Department of Energy POLICIES AND PROGRAMS ON RENEWABLE ENERGY Prospects for Small Scale Clean Development Mechanism
OUTLINE 1. RE Goals, Policies and Strategies 2. RE Situationer 3. Policies on Small RE Systems 4. RE Incentives 5. RE Potential Projects
Energy Sector Objectives 1. Ensure sufficient, stable, secure, accessible and reasonably-priced energy supply 2. Pursue cleaner and efficient energy utilization and clean technologies adoption 3. Cultivate strong partnership and collaboration with key partners and stakeholders 4. Empower and protect welfare of various energy publics
Renewable Energy Goals v Increase RE-based capacity by 100% within the next 10 years (2003 -2012) v Increase non-power contribution of RE to the energy mix by 10 MMBFOE in the next ten years Be the number one geothermal energy producer in the world Be the number one wind energy producer in Southeast Asia Double hydro capacity by 2012 Expand contribution of biomass, solar and ocean energy by 100 MW
TARGETS RESOURCE Geothermal Hydro Wind Biomass, Solar & others Total INSTALLED TARGET CAPACITY INSTALLED AS OF 2002 CAPACITY TOTAL INSTALLED CAPACITY 1, 931 2, 518 0 0 1, 200 2, 723 255 101 3, 131 5, 241 255 101 4, 449 4, 279 8, 728
ASSUMPTIONS v Enhancement of existing policies and programs v Realization of higher production targets v Establishment of market-driven RE industry v Availability of new international financing schemes (e. g. Clean Development Mechanism (CDM) and Prototype Carbon Fund)
RE Policies and Strategies Diversify energy mix in favor of indigenous RE resources Promote wide-scale use of RE as alternative fuels and technologies Transform Negros Island as a model of RE development and utilization Make the Philippines a manufacturing hub for PV cells to facilitate development of local manufacturing industry for RE equipment and components Encourage greater private sector investments and participation in RE development through market-based incentives Establish responsive market mechanisms for RE-generated power Formulate an effective management program for fuelwood utilization with the view of reducing environmental impact
RE SITUATIONER Primary Energy Consumption, 2002 vs. 2001 (in MMBFOE) 2002 2001 Percent Change RENEWABLE Share Relative to Total Energy 2002 2001 108. 8 107. 4 1. 3 43. 4 43. 2 Geothermal 17. 7 18. 0 -1. 9 7. 0 7. 2 Hydro 12. 1 12. 2 -1. 0 4. 8 4. 9 Biomass 78. 8 77. 0 2. 4 31. 0 Wood/Woodwaste 44. 7 43. 7 2. 3 17. 8 17. 6 Bagasse 11. 2 11. 0 2. 2 4. 5 4. 4 Charcoal 5. 5 5. 4 1. 3 2. 2 17. 5 16. 9 3. 1 7. 0 6. 8 0. 2 28. 3 0. 1 Agriwaste Others
RE SITUATIONER Renewable Energy Share in Total Primary Energy Consumption
RE SITUATIONER Primary Energy Mix of Selected Countries, Share of Renewables vs. Conventional
Existing Policies on Small RE Systems HYDRO 1. Small hydro - 10 MW and below - Micro-hydro - 100 k. W and below - Mini-hydro - 101 k. W to 10 MW 2. Large hydro - more than 10 MW
RE INCENTIVES RA 7156 – Mini Hydro Law n Special privilege tax rates – Tax payable by developers/grantees to develop potential sites for hydroelectric power and to generate, transmit and sell electric power shall be 2 percent of their gross receipts n Income tax holiday for seven (7) years from start of commercial operations n Tax and duty free importation of machinery, equipment and materials. Exemption from payment of tariff duties and value-added tax (VAT) on importation of machinery and equipment (within seven (7) years from date of awarding of contract)
RE INCENTIVES RA 7156 – Mini Hydro Law n Tax credit on domestic capital equipment - For developers who buy machinery, equipment, materials and parts from a local manufacturers, tax credit is given equivalent to 100 percent of value of VAT and custom duties that would have been paid to import said machinery, equipment, etc. n Special realty tax rates on equipment and machinery – Realty and other taxes on civil works, equipment, machinery and other improvements of a registered mini-hydroelectric power developer shall not exceed 2. 5 percent of their original cost n VAT Exemption - Exemption from payment of 10 percent VAT on gross receipts derived from sale of electric power whether wheeled via the NPC grid or electric utility lines
RE INCENTIVES EO 462 (1997) as amended by EO 232 (2000)- OSW n The government shall waive the signature bonus on the first project to reduce pre-operating cost burden on the OSW production-sharing contractor. n Payment of production bonus shall be applied only after the project has fully recovered its pre-operating expenses. n OSW developers shall be allowed to charge the cost of assessment, field verification and feasibility studies of other sites to its current commercial projects. n The government shall facilitate developers in obtaining all applicable fiscal and non-fiscal incentives, including registration as pioneer industry under the Board of Investments (BOI) and securing of access to lands and offshore areas where OSW resources shall be harnessed.
