 brings the cumulative reduction in the transport sector’s gasoline demand to 17.0 MTOE vis-à-vis its level under the CES with a 10.0 percent blending schedule. As the higher blend also ramps up bioethanol demand by a cumulative volume of 12.1 MTOE by 2050, TFEC levels between the two CES scenarios differ by a total of 4.8 MTOE across the planning horizon.69 To meet the increase in blend, domestic production of bioethanol supply level rises to 784.6 kTOE by 2050 visà- vis 205.7 kTOE under CES 2. The impact of this hypothetical fuel diversification measure in the transport sector also allows the avoidance of a cumulative 49.1 MtCO2e in GHG emissions from 2023 to 2050. 69 Due to replacement of gasoline by bioethanol. Gasoline has a higher calorific value than bioethanol. Vo l u m e 1 94 === pep-2023-2050-vol1-section-d-page-104.pdf === B. ENERGY TRANSITION Energy is one of the most important factors that influence the rate of progress, as well as sustainable development of the country. Sustainability is an important paradigm in the energy transition where all dimensions of sustainability are addressed by policy formulation and implementation, planning, operation, and dispatch of the energy resources in both generation and consumption. The energy sector recognizes that energy transition is a new path for economic development and innovation that does not compromise the environmental integrity and sustainability motivated by the challenges of climate change, natural disasters, and natural resource depletion. The country’s energy transition is currently driven by increased energy security, technology developments and innovation, improved energy efficiency and conservation, enhanced energy solutions and measures, and modernized energy systems that mitigate and avoid greenhouse gas emissions and reduce risks. Further, the move towards attaining a just energy transition compelled the energy sector, being the cornerstone of sustainable development, to recalibrate its policies, programs, strategies, and measures. Moreover, in the sustainable energy’s perspective, the energy transition in the country does not eliminate the use of fossil fuels but ensures that energy systems are sufficient, provide access for all, and environmental sustainability. Thus, maximizing the gains and benefits from RE resources and technologies increase indigenous energy sources, thus reducing energy import dependency. On the other hand, energy efficiency and conservation reduce energy demand and energy intensity per output of gross domestic product (GDP). All these measures will also result in emission reduction. With this backdrop, the sector will be steered on its path to creating a sustainable future. THE PHILIPPINE ENERGY TRANSITION PROGRAM The Philippine Energy Transition Program (PETP) serves as major component of the blueprint for the country’s commitment to achieve a just energy transition. It is composed of various sector-specific strategies on how to decarbonize the country’s energy system. Under the PETP, deployment of renewable energy (RE) projects will be accelerated, putting offshore wind (OSW) development at the forefront towards the achievement of our renewable energy targets. Cognizant to this is the building and expansion of necessary port infrastructure to support OSW and other marinebased energy resource development projects such as floating solar, ocean and tidal energy. To accommodate and manage the entry of additional renewable energy capacity, the DOE is looking that the modernization of the grid through the roll-out of the Smart Green Grid Project (SGGP). The SGGP will ensure that grid integrity and reliability is maintained amidst the rapid expansion of the grid to accommodate new sizeable RE capacity and connect demand centers with new sources of supply. On conventional energy sources, the PETP also aims to promote voluntary retirement and repurposing of existing CFPPs. Equally important under the PETP is the incorporation of plans to decarbonize the transportation sector, primarily through increased utilization of electric vehicles (EVs). Lastly, continuous promotion of Energy Efficiency and Conservation (EEC) measures will be pursued under the PETP, through energy performance standards and labeling, as well as methods like demand-side management in both government and private sector organizations. 95 Philippine Energy Plan