Electrical Power Systems
Philippines
Overview
(In $ Millions)
2003* 2004* 2005* (estimated)
Total Market Size n.a. n.a. n.a.
Total Local Production n.a. n.a. n.a.
Total Exports 357 385 606
Total Imports 603 651 752
Imports from the U.S. 81 88 92
Data is based on unofficial trade estimates
On its sixth year of implementation, the Electric Power Industry Reform Act (EPIRA) continues to be the country’s blueprint for the restructuring of the generation, transmission and distribution of electric power. To date, the EPIRA-created Power Sector Assets and Liabilities Management Corporation (PSALM), tasked to sell the assets of state-owned National Power Corporation (NPC), has so far awarded 11% out of a total required 70% of all of NPC’s generating assets. Among those lined up for the auction block within 2007 are two coal plants (including a re-bid of the 600 MW Masinloc plant after the original winning bidder failed to deliver upfront payment) and a geothermal plant.
Efforts to effect open access and retail competition are now under way. In June 2006, the Wholesale Electricity Spot Market (WESM) commenced its commercial operations initially to serve the main Luzon grid.
Meanwhile, PSALM is also preparing to award a 25-year concession to operate and maintain the country’s transmission facilities (currently under the National Transmission Corporation or TransCo). In early February 2007, a fourth re-bid was declared a failure after only one of three pre-qualified parties tabled a bid. As of this writing, government is still contemplating on its next steps.
In December 2006, U.S. based Mirant Corporation, the Philippines’ largest private independent power producer (IPP), announced that it has sold its power plants in the Philippines to a Japanese consortium led by Marubeni Corporation and Tokyo Electric and Power Company (Tepco). The sale of Mirant’s assets in the Philippines and elsewhere in the Pacific follows the parent company’s strategy of consolidating its finances, improving liquidity and focusing on its existing U.S. businesses.
The Asian Development Bank (ADB) recently approved a $450 million loan to mobilize the Power Sector Development Program for the Philippines. The funds will be used mainly to assist the Philippine government in its power restructuring efforts and introduce a competitive market for electricity. Specifically, the loan proceeds will help the government absorb a significant portion of the liabilities incurred by state-owned NPC.
Demand for power continues to surge, and would require additional capacities in the main grid areas (Luzon, Visayas and Mindanao) within the next five years or so, while old power plants are being retired or decommissioned. DOE projects critical periods for the main grids Luzon (2010), Visayas (2011) and Mindanao (2009) where power supply and demand are expected to reach equilibrium and there are no new generating capacities added. Meanwhile, the DOE reports that several indicative power projects (mainly using coal, hydropower and geothermal) have been identified and are expected to become operational between 2008 and 2012. Among the recent capacity additions is a 210 MW coal plant built by German firm Steag in Misamis Oriental launched in January 2007.
Best Products/Services
The following products enjoy stable demand in the local market:
· Lighting Equipment
· Switchgears, Circuit Breakers and Controls
· Capacitors and Voltage Regulators
· Wires and Cables
· Motors and Electrical Machinery
· Transformers
· Kilowatt hour (kWh) Meters
· Connectors
· Batteries
· Pumps, Valves, Boilers, Steam Generators and Turbines
· Energy Efficiency Technologies
· Electronic Metering Devices
· Transmission / Distribution Lines and Hardware
· Components to SCADA System / Systems Loss Reduction Technologies
· Stand by or Mobile Power Generating Sets
Opportunities
· DOE estimates P228 billion ($4.3 billion) worth of projects to increase the country’s power generating capacity by 4,074 MW by 2014 are required;
· Expansion, upgrade or rehabilitation of existing power plants to augment existing capacities and avert threats of a power shortage in the next few years, particularly in the Mindanao grid;
· The Transmission Development Plan (TDP) being implemented by TransCo is still under way. Initiated in 2005, the $850 million, 10-year project involves planned expenditures for additional transmission and substation capacity, facilitate inter-grid linkages and the continuous repair and upgrade of existing transmission infrastructure. The Japan Bank for International Cooperation (JBIC) has been identified as one of the main funding sources for this project;
· Increase in demand from local electric power cooperatives to enhance their distribution capacities. Some electric cooperatives are contemplating building their own power plants or establishing their own generating capacities;
· Additional power demand will come from increased industrial activity, particularly mining-related activities, which are enjoying renewed investment interest;
· Remote, off-grid areas being addressed by the government’s rural electrification program, which includes tapping new and renewable energy sources. This includes the supply of electricity to isolated and underserved areas under the Small Public Utilities Group (SPUG) currently managed by the NPC.
· Maintenance and upkeep of existing plants operated by the Independent Power Producers (IPPs). Currently there are more than 30 IPPs, several of which have principals based in the U.S., including CalEnergy, Intergen/Covanta, Chevron Geothermal (formerly Unocal) and Ormat;
· Distribution utilities such as the Manila Electric Company (MERALCO) and several electric cooperatives (ECs) are always on the look out for new technology or products that will help them minimize if not prevent distribution losses and achieve a more reliable and efficient distribution system.
Resources
Department of Energy (DOE): http://www.doe.gov.ph
Energy Regulatory Commission (ERC): http://www.erc.gov.ph
National Electrification Administration (NEA): http://www.nea.gov.ph
National Power Corporation (NPC): http://www.napocor.gov.ph
National Transmission Corporation (TransCo): http://www.transco.ph
Power Sector Assets & Liabilities Management (PSALM) Corp.: http://www.psalm.gov.ph
Wholesale Electricity Spot Market (WESM): http://www.wesm.ph
Edu Niala, Commercial Specialist
U.S. Commercial Service Manila
Email: Edu.Niala@mail.doc.gov , Manila.Office.Box@mail.doc.gov