mine in the country accounted for about 93.0 percent share of the total indigenous coal production.

The rest were shared by Aggregate indigenous energy production in 2009 increased to coal mining operators in Zamboanga-Sibugay, Surigao del Sur, 23.5 MTOE from the 2008 level of 23.0 MTOE. This 2.0 percent Cebu and Bicol. increase was attributable to the accelerated production of the country's fossil fuel resources -- crude oil, natural gas and coal. RlrwwrMa Energy Likewise, production of biofuels, solar and wind increased Glsothmrl during the period. On the other hand, major fuels such as geothermal, hydropower and biomass reduced their Geothermal production decreased by 3.7 percent, from the 9.2 MTOE level in 2008 to 8.9 MTOE in 2009. The reduction in 2009 contribution to the total indigenous energy supply in 2009. was due to the following reasons: a) the 150 MW Bacrnan Geothermal Power Plant underwent maintenance shutdown Fossil Fuels for eight (8) months; b) Tiwi Geothermal Power Plant Units 1& 81 1 2 (59 MW each) was out in the last quarter due to force Total domestic oil production3 notably increased by 34.6 outages and low steam rate for Unit 1during the first month; c) percent in 2009. Crude oil production alone increased more Makban Geothermal Power Plant Unit 4 (63.2 MW) was on than thrice, from 0.1 MTOE in 2008 to 0.4 MTOE in 2009, maintenance shutdown for three (3) months; and, 4) Leyte mainly due to increased production in the Galoc oil field, Geothermal Power Plant Unit 1 (37.5 MW) decreased its accounting for 86.1 percent of total domestic oil production. output due to force outages and low steam production for Unit On the other hand, condensate from the Malampaya gas field, 3 (37.5 MW) . which is wholly exported, decreased by 2.7 percent due to the decreasing reservoir pressure causing the corresponding Currently used solely for power generation, geothermal amount of associated condensate or heavier gas to likewise continues to be the major indigenous energy resource of the country, with a share of 37.9 percent to the total indigenous decrease. primary energy supply in 2009. It remained to be the major For the first semester of 2010, total oil production was 0.46 indigenou; energy resource of the country in the first semester MTOE. Galoc oil field produced more than 90.0 percent of the of 2010 with total production reaching 4.4 MTOE, or 38.6 percent of the total indigenous energy produced during the aggregate production during the period. period. The government continues to encourage greater private sector involvement in the exploration and development of the country's vast geothermal energy resource potential. In October 2009, the DOE launched the Open and Competitive Selection Process (OCSP) in awarding renewable energy contracts. There were a total of ten (10) geothermal prospect areas offered for exploration and development, located in Cagua-Baua, Cagayan; Acupan-ltogon, Benguet; Natib, Bataan; Montelago, Oriental Mindoro; Mt. Labo, Camarines Norte; To date, the Malampaya gas project is the only Isarog, Camarines Sur; Sta. Lourdes - Tagburos and Puerto commercially-producinggas well in the country. It supplies the Princesa City in Palawan; Mainit, Surigao del Norte; and . fuel requirements of three (3) gas-fired power plants in Maibarara, LagunaIBatangas. at an gas^. Once operational, gas production from Libertad is expected to fuel a 1.5 MW power plant in Bogo, Cebu. On 30 As of December 2009, the five (5) existing Geothermal Service January 2009, the proponents - Forum Exploration Inc. and Contracts (GSC) of the Energy Development Corporation (EDC) DESCO Inc. - signed the Gas Sales and Purchase Agreement for Tongonan, Bacrnan, Southern Negros, Northern Negros and Mt. Apo geothermal fields have already been converted to (GSPA) to operate the Bogo power plant. Geothermal Renewable Energy Service Contract (GRESC). Meanwhile, two (2) Geothermal RE Operating Contracts (GREOCs) were signed for A Renewables, Inc. and Chevron P Geothermal Philippine Holdings Inc. covering Tiwi and Makban Local coal contributed 10.5 percent to the total lnalgenous energy mix, as production reached 2.5 MTOE in 2009, 29.9 geothermal power plants in 23 October 2009. percent higher than the previous year's level of 1.9 MTOE. The increase in local coal production was brought about by the The Tiwi and Makban Project is a non-integrated contract P increase in the demand for local coal spurred by the escalation where power plant operation contract was awarded to A in the price of imported coal. Semirara Mining Corporation, in Renewables Inc. while the steam field operation was awarded a bid to further expand its market abroad, wholly accounted to Chevron Geothermal Philippine Holdings, Inc. On October for the hike in local coal production, offsetting declines in other 23, 2009, conversions from existing service agreements with NPC and Chevron Geothermal for the steamfield operation of coal mining areas. Tiwi and Makban were endorsed to the Office of the President For the first semester of 2010, local coal production reached for approval on the nature of Financial and Technical 1.7 MTOE. This was already equivalent to 68.0 percent of the Assistance Agreement (FTAA). production in the whole of 2009. Semirara, the biggest coal
7 8 .

