=== pep-2023-2050-vol2-section-f2-page-105.pdf === Figure 22. Supply Roadmap Short Term Medium Term 2023-2024 Supply 2025-2028 • Implement RCOA in Mindanao • Implement Retail Aggregation in Luzon, Visayas, and Mindanao • Comprehensive Review of the Retail Rules (switching and disconnection); • Amendments to WESM and Retail Rules and Manual regarding Implementation of the Electric Retail Aggregation Program • Adopt lower thresholds for RCOA in Luzon, Visayas, and Mindanao • Continuing review of retail rules and manuals • Develop policy for enhanced and digitized customer switching procedure Long Term 2029-2050 • Further lowering of the RCOA threshold up to the household level • Continuing review of retail rules and manuals • Implement digitized customer switching procedure 2050 OBJECTIVE Transparent and fair playing field in the power industry Electricity Market Wholesale Electricity Spot Market (WESM). The electricity market in the country started its operation in 2006 for Luzon and in 2010 for Visayas. Currently, the five-minute trading interval is being implemented from the previous onehour interval, and this was adopted in June 2021 in adherence to DC2021-06-0015115. With Luzon and Visayas WESM already in place, preparations have been undertaken to establish the market in Mindanao. The presence of the electricity market in all main grids supports the sector’s goal of “one grid, one market.” WESM Mindanao. The commercial operation of WESM Mindanao commenced on 26 January 2023. Its ceremonial launch was attended by President Marcos, Jr. on 6 February 2023 at the Malacañang Palace. Prior to its operation, the DOE issued DC2022-12-0039 titled Declaring the Commercial Operation of the Wholesale Electricity Spot Market in the Mindanao Grid on 23 December 2022, and it stated WESM Mindanao’s commercial operation date by 26 January 2023. Some of the Circular’s salient provisions include: a) relaxed dispatch conformance standards in Luzon, Visayas, and Mindanao for the first three months; b) submission of the WESM registration hard requirements; c) compliance with real-time monitoring requirements and scheduling of generators; d) relaxed prudential requirements in Mindanao for the first three months; and e) specified the responsibilities of the NEA, PSALM, WESM Governance Arm, Market Operator (MO), SO, and Network Service Providers. 115 “Declaring the Commercial Operations of the Enhanced Wholesale Electricity Market Design and Providing Further Policies” issued on 25 June 2021. Vo l u m e 2 95 === pep-2023-2050-vol2-section-f2-page-106.pdf === WESM Participants. As of October 2023, the WESM in Luzon, Visayas, and Mindanao has a total of 433 registered participants – 202 generation companies, 178 customers (25 private DUs, 99 ECs, and 54 directly connected customers), 37 ancillary service providers, and 16 metering service providers (Table 47). During the reporting period, 32 new participants entered the market, consisting of 18 ancillary service providers, 11 generation companies, two (2) directly connected customers, and one (1) metering service provider. Table 47. Registration Update in Luzon, Visayas, and Mindanao WESM (October 2023) Registered Category Total Direct Indirect Service Providers LUZ VIS MIN LVM LUZ VIS MIN LVM LUZ VIS MIN LVM 202 109 48 40 4 1 0 0 0 - - - - 25 11 6 4 0 4 0 0 0 - - - - Electric Cooperatives 99 34 28 25 0 9 0 3 0 - - - - Directly Connected Customers 54 6 3 4 1 28 5 7 0 - - - - Total Customer Trading Participants 178 51 37 33 1 41 5 10 0 - - - - Ancillary Service Provider 37 17 11 8 1 0 0 0 0 - - - - Metering Service Providers 16 - - - - - - - - 4 0 11 1 433 177 96 81 6 42 5 10 0 4 0 11 1 Generation Companies Customers Private DUs & Local Government Utilities Total Participants From May to October 2023, customer spot market transactions in Luzon, Visayas, and Mindanao averaged 1,576.3 GWh. Of this total, 67.0 percent was allocated to Luzon, 21.5 percent to Visayas, and 11.5 percent to Mindanao. Generator payments in Luzon decreased by 12.3 percent, dropping from PhP8.2 billion in May to PhP7.2 billion in October 2023. Similarly, generator payments in Visayas decreased by 22.0 percent from PhP3.6 billion in May to PhP2.8 billion in October 2023. Meanwhile, in Mindanao, generator payments surged by 80.2 percent from PhP688 million in June to PhP1.2 billion in October 2023. Furthermore, the Net Effective Spot Settlement Price for generators averaged PhP6,408.3 per MWh, while the Effective Spot Settlement Price for customers averaged PhP6,613.8 per MWh. The various policies issued in line with WESM amendments are reflected in Table 48. 96 Philippine Energy Plan === pep-2023-2050-vol2-section-f2-page-107.pdf === Table 48. Promulgated DCs on WESM Amendments DC No. Title Date Issued 2023-08-0024 Adopting Further Amendments to the Wholesale Electricity Spot Market Manual on Billing and Statement 2 August 2023 2023-07-0023 Adopting Further amendments to the Wholesale Electricity Spot Market Rules and Market Manuals (Provisions on Penalty Framework for Test and Commissioning) 20 July 2023 2023-01-0004 Adopting Amendments to the WESM Rules, Retail Rules and Various Market Manuals, and Promulgation of the Retail Manual on the Procedures for the for the Implementation of GEOP 31 January 2023 2023-01-0003 Adopting Further Amendments to the Wholesale Electricity Spot Market Rules, WESM Manual and Retail Manual on Validation Timeline Adjustment in Metering and Billing 12 January 2023 2023-01-0001 Adopting Further Amendments to the Wholesale Electricity Spot Market Manuals for Improvements to The Market Resource Modelling and Monitoring 11 January 2023 2022-12-0039 Declaring the Commercial Operation of the Wholesale Electricity Spot Market in the Mindanao Grid 23 December 2022 2022-12-0038 Adopting Further Amendments to the Wholesale Electricity Spot Market Manual on the Guidelines Governing the Constitutions of the PEM Board Committees 21 December 2022 2022-11-0033 Adopting Further Amendments to the Wholesale Electricity Spot Market Rules and Market Manuals for the Implementation of Reserve Market 5 October 2022 2022-06-0029 Providing Policies for the Market Operator Performance Standards 20 June 2022 2022-06-0025 Adopting Further Amendments to the Wholesale Electricity Spot Market Manual on Billing and Settlement 20 June 2022 2022-06-0024 Adopting Further Amendments to the Wholesale Electricity Spot Market Rules and its Market Manual on Constraint Violation Coefficients (CVC) and Pricing Re-Runs (PR) 20 June 2022 2022-06-0023 Adopting General Amendments to the WESM Rules and Various Market Manuals on the Enhancements to Market Operator and System Operator Procedures 20 June 2022 2022-06-0022 Adopting Further Amendments to the Wholesale Electricity Spot Market Manual on Registration, Suspension and De-Registration Criteria and Procedures (RSDCP) 20 June 2022 2022-06-0021 Adopting Further Amendments to the Wholesale Electricity Spot Market Rules and Market Manual on Dispute Resolution Administration (DRA) 20 June 2022 2022-03-0012 Adopting Further Amendments to the Wholesale Electricity Spot Market Rules, Retail and Market Manual (Provisions for Audit and Performance Monitoring) 25 March 2022 2022-03-0011 Adopting Further Amendments to the Wholesale Electricity Spot Market Rules and its Market Manual on Information Disclosure and Confidentiality (Exceptions for Confidentiality Undertakings for DOE and ERC) 22 March 2022 2022-03-0010 Adopting Further Amendments to the Market Manual on Registration, Suspension and De-Registration Criteria and Procedures to clarify Bilateral Contracts Accounted for in Settlements 17 March 2022 2022-03-0009 Adopting Further Amendments to the Wholesale Electricity Spot Market Rules and WESM Registration Manual (Provision for De-Registration and Cessation of Registration) 17 March 2022 2022-03-0003 Adopting Further Amendments to the Wholesale Electricity Spot Market Rules and its Market Manual on Billing and Settlement for the Implementation of Enhancements to WESM Design and Operations 3 March 2022 Plans and Programs Full commercial operation of WESM Mindanao. The issuance of DC2022-12-0039 set WESM Mindanao’s commercial operation date on 26 January 2023. As stipulated in the Circular, all trading participants (TPs) with pending requirements are deemed registered provided that full compliance is in effect not later than 25 April 2023. Given the timeline, there are still TPs which have not completed registration in the WESM based on the report received from the MO in April 2023. In response, the DOE issued an Advisory116 on 27 April 2023 extending the relaxation of submission of requirements until 25 June 2023. With the assumption that all TPs complete and comply with the requirements, the short-term action plan is having the WESM Mindanao in full commercial swing by 2023. 