II. The Philippine Energy Plan (PEP)

1. EXECUTIVE SUMMARY (Volume 1: National Energy Plan)

1.2 MAIN GRID

1.2.1 Peak Demand

The system peak demand of the country is expected to increase from 9,827 MW in 2005 to 14,265 in 2010 and 19,064 MW in 2014 with an average annual growth rate of 7.6 within the planning horizon.

For Luzon, the projected 2005 peak demand of 7,343 MW is expected to grow to 11,018 MW in 2010 and 14,959 MW by 2014. The annual growth rate for the entire planning period is 8.2 percent.

For the Visayas grid, a lower forecast level is seen with 5.7 percent average annual growth rate. The projected demand for the region is forecasted to grow from its estimated value of 1,113 MW in 2005 to 1,463 MW by 2010 and 1,849 MW by the end of the planning period.

For Mindanao, the forecasted peak demand for 2005 is about 1,371 MW and will continue to grow to 1,784 MW in 2010 and 2,256 MW in 2014. This indicates an average annual growth rate of 5.9 percent.

1.2.2 Capacity Expansion Plan

The projected peak demand forecasts will require a total of 9,228 MW of new capacity additions in the next ten years. Of this total, 578 MW will come from committed projects while the remaining 8,650 MW are indicative capacity additions identified as baseload, midrange and peaking plants.

For Luzon, 7,200 MW indicative capacities are needed to fill up the demand starting 2008. For Visayas and Mindanao, the putting-up of critical infrastructure facilities that include both committed and indicative projects will avert the most likely occurrence of power shortages in 2005. Aside from the committed projects, 600 MW indicative capacities are needed in Visayas and the additional indicative capacity will commence by 2008. For Mindanao, 850-MW indicative capacities are needed and by 2005, it is essential to put up the 150-MW peaking plant to prevent power shortage. Of the 578-MW committed projects, 65 MW will come from Luzon, 228 MW in the Visayas and 285 MW in Mindanao. Considering the retirement of 951.5 MW of aging power plants, the net installed capacity in the country will reach 23,834 MW at the end of 2014.

1.2.3 Committed Projects

The 2005 PDP is consistent with the energy sector goal of increasing self sufficiency and using environment-friendly and cleaner fuels by firming up the entry of 180-MW renewable energy capacities during the period. These include two wind power plants in Ilocos Norte (the 25-MW Northwind power plant and the 40-MW Philippine National Oil Company-Energy Development Corporation (PNOC-EDC) wind power project), two geothermal power plants (the 40-MW Northern Negros and the 20-MW PNOC Palinpinon   ) and two bioenergy projects (the 30-MW Talisay and 25-MW Bais Bioenergy both located in Negros Occidental).

Fossil fuels will continue to be used to meet the growing demand. Expected to be in commercial operation by 2007 is the 210-MW Mindanao coal-fired power plant in Misamis Oriental which is currently under construction. Likewise, to address the looming power shortage in Visayas, the transfer of the 110-MW Pinamucan diesel-fired power barge from Batangas to Panay Island is targeted in 2005. Meanwhile, to augment the anticipated increase in demand in Mindanao due to the additional load from the National Steel Corporation, power barges 101, 103 and 104 with a combined dependable capacity of 75 MW will be transferred from Estancia and Obrero, Iloilo and Cortes, Bohol in Visayas by 2005.

1.2.4 Power Generation Forecast

Total electricity generation is estimated to register an average annual growth rate of 7.7 percent within the ten-year planning period in support of projected electricity demand growth. Total electricity generation will increase from 61,699 gigawatt-hours (GWh) in 2005 to 90,248 GWh by 2010 and further to 120,392 GWh by 2014.

1.2.5 Transmission Development

The implementation of ongoing transmission projects shall increase the grid system by 1,998 circuit-kilometers (ckt.-km.) of transmission lines and 3,230 megavolt ampere (MVA) of substation capacities all over the country. Additions of reactive and capacitive equipment totaling 593 megavolt-ampere reactive (MVAR) shall also be installed to provide voltage support in the different outlying areas.