The country's total natural gas production went up by 0.7 percent in 2009 from its 2008 level of 3.2 MTOE, contributing 13.7 percent share to the country's overall indigenous energy production. Meanwhile, domestic gas produced during first semester of 2010 reached 1.3 MTOE, owning 11.5 percent share in the total indigenous energy supply mix during the period.

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producers - San Carlos Bioenergy inc. and Leyte Agri Corporation, with combined capacities expected to reach Biomass fuels, which include fuelwood, charcoal, more than 39 million liters, bagasse, coconut residues and other agri-wastes, remain a major part of the indigenous energy supply mix despite Wind and Solar a 1.8 percent decrease of its share, from 5.5 MTOE in 2008 to 5.4 MTOE in 2009. The decline was due to the The combined electricity production from wind and solar shift in the preference of households in urban areas to energy reached 5.7 kTOE in 2009 from 5.4 kTOE in 2008. use LPG as primary fuel for cooking while fuelwood and As of the first half of 2010, energy supply from wind and charcoal were mainly used as secondary fuels or solar reached 1.8 kTOE. substitutes. Consumption of biomass fuels however, remained widespread in the rural areas where supply is While wind and solar energy have the smallest abundant and accessible (often free). Biomass supply in contribution to the energy mix, it is expected that their the first semester of 2010 was recorded at 2.7 MTOE. share, including those of other renewable energy sources, will increase with the implementation of the RE A total of 18.4 MW of biomass capacity is expected to Law. The incentives provided in the law are envisioned to come in with the signing of biomass service contracts in bring more investments to develop the country's RE October 2009. Lucky PPH International, Inc. will develop sources. Currently, there are 44 awarded contracts in the 7.2 MW biomass plant in Alicia, Isabela, while Unisan wind and 1 for solar, which are all in their Biogen Corporation..will put up an 11.2 MW biomass pre-development stages. plant in Unisan, Quezon. With the RE Law in place, biomass is expected to figure more prominently in the To date, existing wind and solar capacities are the 33 MW energy supply mix with the commissioning of biomass Bangui B,ay Wind Power Project in llocos Norte and the 1 MW CfPALCO Solar Power Plant in Cagayan de Oro, power facilities in the coming years. Misamis Oriental, respectively.

Biomass

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Table 1. IndigenousEnergy Supply by Source, in kTOE (2008,2009

1st Semester 2010)

The country's hydropower resources contributed 10.4 percent share to the total indigenous energy supply in 2009. Hydropower production however, dropped by 0.6 percent to 2.4 MTOE from 2.5 MTOE in 2008. This decline was primarily due to the sustained fault in the Abaga-Agus 2 138kV transmission line which constrained Agus 1(80 MW) and Agus 2 Unit l ( 6 0 MW) in Mindanao and force outages from Agus 5 Unit 4 (53.7 MW) and Pulangi 4 Unit 1(85 MW) and Unit 3 (85 MW) during the NET ENERGY IMPOR7S6 period. In 2009, total net energy imports reached 16.2 MTOE, Hydropower has a significant impact in the energy supply which accounts for 40.8 percent of total energy supply. mix of the country, especially in Mindanao where it This is, however, 6.9 percent'lower than its 2008 level of accounts for 57.75 percent of the region's total power 17.6 MTOE. Net imported energy mainly comprised of mix. Thus, the severe drought due to El NiRo that hit the 77.5 percent oil and oil products, 21.2 percent coal and country during the summer months of 2010, harshly 0.3 percent biofuels. In the first semester of 2010 affected the power supply in Mindanao which caused meanwhile, net energy imports reached 8.7 MTOE, with prolonged power outages. In the first semester of 2010, oil and oil products' share at 78.5 percent, coal with 20.8 hydropower production registered a mere 0.71 MTOE. percent and biofuels with 0.6 percent.