116 Advisory on the “Extension on the Implementation of Sections 4 and 5 of DC2022-12-0039” issued and posted in the DOE website on 27 April 2023 Vo l u m e 2 97 === pep-2023-2050-vol2-section-f2-page-108.pdf === Figure 23. Electricity Market Roadmap Short Term Medium Term 2023-2024 Electricity Market 2025-2028 • Full commercial operation of the WESM in Mindanao • Commercial operation of the initial Reserve Market (Phase 1) • Policy Support to Renewable Portfolio Standard Compliance; • Study Electricity Derivatives Market (Contracts for differences) • Implement the Enhanced Reserve Market (Phase 2) • Implement Electricity Derivatives Market (Contract for Differences) • Continuous improvement of Market design and rules • Study market design to allow higher RE penetration and EV Demand Response Long Term 2029-2050 • Continuous improvement and enhancement of the design and rules of the electricity market • Enhance market design to facilitate integration of RE and EVs in the electricity market. 2050 OBJECTIVE Transparent and fair playing field in the power industry Commercial operation of the initial Reserve Market (Phase 1). The Ancillary Service (AS) policy that is already in place touched on the co-optimization of energy and reserves in the WESM through the Reserve Market (RM). The DOE, in its Advisory dated 26 June 2023, directed the MO for the Trial Operations Program (TOP) of the RM. The successful conduct of TOP by the MO, SO, and WESM participants is one of the conditions for the commercial operation of the RM apart from the ERC’s approval of the price determination methodology (PDM). The Advisory also clarified that the TOP is a non-binding exercise for the RM participants, meaning that the results shall not be used commercially for scheduling, dispatch, settlement, and cost recovery. With the issuance of DC2023-09-0026117, the RM is targeted to be fully operational by 26 March 2024. The operation of the RM in the short-term (2023-2024) is deemed to be its initial phase and plans to further enhance the market are to be conducted in the medium-term (2025-2028). Policy support to RPS Compliance. The Renewable Energy Market (REM) is viewed to encourage compliance of power industry participants with the mandated Renewable Portfolio Standard (RPS) obligation. Among the objectives of the REM is to establish a fair and transparent market for the trading of RE Certificates (RECs), equivalent to an amount of power generated from RE resources. The REM is under interim commercial operations with the issuance of DC2022-06-0019 and there are already 265 participants as of July 2023. Study Electricity Derivatives (Contracts for Differences). An ongoing study is being undertaken by IEMOP on Electricity Derivatives Market (EDM) specifically Contracts for Difference (CfD). A contract for difference refers to a contract between a buyer and a seller wherein the buyer must pay the seller the difference between the current value of an asset and its value at the time of contract. Its advantages are access to the underlying asset at a lower cost than buying the asset outright, ease of execution, and the ability to go long or short.118 One of the countries that adopted CfD is the United Kingdom which introduced it in October 2014. It was designed to support deployment of large scale RE projects which are more than five MW. The CfD is based on the difference between the market price and an agreed strike price119. If the strike price is higher than the market price, the CfD counterparty pays the RE generator the difference between the strike and market price. If the market price is higher than the agreed strike price, the RE generator pays back the CfD counterparty the difference.120 Based on the PEMC Study in 2020, establishing the regulatory and market structure for the EDM in the Philippines must take into consideration existing legislation and legal challenges. Currently, only banks and insurance companies are authorized to deal in derivatives in “over-the-counter” markets. The Bangko Sentral ng Pilipinas (BSP) authorizes banks to trade derivatives particularly interest rate and foreign exchange-based derivatives. Similarly, the Insurance Commission authorizes qualified insurance companies to engage in derivative transactions but only with banks also. To date, only equity, interest rate, and currency derivatives are known to be traded in the Philippines.121 “Declaring the Commercial Operations of the Reserve Market and Providing Further Policies” issued on 26 September 2023 Source: https://www.investopedia.com/articles/stocks/09/trade-a-cfd.asp Strike Price is the fixed price a generator will earn per MWh of electricity generated for the lifetime of the contract 120 Source: https://www.iea.org/policies/5731-contract-for-difference-cfd 121 PEMC. Nord Pool Legal Memorandum Executive Summary. March 2020. Available at https://www.wesm.ph/library/downloads/viewdownload/documents/other-documents/electricityderivatives-ma 117 118 119 98 Philippine Energy Plan === pep-2023-2050-vol2-section-f2-page-109.pdf === Implement enhanced Reserve Market (Phase 2). In the medium-term, the succeeding action plan to be undertaken after the RM’s commercial operation is Phase 2. Specifically, this refers to integrating all enhancements in the RM (i.e., classification of reserves, technical specifications) including the amendment of the WESM rules and Market Manuals. Implement Electricity Derivatives Market (Contracts for Differences). The EDM’s implementation serves as an avenue for market participants to secure their additional power supply requirements. It will also promote further competition and function as catalyst for enticing investments in power supply generation. Implement Capacity Market. The DOE in its effort to attain sustainability, reliability, and security in the power sector, proposed an Independent Impact Assessment of the costs and benefits of the proposed establishment of a Philippines Capacity Market. The opening of a new market other than the energy market will also support the government’s initiatives on the transition to sustainable and clean energy. A capacity market adds another layer to a wholesale market, and they exist to increase the certainty that there will be enough electricity supply to meet expected demand based on the forecast. The market works with generators and retail electric providers in determining how much electricity supply is needed in the future but relies on market forces to incentivize generators to build and maintain generation to meet long-term demand needs. Continuous improvement and enhancement of the design and rules of the electricity market. As dynamic changes occur in the power industry, enhancing the market design as well as the rules ensures that it will support the overall objective of a transparent and fair playing field. Correspondingly, the refinement of rules and design implies being mindful of the market’s needs to synchronize with the recent policy updates. Off-Grid Development Missionary electrification is indispensable in the government’s pursuit for attaining total electrification. The DOE is keen to continuously develop critical policies, pioneer initiatives, and form strategic measures to demonstrate commitment in ensuring reliable and cost-efficient electricity access that is seen to usher inclusive development in unserved and underserved areas in the country. Parallel to the comprehensive electrification agenda, efforts to improve the economic viability of missionary regions are carried out through the implementation of island interconnection projects embodied in the TDP 2022-2040. This aims to facilitate the sharing of excess capacity to prevent supply shortages, increase the electrification rate in far-flung communities, and reduce reliance on traditional fossil fuel-based for island power generation. Graduation and rationalization of the Universal Charge for Missionary Electrification (UC-ME) subsidy. The issuance of DC2022-05-0016 titled “Adopting