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NEWS UPDATES 4 November 2009

ADB says Philippines needs $104m in energy investments

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The Philippines will need around $70 billion to $104 billion worth of investments to meet energy demand, which is expected to double to 79.6 million tons of oil equivalent (MTOE) by 2030, local daily Business Mirror reported, quoting new report released by the Asian Development Bank (ADB).

In the ADB report “Energy Outlook for Asia and the Pacific,” the Manila-based multilateral financing institution said the country’s energy demand would grow by 2.4 percent every year to 2030, from 43.6 MTOE in 2005.

The ADB said the key growth drivers would be the service and transport sectors. It said the economy would also remain as a net energy importer despite the government’s efforts to expand domestic energy-resource supply through increased renewable-energy technologies and alternative fuels.

“The distinctive feature of the Philippines’ energy-demand structure is that the transport sector will account for 44 percent of the economy’s energy demands in 2030, and that about three-quarters of energy will be used for road transport. Without substantial energy-intensive industries, energy demand by the industry sector is around 25 percent to 26 percent. This trend is forecasted to continue,” the ADB said.

“Energy self-sufficiency is an ambitious goal for the Philippines since it is not known for abundant fossil energy resources,” the bank added.

The ADB said energy demand would be affected by an estimated 4.3-percent growth in the country’s gross domestic product (GDP) for the 2005 to 2030 period. Apart from this, energy demand will also be affected by population growth of around 1.5 percent every year to 122.4 million Filipinos by 2030.

The urban share of the population reached about 63.4 percent in 2006, having grown from 48.8 percent in 1990, and despite geographic challenges, the electrification rate reached 81 percent as a result of aggressive government efforts.

The Philippines’ electricity demand is also projected to grow annually at 4.5 percent from 2005 to 2030. The ADB said that there would be an increased use of natural gas to 41.7 percent in 2030 from 29.8 percent in 2005.

The ADB said oil is expected to dominate the economy’s primary energy demand at 31.1 percent followed by renewable energy at 28.2 percent and coal at 23.1 percent.

This, the ADB said, will also increase the country’s energy import dependence to 65 percent in 2030 from 43.1 percent in 2006. The country imports most of the oil and coal requirements used by the transport and electricity-generating sectors.

“In the Philippines, indigenous energy sources are limited and it is clear that it will be difficult for domestic energy production to keep pace with increasing demand.

Therefore, the long-term trend is toward the depletion of domestic natural-gas resources; the full development of geothermal and hydro energy by the end of projected period; and a substantial increase in the import of oil [crude oil] for transport and coal for power generation.

As a result, the percentage of fossil fuels as part of the country’s total energy supply structure will rise from 53.9 in 2005 to 70.5 in 2030,” ADB said. The bank recommended that the country must continue its efforts to keep the end-use energy-efficiency standards, labeling and codes.


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