.#d

In 2009, biofuels supply reached 165.4 kTOE, an increase of 73.5 percent from its previous year's level of 95.3 kTOE. The significant increase is attributed to the compliance of oil companies to the mandated biofuel blends under the Biofuels Law. Meanwhile, in the first half of 2010, total biofuels supply reached 105.9 kTOE. As of June 2010, there were a total of 12 CME producers in the country with aggregate production capacity of 395.6 million liters, while there were two (2) bioethanol
savengeshweofhydro ~ p o w r m k f o r Z 0 0 0 t o 2 M ) 9 l'he sum of knpo* a n d L change (+I--) exports and bunkering less
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Backed with strong domestic crude oil production, net crude oil imports went down by 22.3 percent. On the other hand, the easing of oil prices in the international market encouraged the 29.9 percent increase in net imports of finished petroleum products. In 2009, the country primarily imported crude oil from Saudi Arabia (67.5%) and United Arab Emirates (18.9%), while finished petroleum products were sourced from Singapore (27.5%), Chinese-Taipei (20.6%) and Korea (16.9%). Meanwhile, exports of finished petroleum products, mostly singapore-bound (28.9%); dropped by 58.6 percent to 0.7 MTOE from 1.7 MTOE in 2008.
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appears specific to regions where cultivation of c r o b that yield the associated biomass residues such as bagasse or rice hulls. Charcoal and fuelwood on the other hand, are being consumed across all regions. Overall biomass demand in 2009 further slowed down by 1.9 percent t o 5.4 MTOE, from its 2008 level of 5.5 MTOE. This was due to the 3.8 percent decline in the usage of the residential sector, the largest consumer of biomass. Electricity consumption continued to be stable at 4.4 MTOE in 2009. It is mainly used in the commercial sector for cooling and heating purposes. Electricity was also used as substitute for LPG and kerosene in residential and industrial cooking when oil prices were high. Meanwhile, coal consumption dropped by 15.8 percent t o 1.6 MTOE in 2009 from its year-ago level of 1.9 MTOE. Declines in coal usage for power generation and cement manufacturing were noted. Biofuels consumption '(CME and ethanol) grew the fastest at 71.6 percent. Compliance to the Biofuels Law as well as the effective campaign of the government to use cleaner and alternative fuels brought about the significant increase in biofuels consumption to 160.2 kTOE in 2009 from 93.3 kTOE in 2008. Meanwhile, the country's TFEC in the first half of 2010 reached 12.2 MTOE. The transport sector remained to be highest energy consuming sector with 4.4 MTOE, or 36.4 percent of the TFEC during the period. The industry sectbr followed with 3.3 MTOE or 26.7 percent share.

Figure 10. Energy Consumption of the Transport Sector by Fuel Type,MTOE

years in the maximum age of taxis to operate. Of the total 26,128 PUB units which applied for franchise, 28 units were converted to CNG and 4 units to LPG8.Similarly, as a result of the mandated blend, biofuels consumption in the transport sector showed a significant growth from the 0.1 MTOE level of 2008 to 0.2 MTOE in 2009. It is worth noting that due to the incentives of the LTFRB, the use of LYG in the transport sector has become more popular as an alternative fuel among taxi fleets and to some extent, privately-owned cars since it is a cheaper, efficient and cleaner fuel compared to gasoline and diesel. As such, of the total 32,423 available taxi units, 18,351 have already converted to LPG9, while 293 tricycles nationwide now run on LPG. The conversion to LPG of these public transport units is equivalent to O reducing C z by 95.12 kT. Thus, auto-LPG registered an increase in consumption to 83.6 kTOE in 2009 from 67.9 kTOE in 2008. As of end-2009, there were 182 LPG refilling stations ierving these vehicles nationwide.

The third largest energy consumer was the household with 3.1 MTOE or 25.4 percent of the TFEC. Commercial and AFF used 1.2 MTOE (9.9 percent) and 0.2 MTOE (1.5 On fuel consumption by transport sub-sectors, road percent) of energy, respectively. transport remained to be the largest energy user with 79.5 percent share of the total transport demand (Figure Consumption of petroleum products accounted for 11). almost half (49.6 percent) of the total energy demand for the first six months of 2010 or 6.0 MTOE. On the other hand, the volume of biomass used reached 2.7 MTOE, 2009 Water A h followed by electricity, with 2.3 MTOE during the period.

Transport remained as the most energy-intensive sector in 2009, dominating final energy consumption with a 37.9 percent share. This share increasedby 5.3 percent to 8.9 MTOE in 2009 from the 2008 level of 8.5 MTOE. In support of the DOE'S campaign to promote the use of cleaner alternative and fuels, ~~~d ~ the ~ Franchising and Regulatory Board (LTFRB) granted incentives to operators with LPG- and CNG-fed engines by giving them preference in the application of franchise for public utility buses (PUB) and an additional two (2)
>kit
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Trans part

Road Transport 79.5%

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~meswir Transport

C i c fiation 11.O% Railway 0.1%

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~ Figure 1 .~ 1 Energy Consumption of the Transport Sector, by Sub-seaor, MTOE ~ ~ ~ ~ t ~

Fuel usage for domestic air transport, road transport and international aviation posted increasing levels by 30.8 Percent, 6.8 Percent and 2.4 Percent, respectively.

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