and Integrating the Policies and Programs for the Graduation and Rationalization of the Universal Charge for Missionary Electrification Subsidy” on 24 May 2022 prescribes customer level rationalization of the UC-ME within off-grid areas. Specifically, the Circular is guided with the following objectives: a. b. c. d. e. f. g. Empower the DUs/ECs in off-grid areas to formulate plans and programs for the rationalization of UC-ME subsidy in their franchise areas; Incorporate the interconnection plan to the grid in the UC-ME subsidy rationalization plans and programs of the DUs/ECs in off-grid areas; Institutionalize least-cost generation planning to enable entry of low-cost generation technologies in small grids and off-grid power systems; Encourage distribution utilities to promote and practice energy efficiency and conservation measures in off-grid areas; Optimize the recovery of cost of electricity services through innovative tariff mechanisms that reflect the capacity to pay of the electricity end-users; Set the timeline for the reduction of UC-ME subsidy in consideration of the actual and foreseen socio-economic conditions of the consumers in off-grid areas; and, Harmonize the policies and regulations with respect to the setting of tariffs and subsidies in offgrid areas. Vo l u m e 2 99 === pep-2023-2050-vol2-section-f2-page-110.pdf === The formulation of the Circular meant reviewing all pertinent policies and requesting for valuable inputs from stakeholders through a series of FGDs and public consultations. Under this policy, the TransCo and NEA are tasked with crafting a comprehensive 10-year graduation and rationalization plan, which shall outline the socially acceptable reduction and potential phase out of UC-ME subsidy. TransCo as the Small Island Grid System Operator (SIGSO). A significant step has been taken by TransCo when it entered into a Memorandum of Agreement (MOA) with various off-grid ECs – Palawan Electric Cooperative (PALECO), Occidental Mindoro Electric Cooperative (OMECO), and Oriental Mindoro Electric Cooperative (ORMECO) - to operationalize the DC2021-11-0039, which designates the agency as the SO for off-grid power systems that have two or more suppliers. In August 2023, TransCo commenced its stand-alone system operation in Mindoro Grid and is currently conducting capacity building activities for the ECs in the province. This strategic effort intends to enhance the capabilities and competencies of the ECs for a stronger and more resilient energy infrastructure in Mindoro. Publication of the Missionary Electrification Development Plan (MEDP). Guided with the goal of ensuring quality, reliable, secure, and affordable electricity services in unelectrified and off-grid areas in the country, the DOE published the MEDP 2021-2025 on 17 February 2023. The plan spells out the government strategies in increasing access to sustainable energy in missionary areas, integrates the submission from industry players and concerned stakeholders, and aligns with the EPIRA objectives for missionary and off-grid areas. Additional financing for National Power Corporation. To ensure uninterrupted power service delivery in the off-grid areas, the government is actively addressing the NPC’s funding gaps. In relation to this, the President has authorized a credit loan facility amounting to PhP5.0 billion with LBP, and there are efforts to secure an additional PhP10.0 billion short-term loan credit facility with the LBP122, in coordination with the Department of Finance (DOF) and DOE. The requested additional funding will cater to the needs of NPC, as well as for the NPPs for the continued electricity provision in the off-grid areas. Additionally, the ERC has recently given the green light to two of the NPC’s UC-ME True-up petitions totaling around PhP4.8 billion. Likewise, in a bid to address the impact of soaring fuel prices, the NPC is developing a comprehensive long-term sustainability plan, which includes expediting the hybridization of SPUG power plants with RE sources. Addressing the Occidental Mindoro power crisis. The power crisis in Occidental Mindoro has been a lingering issue for decades, severely impeding the progress of the province and deeply affecting the lives of its residents. On 20 April 2023, the crisis reached a critical point necessitating the declaration of a State of Calamity. During this period, the province could only be provided a mere four (4) hours of electricity daily due to significant shortage in power supply. With a daily power demand of about 29 MW, the Occidental Mindoro Consolidated Power Corporation (OMCPC), the lone power supplier of the province, could only then supply up to 12 MW primarily attributed to the OMCPC’s failure to secure provisional authority application for one of its three power plants. To address this, the DOE and NEA intervened and directed the OMCPC to operate all its power plants at a capacity of 30 MW. Further, the province has alternative power sources, including the 1.07-MW biomass power plant operated by the Pag-Asa Renewable Energy Corporation and a 5-MW power plant owned by Power Systems, Inc. Looking ahead, the DOE is committed to implement measures in enhancing the province’s power supply, which includes conducting CSP, with a particular emphasis on prioritizing RE sources. Plans and Programs As part of the government’s thrust to foster inclusive development throughout the country, the DOE is actively pursuing initiatives that accentuate the enhancement of service delivery and expanding electricity access in remote and small islands that remain isolated from the main power grid. Within the planning horizon, the DOE will also push for strategic actions to include the rationalization and graduation from the UC-ME subsidy, modernization of off-grid power systems and operations through the deployment of smart grids and hybrid solutions, and the interconnection of off-grid islands to the national power grid. 122 100 The NPC was able to secure the approval on the additional PhP10 billion loan on 5 October 2023. Philippine Energy Plan === pep-2023-2050-vol2-section-f2-page-111.pdf === Figure 24. Off-Grid Development Roadmap Short Term 2023-2024 Off-Grid Development • Monitor and assess the implementation of the Omnibus Policy, Small Grid SO Policy • Implement graduation and rationalization of UC-ME subsidy Policy • Review and develop policy on the modernization of off-grid power systems and operation • Increase utilization of RE resources for power generation and hybridization • Encourage consumers to utilize RE for nonpower productive application Medium Term Long Term 2025-2028 • Interconnections of Batangas-Mindoro; Quezon-Marinduque; CatanduanesCamarines Sur; Palawan-Mindoro • Study intraconnection of off-grid islands • Enhance graduation and rationalization of UCME Subsidy system • Continuous modernization of off-grid power system and operation 2029-2050 • Implement viable intraconnection of off-grid island 2050 OBJECTIVE Electricity access for all SHORT-TERM Monitor and assess the implementation of the Omnibus Policy and Small Grid System Operator (SGSO) policy. The introduction of the Omnibus Policy123 on 25 January 2019 laid out the overall framework for advancing off-grid development by streamlining existing legislations, governing policies, and extensive strategies, plans, and programs to enhance electric power services in missionary areas. Key components of this effort include, among others, connecting off-grid islands to the main grid through inter- and intra-connection transmission projects, ensuring adequate capacity across small island grids, optimizing generation planning for improved operational efficiency, and rationalizing electricity tariffs and the removal of the UC-ME subsidy to the benefit of all electricity consumers. Relatedly, the SGSO Policy124 which designated TransCo as the SO in off-grid areas with multiple power suppliers aimed to optimize the operations and administration of off-grid power systems. This is to establish the systematic control and efficient dispatch of power supply sources leading to improved electricity service and reduced electricity costs and subsidies to the end-users. In line with this, the DOE will continue to oversee, evaluate, and refine standing policies to ensure that these remain effective and adaptable to the distinct needs of the off-grid areas. Such include updating the MEDP to incorporate