RE INCENTIVES PD 1442 : An Act to Promote the Exploration & Development Of Geothermal Resources n Recovery of operating expenses not exceeding 90% of the gross value in any year with carry-forward of unrecovered cost n Service fee of up to 40% of the net proceeds n Exemption from all taxes except income tax n Exemption from payment of tariff duties and compensating tax on the importation of machinery, equipment, spare parts and all materials for geothermal operations n Depreciation of capital equipment over a ten (10) year period n Easy repatriation of capital investments and remittance of earnings
RE INCENTIVES Proposed RE Bill n Existing fiscal incentives strengthened/additional incentives n Non-fiscal incentives – priority dispatch, ancillary services and interconnection & wheeling charges Incentives
List of Potential Hydropower Resources for Power Generation NAME RE P R O J E C T S CLASSIFICATION INSTALLED CAPACITY (MW) COMMISSIONING YEAR LOCATION Luzon San Roque HEP* Kalayaan PS HEP* Cantigas Batang-Batang MHP Kapipian MHP Kanan HEP Colasi MHP Catuiran HEP Dugui MHP Langogan MHP Addalam HEP Aglubang HEP Diduyun HEP Agbulo HEP Hitoma MHP Abuan HEP Cabinbin MHP Large Hydro Mini-Hydro Large Hydro Mini-Hydro Large Hydro Mini-Hydro 1, 791. 0 419. 4 400. 0 0. 9 3. 5 3. 0 113. 0 1. 0 24. 0 6. 8 46. 0 13. 6 332. 0 360. 0 3. 0 60. 0 0. 8 2003 2004 2005 2007 2008 2009 2010 2011 2012 Pangasinan Laguna Romblon Palawan Catanduanes Quezon Camarines Norte Mindoro Oriental Catanduanes Palawan Quirino Mindoro Oriental Quirino Apayao Catanduanes Isabela Palawan Visayas Pacuan HEP Amandaraga MHP Timbaban HEP Sicopong HEP Bugtong MHP Igbolo MHP Siaton MHP Villasiga HEP Large Hydro Mini-Hydro Mini-Hydro Large Hydro 126. 2 33. 0 4. 0 29. 0 17. 8 1. 0 4. 0 5. 4 32. 0 2006 2008 2009 2010 2013 Negros Oriental Eastern Samar Aklan Negros Oriental Samar Iloilo City Negros Oriental Antique Mindanao Hinubasan Lower Dapitan MHP Liangan HEP Taguibo MHP Lake Mainit HEP Middle Dapitan MHP Tagoloan HEP Libungan MHP Agus III HEP Upper Dapitan MHP Bulanog-Batang HEP Pulangi V HEP Mini-Hydro Large Hydro Mini-Hydro Large Hydro 806. 1 0. 4 3. 8 11. 9 7. 0 22. 0 4. 4 68. 0 10. 0 225. 0 3. 6 150. 0 300. 0 TOTAL 2, 723. 3 2004 2005 2006 2007 2009 2010 2011 2012 Dinagat Island Zamboanga del Norte Lanao del Norte Agusan del Norte Zamboanga del Norte Bukidnon North Cotabato Lanao del Norte Zamboanga del Norte Bukidnon North Cotabato
RE POTENTIAL PROJECTS List of Identified Wind Resources for Power Generation
R E POTENTIAL PROJECTS List of Potential Biomass, Solar and Ocean Resources for Power Generation
R E POTENTIAL PROJECTS List of Potential Geothermal Resources for Power Generation
R E POTENTIAL PROJECTS Geothermal for Non-Power Applications n Enhancement of the self-reliant multi-crop dryer project in Manito, Albay n Multi-crop dryer in geothermal sites in Leyte n In close coordination with the Department of Tourism, promote hot spring areas for possible spa resort development
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