Philippine Power Generation Industry

Hydropower development in the Philippines began in 1913 in Baguio City, with the Camp John Hay Hydroelectric Power Plant with an installed capacity of 560 KW. In 1936 the Hydroelectric power industry was nationalized, locking out private sector involvement. In 1979, Presidential Decree 1645 mandated the National Electrification Administration with the objective of developing small scale hydropower generation capabilities. Over the years, the need for private sector involvement in the energy sector increased and was given increasing recognition by the government. This culminated in the passage of RA 9513 in 2008, which provided significant incentives to the private sector to become involved in renewable energy projects, including hydropower.

There is significant need for many of the countries electrical grids, especially in remote and underserved areas to add power through private sector initiatives.

Hydro power currently represents roughly 15% of the country’s power supply capacity, as shown below. Gross power generation in 2008 reached 60,821 gigawatt-hours (GWh), 2.03 percent higher than 59,612 GWh in 2007.

The Chart above shows the totals sources of energy by type in Giga Watt hours (GW) as of 2008 for the total Philippines.

The 2008 update of the Power Development Plan indicates that the country requires a total capacity addition of 4,100 MW. The Luzon grid needs a cumulative additional capacity of 3,000 MW, the Visayas grid demands 500 MW while the Mindanao grid requires 600 MW additional capacity. Since the government is prohibited to enter into new obligations, it has encouraged the private sector to build up 1,020 MW additional generation capacities.

According to a recent article in Business Week; The Philippines needs $2 billion in annual investments in the next two decades to develop renewable energy sources to stabilize carbon emissions, as well as in energy conservation technologies to help ease energy consumption in East Asia, which is expected to double by 2030, according to a World Bank analyst.

According to the World Bank report; "Winds of Change, East Asia’s Sustainable Energy Future", "a 10-fold increase in GDP (gross domestic product) in East Asia in the last three decades has led to a tripling of energy consumption which is expected to double again in the next two decades as the urban population increases by 50% and industrialization of the region continues."

The report noted that East Asia is rich in renewable energy (RE) sources. The Philippines is estimated to have a 12 Gigawatt (GW) RE potential; China, 840 GW; Indonesia, 160 GW; Vietnam, 26 GW and Thailand, 6.7 GW.