new policies, programs, and strategies, along with the integration of the DDP of the DUs, the NPC’s Missionary Electrification Plan, as well as RE and energy efficiency targets. The DOE will develop an off-grid power monitoring system to improve data management and analysis, including the regular conduct of capacity building activities, planning workshops, and dialogues with the off-grid DUs, LGUs, and other stakeholders to support these goals. Implement graduation and rationalization of UC-ME subsidy policy. Forming part of the government’s initiative to ease the financial burden of rising electricity costs to consumers is the enforcement of the UC-ME subsidy rationalization and graduation policy. The primary approach for the subsidy rationalization involves capacitating DU’s serving off-grid areas to prepare a UC-ME Subsidy Rationalization Plan. The rationalization plan outlines the specific actions to be taken by the DUs and local power stakeholders to effectively manage and optimize the use of the UC-ME subsidy within their franchise area. Subsequently, the UC-ME rationalization plan will become an integral component of the DDP and PSPP of the off-grid DUs, which are annually submitted to the DOE. The strategies for subsidy rationalization encompass several key components which are: a) connecting small islands to the primary grid; b) promoting the integration of RE and emerging technologies; c) prioritizing the provision of subsidies to marginalized consumers; and e) implementing energy efficiency and conservation programs at the consumer level to avert the high generation costs in off-grid areas. Review and develop policy on the modernization of off-grid power systems and operation. This initiative seeks to improve the efficiency, reliability, and resiliency of the existing energy infrastructure by employing innovative technologies and integrating sustainable energy sources. To realize this vision, the DOE is set to develop a policy for the upgrading and modernization of island power grids. This policy advocates for the adoption and deployment of advanced technologies, such as smart grid systems and information and communication technology (ICT) solutions geared towards enhancing the delivery of electricity services to remote islands, while optimizing the performance of off-grid power systems. 123 124 DC2019-01-0001 titled “Prescribing the Omnibus Guidelines on Enhancing Off-Grid Power Development and Operation”. DC2021-11-0039 titled “Mandating the National Transmission Corporation as Small Grid System Operator in Specific Off-Grid Areas” issued on 9 November 2021 Vo l u m e 2 101 === pep-2023-2050-vol2-section-f2-page-112.pdf === Increase utilization of RE resources for power generation and hybridization. Recognizing that a sizeable portion of the country’s missionary areas continue to rely heavily on oil-based fuels, these small islands and isolated grids are extremely susceptible to price volatilities in the world energy market, contributing to higher generation costs of electricity. To address this concern, the DOE is firmly encouraging the increased utilization and deployment of RE technologies for off-grid power generation. By tapping into these clean energy sources, off-grid communities can reduce their dependence on oil for power generation. To complement this effort, both the DOE and NPC will push for the integration of hybrid systems by combining multiple RE sources with energy storage solutions and oil-based generators, which is seen to improve energy supply sufficiency, reliability, and sustainability in off-grid areas. This strategic move towards a clean and hybridized energy system enables the country to achieve its broader objectives under the CES of this PEP. Encourage consumers to utilize RE for non-power productive application. Aside from generating electricity, indigenous energy from renewable sources may also be used productively for heating, drying, and cooling purposes, which can be tapped across a range of industries. To maximize the advantages of harnessing these clean energy technologies, the DOE has been promoting the wider use of RE for non-power applications. This creates opportunities for the expanded use of renewables (e.g., solar and wind) for post-harvest facilities in the agri-fishery sector, especially in rural parts of the country where farming, fishing, aquaculture, and livestock production are the primary sources of income for the locals. MEDIUM-TERM Interconnection of Camarines Sur–Catanduanes, Batangas–Mindoro, Quezon–Marinduque, and Palawan– Mindoro. Interconnecting off-grid islands to the main grid is one of the most effective strategies for phasing out the UCME subsidy. Among the smaller islands that are programmed for interconnection to Luzon grid include Catanduanes, which can be linked to Camarines Sur; Mindoro Island via Batangas; Marinduque to Quezon; and Palawan, benefiting from a connection point from Mindoro. The DOE will constantly monitor the implementation of these interconnection projects and steer NGCP to expedite their completion. 102 • The Camarines Sur-Catanduanes 69-kV Interconnection Project (CCIP) will connect Catanduanes to the main grid via Camarines Sur, providing reliable and cost-effective power generating sources. The CCIP has been filed with the ERC on 09 June 2022 under ERC Case No. 2022-044 RC and is currently awaiting approval from the Commission. The project is expected to be completed by December 2030. • The Batangas-Mindoro Interconnection Project (BMIP) is a priority investment in the NGCP’s TDP 2022-2040. The project aims to connect Mindoro Island with the Luzon grid through Batangas, thereby providing access to bulk generation sources and enabling the potential export of surplus electricity. The planned interconnection will involve linking the Pinamucan 500-kV Substation in the Luzon grid with Calapan serving as the connection point in Mindoro Island. On 23 November 2022, the ERC granted approval for the project under ERC Case No. 2021-051 RC, with completion date by September 2027. The NGCP recently announced an accelerated timeline targeting the project completion by 2025. • The Quezon-Marinduque Interconnection Project (QMIP) aims to address the long-term development needs of Marinduque and improve the energy mix of the province by gaining access to more reliable and competitive power generation sources from the Luzon grid. On 08 July 2021, the proposed project was filed by the NGCP under ERC Case No. 2021-049 RC. With the project still pending regulatory approval, the NGCP is aiming for its completion by December 2030. • The Palawan-Mindoro Interconnection Project (PMIP) is a two-stage initiative focused on enhancing power supply reliability and addressing power quality issues within Mainland Palawan. Additionally, the PMIP is designed to position the country for future interconnections with other ASEAN Member States (AMS), aligning with the vision of the ASEAN Power Grid (APG) outlined by the Heads of ASEAN Power Utilities/Authorities (HAPUA). This initiative also complements regional efforts for power grid interconnection, particularly within the framework of the Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA). On 18 March 2019, the NGCP filed the application for the PMIP Stage 1 through ERC Case No. 2019-022 RC. As the project currently awaits approval from the ERC, the NGCP has set its sights on achieving project completion by February 2033. Philippine Energy Plan === pep-2023-2050-vol2-section-f2-page-113.pdf === Study intra-connection of off-grid islands. In addition to off-grid interconnection, the government is likewise exploring the feasibility of intra-connection among distant islands to enable the sharing of excess power generation. The DOE, in collaboration with TransCo, is poised to undertake comprehensive studies to assess the viability of intra-island power connections. This will be done by extending electricity access from small island and stand-alone grids to nearby islets using submarine power cables. Enhance graduation and rationalization of UC-ME subsidy system. The enhancement of the UC-ME graduation and rationalization policy is one of the continuing measures that will be pursued by the DOE throughout the medium-term planning horizon. This involves performing a comprehensive review and assessment of the UCME subsidy program to warrant the effectiveness of the policy mechanism. As part of this endeavor, the DOE will actively support NPC in formulating effective strategies for administering the UC-ME subsidy. Parallel to this, the DOE will collaborate closely with NEA and ERC in updating the individual UC-ME Rationalization Plans of the off-grid DUs. Continuous modernization of off-grid power system and operation. In an effort to sustain efficient operations of the entire power system, the Department will continue to encourage all DUs, including off-grid ECs, to initiate the upgrading and modernization of their existing facilities and infrastructure towards building a smart and resilient distribution system. The DOE and NEA will proactively engage with the DUs to ensure the seamless integration of CAPEX programs into their DDPs. Likewise, the DOE will strengthen its partnership with ERC to secure regulatory support to facilitate the timely approval and implementation of the proposed CAPEX projects. LONG-TERM Implement viable intra-connection of off-grid island. An overarching priority to promote off-grid power development in the long-term is the implementation of viable intra-connection projects. The DOE is committed to support off-grid ECs by providing strategic policy directions, to include other support mechanisms, such as securing regulatory approval, facilitating access to financing, leveraging government subsidies and incentives, as well as streamlining of permitting procedures. Total Electrification Electricity access, one that has long been a priority of the government, is always associated with the improvement of quality of life especially in remote and far-flung areas. By 2028, the energy sector envisions every household in the country to benefit from having access to electricity services. The commitment to expanding electricity access demonstrates it as a necessity that empowers communities and stimulates economic growth. The realization of total electrification requires a whole-of-government approach and innovative collaboration to surmount challenges in the implementation of the various electrification programs. This also calls for united and unwavering effort of the DOE, NEA, NPC, and DUs/ECs. Household Electrification Status. Looking at the national level, the country’s household electrification increased to 96.2 percent in 2022 from the 95.4 percent recorded in 2021. Accordingly, 25.91 million Filipino households have already been energized, while 0.88 million households are yet to be provided with electricity services (Figure 25). Figure 25. Household Electrification, 2021-2022 2021 Vo l u m e 2 2022 103 === pep-2023-2050-vol2-section-f2-page-114.pdf === The country’s household electrification rate varies by grid (Table 49). Of the three (3) major island groups, Luzon registered the highest electrification level at 98.9 percent with 16.1 million households energized, followed by Visayas at 97.6 percent with 4.8 million households given access to electricity services. Mindanao is currently lagging at 88.1 percent with approximately 5.0 million households energized and more than 0.6 million households yet to be energized. Table 49. Household Electrification by Grid (as of December 2022) Potential HHs* Served HHs Unserved HHs per DU/ Province** Electrification Level (%) Luzon 13,318,261 16,092,459 148,435 Visayas 4,401,698 4,834,595 105,110 98.89 97.61 Mindanao 5,265,012 4,987,019 625,687 88.12 Philippines 22,984,971 25,914,073 879,232 96.17 Note. *Potential HH based on 2015 PSA Census ** Unserved HHs is the actual unserved HH from the DUs/ECs National Total Electrification Roadmap (NTER) 2023-2032125. The NTER primarily consolidates and rationalizes the government’s initiatives, interventions, and strategies in bringing sustainable electricity services to unserved and underserved areas throughout the country. As reflected in the NTER, the electrification level as of June 2023 is at 91.2 percent with 25.3 million households with electricity access compared to the potential 27.7 million households (Table 50).126 By end of 2023, the outlook for the country’s electrification level reaches 93.1 percent as the target number of households to be energized for the remaining half of the year is at 0.54 million households bringing the total households energized to 25.8 million (Table 51). Table 50. Household Electrification as of June 2023 (based on NTER) Potential Served Unserved Electrification Level Luzon 16,415,201 15,800,632 614,569 96.26 Visayas 5,161,182 4,612,844 548,338 89.38 Mindanao 6,150,849 4,859,912 1,290,937 79.01 Philippines 27,727,232 25,273,388 2,453,844 91.15 Table 51 Household Electrification by December 2023 (based on NTER) Potential Households to be Served Served Unserved Electrification Level Luzon 16,415,201 123,711 15,924,343 490,858 97.01 Visayas 5,161,182 192,427 4,805,271 355,911 93.10 Mindanao 6,150,849 220,375 5,080,287 1,070,562 82.59 Philippines 27,727,232 536,513 25,809,901 1,917,331 93.09 Enactment of the Microgrid Systems Act of 2022. The signing into law of RA 11646 or the Microgrid Systems Act (MGSA) of 2022 on 24 January 2022 is intended to bolster the government's efforts toward total electrification by promoting the use of microgrid systems in both unserved and underserved areas. Its goal of accelerating total electrification also includes areas without electricity access, distribution lines, home power systems, orareas receiving less than 24 hours of electricity services. Likewise, the law provides the regulatory framework for the development and operation of microgrid system, thusensuring its safety, reliability, and efficiency. The NTER was published on 27 October 2023. The glaring difference with the December 2022 household electrification level is attributable to the household baseline considered for arriving at the electrification level as the NTER adopted the 2020 Census of Population and Housing (CPH). 125 126 104 Philippine Energy Plan === pep-2023-2050-vol2-section-f2-page-115.pdf === The MGSA’s issuance is seen to promote private sector participation in electrification as it provides a competitive environment and level playing field for various kind of energy resources to be utilized with preference for lowcost, indigenous, renewable, and environment friendly. Under the said Act, those qualified to apply as a microgrid system provider (MGSP) are private corporations, local government units (LGUs), cooperatives, non-government organizations, generation companies and their subsidiaries, and DUs and their subsidiaries capable and willing to comply with the technical, financial, and other requirements through CSP. The declaration of unserved and underserved areas to be offered to the MGSP are classified into three: a) DOE – declared; b) DU – identified; and c) unsolicited proposals. All prospective MGSPs for the identified areas are required to undergo CSP and will be deemed successful upon receipt of at least one bid. In instances that there are no interested participants or a failed CSP, the NPC and DU shall continue to energize the area until a contract for the MGSP is awarded in the next CSP for the DOE declared and DU identified areas, respectively. On the other hand, the MGSP proponents can also submit unsolicited proposals subject to Swiss challenge of interested third parties. The corresponding IRR of the MGSA was issued on 24 May 2022 through DC2022-05-0017. Creation of the Total Electrification Steering Committee (TESC). Recognizing the need for a resolute committee to supervise the implementation of various electrification plans and programs, the DOE issued DO 2022-12-0016127 on 21 December 2022. The TESC is mandated to act as the oversight body in formulating and consolidating various programs and activities in the provision of electricity to the unserved and underserved areas identified by the DUs and other responsible entities. The DOE chairs the TESC with members composed of NEA, NPC, and TransCo. Communication Initiatives. The DOE conducted IEC campaigns to roll out MGSA’s implementation including its IRR. These activities were also supported by a series of workshops for the DUs on the local total electrification roadmap (LTER) template in collaboration with the NPC and NEA. The template includes the 10-year Electrification Master Plan of the DUs and the list and inventory of all unserved households and/or underserved areas within their respective jurisdictions targeted for electrification. To better equip the DUs in the use of the LTER, the workshop also detailed the data requirements, guidelines in filling out the template, and the submission protocol. TOTAL ELECTRIFICATION PROJECTS Grid-Connected Sitio Electrification Program (SEP). The SEP is a government initiative that serves as the primary component of the broader efforts toward equitable development and ensuring that even the most remote sitios of the country have access to essential services and opportunities. It contributes to bridging the gap between urban and rural areas, fostering overall socioeconomic progress in the country. As of November 2023, the NEA already energized 1,006 out of its targeted 1,085 sitios for the year. To further accelerate its electrification efforts, the NEA committed to energize the remaining sitios earmarked for the year. Looking ahead, the NEA targets to energize 10,535 sitios by the end of President Marcos, Jr. Administration. 127 Creating the Total Electrification Steering Committee to Accelerate the National Total Electrification Vo l u m e 2 105 === pep-2023-2050-vol2-section-f2-page-116.pdf === Energy Regulations 1-94 (ER 1-94). During the onset of the COVID-19 pandemic, the DOE issued DC2020-04-0008128 enabling the use of the existing ER 1-94 funds for projects intended to contain and mitigate the spread of COVID-19, particularly in the communities hosting energy projects until the lifting of the public health emergency. Without an official extension to the public health emergency from the President and the country’s apparent path to normalcy, the DOE issued an Advisory on 8 May 2023 invoking Section 10 (Sunset Clause) of DC2020-04-0008. The advisory stipulated that the Electrification Fund (EF) component of ER 1-94 is now reverted to its original purpose, which is for the total electrification of the remaining unserved and underserved areas in the country. To compensate and provide for financial benefits to communities hosting energy resources and power generating facilities, the DOE already disbursed 79.2 percent of the available ER 1-94 funds to host communities and beneficiaries, amounting to PhP5.1 billion out of the total PhP6.4 billion. At present, there is approximately PhP1.3 billion of remaining ER 1-94 funds that need to be transferred and remitted, as indicated in Table 52. Table 52. Status of Reconciled vs. Remitted Funds to Host Beneficiaries (as of June 2023) Fund Type Reconciled Available ER 1-94 Fund with DOE (PhP Billion) Disbursed ER 1-94 Fund (PhP Billion) Remaining ER 1-94 Fund (PhP Billion) Disbursed Percentage EF 3.436 2.436 0.9995 70.91% DLF 1.474 1.319 0.155 89.50% RWMHEEF Total 1.516 1.336 0.180 88.12% 6.425 5.091 1.334 79.23% Off-Grid Together with the representatives from various agencies and LGUs, Asst. Secretary Mario C. Marasigan and Director Araceli A. S. Soluta led the distribution of the Portable PV Solar Home Units to the concerned Residents Beneficiaries of Barangay Buenavista in Coron, Palawan Solar Photovoltaic Mainstreaming (PVM). In support of the government’s electrification initiatives particularly for unserved households, the DOE distributed 10,000 units of portable photovoltaic solar home system (PV-SHS) units within the franchise areas of Busuanga Island Electric Cooperative, Inc. (BISELCO), Palawan Electric Cooperative (PALECO), Oriental Mindoro Electric Cooperative, Inc. (ORMECO), Occidental Mindoro Electric Cooperative, Inc. (OMECO) and Agusan Del Norte Electric Cooperative, Inc. (ANECO). The DOE also signed a MOA with the NEA and NPC to implement electrification projects totaling PhP 811 million within the service coverage areas of the ECs and NPC-SPUG. The project’s implementation is under the TEP, one of the DOE’s locally funded projects. Rationalizing the Utilization of Energy Regulations No. 1-94 (ER 1-94) Funds by Host Local Government Units (LGUs) in response to Coronavirus Disease 2019 (COVID-19) Public Health Emergency 128 106 Philippine Energy Plan === pep-2023-2050-vol2-section-f2-page-117.pdf === Figure 26. PV-SHS Installations, LVM The PVM is a joint undertaking by the DOE and the European Union through its Access to Sustainable Energy Programme (EU-ASEP) that aims to accelerate rural electrification through the provisions of SHS to households in remote areas. As of the first half of 2023, more than 69,000 PV-SHS were already installed in remote areas in the country (Figure 26 and Table 53). The NEA is the implementing agency for the PV-SHS installation. Table 53. No. of PV-SHS Installations in the major island grids (June 2023) Total of PV-SHS Luzon 8,251 Visayas 2,667 Mindanao 58,647 Total 69,565 As shown in Figure 27, the implementation of the PVM program was carried out through several funding sources. More than half of the total installations were funded through EU-ASEP (Windows 1 & 2). Figure 27. PVM-SHS Installations per funding sources Source: PVM Dashboard of DOE-EPIMB Table 54. Existing Microgrid Systems Providers (as of June 2023) Area Lahuy Island, Haponan Island in Municipality of Caramoan and Quinasalag Island in the Municipality of Garchitorena, Camarines Sur DU MGSP Installed Capacity Status/Remarks CASURECO IV FP Island Energy Corporation Lahuy Island: 246 kWp Solar + 400 kW Diesel + 79kWh Battery Started Commercial Operations 10 December 2021 Haponan Island: 51.4 kWp Solar + 100 kW Diesel + 19 kWh Battery Quinalasag Island: 331 kWp Solar + 500 kW Diesel + 80kWh Battery Brgy. Cabayugan, Puerto Princesa, Palawan PALECO Sabang Renewable Energy Corporation Hybrid: 1.4 MW Solar + 1.2 MW Diesel + 2.3 MWh Battery Authority to Operate (ATO) 05 October 2016 Brgys. Candawaga & Culasian, Rizal, Palawan PALECO PowerSource Philippines Inc. 268 kW Diesel Interim Relief April 2018 Brgy. Liminangcong, Taytay, Palawan PALECO PowerSource Philippines Inc 108 kW Diesel Provisional ATO issued by ERC, 2016 Malapascua Island, Daanbantayan, Cebu CEBECO PowerSource Philippines Inc 750 kW Operational Permanent ATO 2016 Brgy. Poblacion, Dumaran, Palawan PALECO PowerSource Philippines Inc Hybrid: 132.8 kWp Solar + 144 kW Diesel + 351.1 kWh Battery Interim Relief to Operate July 2022 Brgy. Manamoc, Cuyo, Palawan PALECO PowerSource Philippines Inc 216 kW Interim Relief to Operate July 2022 Brgy. Port Barton, San Vicente, Palawan PALECO PowerSource Philippines Inc Hybrid: 200 kWp Solar + 609.5 kW Diesel + 200 kWh Battery Interim Relief to Operate July 2022 DASURECO PowerSource Philippines Inc 0.71 MW Diesel Started commercial operations 08 June 2022 Balut Island Vo l u m e 2 107 === pep-2023-2050-vol2-section-f2-page-118.pdf === Existing Microgrid System Providers. All existing Qualified Third Parties (QTP) providing alternative services are now referred to as the MGSPs as stipulated under Section 6 of the MGSA. These MGSPs are mandated to carry out the missionary electrification function on behalf of the NPC and provide integrated power generation and distribution services in unserved and underserved areas. All the incentives extended to the QTPs under existing laws not amended or repealed by the MGSA shall remain in full force and effect. Prior to the issuance of the IRR for RA 11646, PALECO conducted a CSP in April 2022 for 63 unserved areas in Palawan, in accordance with Department Circular No. DC 2019-11-0015. As a result, a Notice of Award was given to Maharlika Clean Power Holdings Corporation (MHCPC) in consortium with Clean Grid Partners Pte. Ltd. And WEnergy Global PTE Ltd., with Special Purpose Vehicle – Archipelago Renewable Corporation (ARC) for a total of twelve (12) lots as shown in Table 55. Table 55. QTP Service Areas Awarded to ARC MGSP Service Areas DU Potential HHs MGSP Capacity/ Technology ARC Solar – 151 kWp BSS - 193 kWh Diesel - 83 kW ARC Solar – 227 kWp BSS - 226 kWh Diesel - 112 kW Sto. Tomas, Dumaran PALECO Bohol, Dumaran PALECO Sarong, Bataraza PALECO 448 ARC Solar - 151 kWp BSS - 193 kWh Diesel - 83 kW Taratak, Bataraza PALECO 426 ARC Solar - 227 kWp BSS - 226 kWh Diesel - 112 kW Catalagbak, Quezon PALECO 381 ARC Solar - 227 kWp BSS - 226 kWh Diesel - 112 kW Taburi, Rizal PALECO 1,400 ARC Canipaan, Rizal PALECO 645 ARC Solar - 227 kWp BSS - 226 kWh Diesel - 112 kW Latud, Rizal PALECO 560 ARC Solar - 151 kWp BSS - 193 kWh Diesel - 83 kW Alacalian, Taytay PALECO 631 ARC Solar - 365 kWp BSS - 411 kWh Diesel - 224 kW Bantulan, Taytay PALECO Silanga, Taytay PALECO Caruray, San Vicente Binga, San Vicente 678 Solar - 365 kWp BSS - 411 kWh Diesel - 224 kW Solar - 151 kWp BSS - 193 kWh Diesel - 83 kW Solar - 151 kWp BSS - 193 kWh Diesel - 83 kW 773 ARC PALECO 980 ARC PALECO 351 ARC Solar - 227 kWp BSS - 226 kWh Diesel - 112 kW Solar - 365 kWp BSS - 411 kWh Diesel - 168 kW Solar - 151 kWp BSS - 193 kWh Diesel - 83 kW Solar - 302 kWp BSS - 275 kWh Diesel - 168 kW Plans and Programs The electrification roadmap details the plans and programs to be undertaken over the planning period with the objective of providing electricity access for all. Among the critical deliverables are the full implementation of the MGSA and associated activities, and the continuous improvement of policies and strategies to ensure the effective implementation of the government’s electrification initiatives. SHORT-TERM Publish the National Total Electrification Roadmap (NTER). In accordance with the MGSA-IRR, the DOE is targeting to publish the National Total Electrification Roadmap within the first half of 2023. The NTER is a comprehensive national strategic plan to accelerate the country’s total electrification and a consolidation of the various Local Total Electrification Roadmap (LTER) and DDPs. It will also include the MEDP and to be integrated in the PEP. 108 Philippine Energy Plan === pep-2023-2050-vol2-section-f2-page-119.pdf === Figure 28. Electrification Roadmap Short Term Medium Term 2023-2024 Total Electification Medium - Long Term 2025-2028 • Publish the National Total Electrification Roadmap (NTER) • Conduct the Initial Microgrid System Provider-Competitive Selection Process (MGSP-CSP) • Issue policy on the operationalization of Gridtied Microgrid Systems • Achieve household electrification target rate for 2023 and 2024 based on 2020 Census • Develop and improved electricity access statistics and monitoring system 2029-2050 • Achieve household electrification target rate for 2025-2027 and 100% household electrification target by 2028 • Full implementation of RA 11646 (roll-out of NTER and conduct of MGSP-CSP) • Continuous improvement of electricity statistics and monitoring system • Ensure electricity access to all household in the country • Continuous improvement and enhancements of policies, designs and strategies to ensure electricity access for all households in the country 2050 OBJECTIVE Electricity access for all The NTER 2023-2032 was officially published by the DOE on 27 October 2023. For the period 2024-2028, approximately 3.677 million households would require electricity services – 2.706 million within the franchise area of ECs and 0.971 million within the PIOUs and LGOUs. Table 56. National Level Electrification Targets 2023-2028 (NTER) 2023 2024 2025 2026 2027 2028 Potential Households 27,727,232 27,953,853 28,345,104 28,726,822 29,106,499 Unserved Households 2,453,916 2,143,952 1,836,971 1,280,773 770,270 394,891 Total Households Served 25,809,901 26,508,133 27,446,048 28,336,228 29,092,441 29,487,334 536,585 698,232 937,915 890,180 756,213 394,893 93.09 94.83 96.83 98.64 99.95 100.00 Target Households Target Electrification Level 29,487,334 Conduct the initial Microgrid System Provider – Competitive Selection Process (MGSP-CSP). A CSP for prospective MGSPs will be conducted unless the DOE authorizes the NPC and NEA to do such on its behalf. Under the CSP, the entity will be awarded a contract to deliver integrated power generation and distribution services to an unserved or underserved area through a transparent and competitive procedure, such as but not limited to an auction, unsolicited proposal, or Swiss Challenge, in accordance with the provisions under the MGSA. The initial conduct of CSP for MGSPs is scheduled within the fourth quarter of 2023129. An invitation to bid for the CSP on MGSP covering 98 areas (having a total of 15,645 households) was released by the DOE on 27 October 2023. The prioritization of these areas is based on evaluation in coordination with the DUs, NPC, and NEA. The identified areas also represent 39.0 percent of the total households in unserved and underserved areas, which are viewed to be viable for microgrid systems because of the number of households and density, and demand. Policy on the operationalization of grid-tied microgrid system. In line with the MGSA’s implementation, the DOE is targeting the issuance of a circular that will define the framework for the operationalization of microgrid system connected to the DU’s distribution system. This will enable the operation of grid-tied microgrid system both in synchronized and island mode. Achieve household electrification target rate for 2023 and 2024 based on 2020 Census. Once the updated NTER is finalized, the DOE will release the revised projected household electrification targets based on the 2020 Census of Population. The adoption of a new computation for electricity access rate will be discussed with the TESC to account all forms and initiatives for electrification of unserved households. Anchored on the strategies stipulated under the NTER, the energy sector’s goal is to meet its annual household electrification target in the short-term period. Electricity access statistics and monitoring system. To provide a clearer picture of the country’s electrification situation, the DOE is keen on developing comprehensive electricity access statistics and monitoring system. As an initial step in this undertaking, the DOE recently launched a Microgrid and PVM dashboard, which contains the microgrid system and PVM database, relevant statistics, and a comprehensive listing of existing microgrid and PVM installations. 129 The initial MGSP CSP commenced in November 2023 with the issuance of Notice of Awards expected towards the end of March 2024. Vo l u m e 2 109 === pep-2023-2050-vol2-section-f2-page-120.pdf === MEDIUM-TERM Attain 100 percent household electrification target by 2028. The DOE is targeting to attain total electrification within the current administration’s term. With the policies and programs already in place, the DOE is setting its sight track to achieve 100 percent electrification by 2028 through the provision of electricity access to about 31,143,804130 potential households nationwide. One of the priority areas of the National Government to address the challenge of a relatively low level of electrification is to assist the Bangsamoro Government in expanding electricity access to areas that are still unserved and underserved. Among the regions in Mindanao, the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) recorded the lowest household electrification level at 43.1 percent (as of December 2023), wherein 339,985 out of the potential 789,013 households have access to electricity. The NTER outlines various electrification strategies to be implemented from 2023-2028 to achieve total electrification in BARMM. As complement to the electrification efforts, the government through the NEA continues to seek ways of assisting the Bangsamoro Government in its transition to operate its own DUs and in promoting international interest to further mobilize technical and financial assistance for the region's power sector. Specifically, the NEA facilitated the following initiatives: a) engaged with ELECNOR, a Spanish company, to conduct a feasibility study on the rehabilitation of the Maguindanao Electric Cooperative (MAGELCO) distribution system; b) raised PhP24.0 million worth of funds to support substation facilities for MAGELCO in cooperation with Mindanao ECs; and c) agreed to be part of the EC Management of MAGELCO. Also, plans are underway for the NEA to convene a power summit in the Lanao del Sur Electric Cooperative (LASURECO) franchise area with BARMM on-board in all activities. Full implementation of RA 11646. With the goal of accelerating total electrification in unserved and underserved areas, the DOE will ensure full and effective implementation of the provisions under the MGSA. As such, the DOE intends to successfully carry out the strategies under the NTER, as well as the timely conduct of CSP for the prospective MGSPs. Continuous improvement of electricity statistics and monitoring system. In addition to the launching and enhancement of the Microgrid and PVM dashboard, a comprehensive database of electricity statistics and monitoring system is targeted to be developed in the medium-term. The database can be a critical tool in identifying effective electrification strategies that can serve as bases for policy formulation. LONG-TERM Ensure electricity access to all households in the country. As the population steadily increases, so does the total number of households. Given this reality, the DOE will be firm in its total electrification agenda, and this will be pursued and guided with the latest available information on census as a reference in implementing policies and programs. Continuous improvement and enhancement of policies and strategies. To keep abreast with the ever-changing electrification landscape, the improvement of policies and strategies is one of the critical deliverables of the DOE in the long-term. This practice guarantees that programs to be implemented are pragmatic and aligned with current trends and developments thereby facilitating expansion of access to reliable electricity services. Investment and Employment Opportunities The envisioned energy sector transition is depicted in the CES as it reflects the straightforward shift towards a robust power system supported and driven by clean and low-carbon technologies. Realizing this move to a more sustainable energy landscape necessitates attracting significant investments in the electric power industry to expand and decarbonize the country’s power supply. Relatedly, augmenting power generation capacity to ensure energy supply security and sustainability requires capacity additions as represented in the outlook scenarios. Over the course of President Marcos Jr. Administration, total capacity additions in the Reference (REF), CES 1, and CES 2 are projected to reach 18.5 GW, 18.2 GW, and 19.7 GW, respectively (Table 57). These additional power generation projects entail capital investments amounting to PhP1.6 trillion for the REF scenario, PhP1.9 trillion for CES 1, and PhP2.0 trillion for CES 2. 130 110 Forecasted 2028 HH population based on the 2020 Census of Population Philippine Energy Plan === pep-2023-2050-vol2-section-f2-page-121.pdf === Table 57. Total Investment Requirements for Power Generation Projects Capacity Addition, in MW Technology 2023-2028 REF CES 1 Investment Cost (PhP Billion @2022 Prices) 2029-2050 CES 2 REF 2023-2028 CES 1 CES 2 REF 2029-2050 CES 1 CES 2 REF CES 1 CES 2 Coal 2,305 2,305 2,305 - - - 350.55 334.38 334.38 - - - Natural Gas 2,413 2,413 2,413 19,468 13,576 16,444 253.42 253.42 253.42 1,447.04 977.32 1,201.88 Oil-based 20 20 20 - - - 2.18 2.18 2.18 - - - - - - - 4,800 4,800 - - - - 1,738.60 1,738.60 9,441.83 Other Technologies Renewables 13,791 13,458 14,919 84,712 93,110 92,033 928.13 1,197.25 1,291.68 5,526.23 6,392.23 Biomass 42 122 122 50 16 16 5.27 20.37 20.37 2.33 4.88 4.88 Geothermal 425 425 425 930 580 580 143.62 143.62 143.62 271.85 172.56 169.08 Solar 9,328 6,231 6,231 45,620 46,934 27,890 500.80 340.59 340.59 1,790.70 1,834.40 1,101.05 Hydropower 295 770 770 9,970 6,030 5,410 41.82 111.05 111.05 1,473.08 849.67 759.85 Onshore Wind 3,700 3,910 5,371 21,342 22,050 10,037 236.62 252.26 346.69 1,023.49 1,047.54 482.91 Offshore Wind - 2,000 2,000 6,800 17,500 48,100 - 329.37 329.37 964.78 2,483.18 6,924.06 BESS6 Total 2,080 2,080 2,080 1,544 19,779 22,426 63.60 63.60 63.60 56.35 744.05 899.88 18,528 18,195 19,656 104,180 111,486 113,277 1,597.87 1,850.82 1,945.26 7,029.62 9,852.20 13,282.18 *For accounting purposes, BESS are not included in the total capacity additions Table 58. Estimated Job Generation in Power Generation Projects Type of Plant Additional Jobs Estimated Job / MW 2023-2028 Operation and Maintenance Construction REF 2029-2050 CES 1 CES 2 REF CES 1 CES 2 Coal 2.5 0.65 7,261 7,261 7,261 - - - Natural Gas 2.73 0.13 6,901 6,901 6,901 55,678 38,827 47,030 Oil-based 2.73 0.13 57 57 57 - - - 5.1 - - - - 24,480 24,480 Other Technologies4 Biomass 9.8 7.75 737 2,141 2,141 878 281 281 Geothermal 24.55 1.85 11,220 11,220 11,220 24,552 15,312 15,312 Solar 10.83 1.7 116,880 78,074 78,074 571,619 588,083 588,083 Hydropower 8.33 0.55 2,620 6,838 6,838 88,534 53,546 48,041 Onshore Wind5 4.83 0.21 18,633 19,691 27,048 107,478 111,044 50,546 Offshore Wind5 12.28 4.82 - 34,204 34,204 116,292 299,282 822,597 4.9 1.5 13,312 13,312 13,312 9,882 126,586 143,526 177,621 179,699 187,056 974,912 1,257,440 1,501,274 BESS6 Total Notes: 1. Construction multiplier based on EPNS submission except for biomass, onshore and offshore wind, BESS, and other technology (nuclear) plant. Estimate based on 2013 Research Study by EPPB titled “The Contribution of the Power Generation Industry to Employment Generation.” 2. Operation and maintenance multiplier based on the 2013 DOE-EPPB Study except for biomass, onshore and offshore wind, BESS, and other technology (nuclear). 3. Construction period varies per plant technology. 4. Based on the U.S. job creation multiplier from nuclear programs, NREL report titled, “Nuclear Energy—Providing Power, Building Economies” 5. Job multipliers for onshore and offshore wind based on IRENA, 2018. 6. Job multipliers for BESS based on NREL. Within the medium- to long-term planning horizon, total capacity addition by 2050 under REF reaches 104.2 GW, necessitating PhP7.0 trillion of private investments. On the other hand, as the country actively pursues renewables, the CES, which is the government’s roadmap towards the energy transition, requires a capacity addition of 111.5 GW under CES 1 and 113.3 GW for CES 2. These aggressive RE targets, notably propelled by OSW potential resources, push investment requirements to PhP9.9 trillion and PhP13.3 trillion, under CES 1 and CES 2, respectively. The total investments to be made in CES 1 and CES 2 are 35.6 percent and 76.5 percent higher when compared to REF as these are dominantly driven by RE-based technologies. The investments resulting from the additional power generation capacities also yields to the creation of job opportunities for the Filipino people. Among the scenarios, CES 2 indicates the highest number of additional jobs to be created between 2023 and 2050, estimated at 1.7 million (Table 58). This is closely followed by CES 1, which is projected to generate 1.4 million employment opportunities, while close to 1.2 million potential jobs are estimated under REF throughout the planning period. Vo l u m e 2 111 === pep-2023-2050-vol2-section-f2-page-122.pdf === CHAPTER II TRANSITION FINANCE Transforming to a more sustainable society is faced with significant challenges due to the limited resources, growing population, and adverse effects of climate change. The environmental and social dimensions of climate change are expected to have the hardest impact to the poorest and most vulnerable communities. This issue has long been recognized as a developmental challenge, directly and indirectly affecting the attainment of objectives outlined in the United Nation’s Sustainable Development Goals (SDGs). Such challenges that add burden in sustainably meeting public needs impede the individual and collective efforts toward the realization of energy and environmental goals. In response, a smooth transition into a circular economy warrants efficient, effective, and sustainable finance that would not only generate substantial investments and employment but also restore value creation in ecological ecosystems. To ensure that sustainability-linked practices underpin a circular economy, it is imperative to mobilize a financial ecosystem through a stream of extensive investment in sustainable energy projects. International organizations firmly emphasize that sustainable finance involves a strategic process of considering environmental, social, and governance impacts in the financial sectors’ investment decisionmaking where mainstreaming climate mitigation strategies and private finance mobilization for clean and resilient growth must be championed. Hence, ecological, climate, and social finance with a broader focus on the longterm viability of the entire financial system must be incorporated. The Philippines Economic Update (PEU) by the World Bank in June 2023 recognized the importance of enhancing the ambition of the country's decarbonization efforts to optimize additional local and global environmental benefits.131 It emphasized the importance of securing international assistance and establishing cost-sharing arrangements to support this endeavor. Specific areas identified for further assessment to guide decarbonization policies and actions include: 131 112 Source: The World Bank Philippines Economic Update: Securing a Clean Energy Future -June 2023 Philippine Energy Plan