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POLICIES AND PROGRAMS ON RENEWABLE ENERGY Prospects for Small Scale Clean Development Mechanism

Department of Energy. POLICIES AND PROGRAMS ON RENEWABLE ENERGY Prospects for Small Scale Clean Development Mechanism. OUTLINE . RE Goals, Policies and Strategies RE Situationer Policies on Small RE Systems RE Incentives RE Potential Projects. Energy Sector Objectives.

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POLICIES AND PROGRAMS ON RENEWABLE ENERGY Prospects for Small Scale Clean Development Mechanism

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  1. Department of Energy POLICIES AND PROGRAMS ON RENEWABLE ENERGY Prospects for Small Scale Clean Development Mechanism

  2. OUTLINE • RE Goals, Policies and Strategies • RE Situationer • Policies on Small RE Systems • RE Incentives • RE Potential Projects

  3. Energy Sector Objectives • Ensure sufficient, stable, secure, accessible and reasonably-priced energy supply • Pursue cleaner and efficient energy utilization and clean technologies adoption • Cultivate strong partnership and collaboration with key partners and stakeholders • Empower and protect welfare of various energy publics

  4. Renewable Energy Goals • Increase RE-based capacity by 100% within the next 10 years (2003-2012) • Increasenon-power contribution of RE to the energy mix by 10 MMBFOE in the next ten years • Bethe number one geothermal energy producer in the world • Bethe number one wind energy producer in Southeast Asia • Double hydro capacity by 2012 • Expand contribution of biomass, solar and ocean energy • by 100 MW

  5. TARGETS

  6. ASSUMPTIONS • Enhancement of existing policies and programs • Realization of higher production targets • Establishment of market-driven RE industry • Availability of new international financing schemes (e.g. Clean Development Mechanism (CDM) and Prototype Carbon Fund)

  7. RE Policies and Strategies • Diversify energy mix in favor of indigenous RE resources • Promotewide-scale use of RE as alternative fuels and technologies • TransformNegros Island as a model of RE development and utilization • Makethe Philippines a manufacturing hub for PV cells to facilitate • development of local manufacturing industry for RE equipment and • components • Encouragegreater private sector investments and participation in RE • development through market-based incentives • Establishresponsive market mechanisms for RE-generated power • Formulatean effective management program for fuelwood utilization • with the view of reducing environmental impact

  8. 2002 2001 Percent Share Relative to Total Energy Change 2002 2001 RENEWABLE 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 31.4 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 2.2 Agriwaste 17.5 16.9 3.1 7.0 6.8 Others 0.2 0.2 28.3 0.1 0.1 RE SITUATIONER Primary Energy Consumption, 2002 vs. 2001 (in MMBFOE)

  9. RE SITUATIONER Renewable Energy Share in Total Primary Energy Consumption

  10. RE SITUATIONER Primary Energy Mix of Selected Countries, Share of Renewables vs. Conventional

  11. Existing Policies on Small RE Systems • H Y D R O • Small hydro - 10 MW and below • - Micro-hydro - 100 kW and below • - Mini-hydro - 101 kW to 10 MW • Large hydro - more than 10 MW

  12. RE INCENTIVES • RA 7156 – Mini Hydro Law • 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 • Income tax holiday for seven (7) years from start of commercial operations • 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)

  13. RE INCENTIVES • RA 7156 – Mini Hydro Law • 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. • 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 • 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

  14. RE INCENTIVES • EO 462 (1997) as amended by EO 232 (2000)- OSW • The government shall waive the signature bonus on the first project to reduce pre-operating cost burden on the OSW production-sharing contractor. • Payment of production bonus shall be applied only after the project has fully recovered its pre-operating expenses. • OSW developers shall be allowed to charge the cost of assessment, field verification and feasibility studies of other sites to its current commercial projects. • 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.

  15. RE INCENTIVES • PD 1442 : An Act to Promote the Exploration & Development Of Geothermal Resources • Recovery of operating expenses not exceeding 90% of the gross value in any year with carry-forward of unrecovered cost • Service fee of up to 40% of the net proceeds • Exemption from all taxes except income tax • Exemption from payment of tariff duties and compensating tax on the importation of machinery, equipment, spare parts and all materials for geothermal operations • Depreciation of capital equipment over a ten (10) year period • Easy repatriation of capital investments and remittance of earnings

  16. RE INCENTIVES • Proposed RE Bill • Existing fiscal incentives strengthened/additional incentives • Non-fiscal incentives – priority dispatch, ancillary services and interconnection & wheeling charges Incentives

  17. NAME CLASSIFICATION INSTALLED COMMISSIONING LOCATION CAPACITY (MW) YEAR Luzon 1,791.0 San Roque HEP* Large Hydro 419.4 2003 Pangasinan Kalayaan PS HEP* Large Hydro 400.0 2004 Laguna Cantigas Mini-Hydro 0.9 2004 Romblon Batang-Batang MHP Mini-Hydro 3.5 2005 Palawan Kapipian MHP Mini-Hydro 3.0 2005 Catanduanes Kanan HEP Large Hydro 113.0 2007 Quezon Colasi MHP Mini-Hydro 1.0 2007 Camarines Norte Catuiran HEP Large Hydro 24.0 2007 Mindoro Oriental Dugui MHP Mini-Hydro 4.0 2008 Catanduanes Langogan MHP Mini-Hydro 6.8 2008 Palawan Addalam HEP Large Hydro 46.0 2009 Quirino Aglubang HEP Large Hydro 13.6 2009 Mindoro Oriental Diduyun HEP Large Hydro 332.0 2010 Quirino Agbulo HEP Large Hydro 360.0 2011 Apayao Hitoma MHP Mini-Hydro 3.0 2011 Catanduanes Abuan HEP Large Hydro 60.0 2012 Isabela Cabinbin MHP Mini-Hydro 0.8 2012 Palawan Visayas 126.2 Pacuan HEP Large Hydro 33.0 2006 Negros Oriental Amandaraga MHP Mini-Hydro 4.0 2006 Eastern Samar Timbaban HEP Large Hydro 29.0 2008 Aklan Sicopong HEP Large Hydro 17.8 2008 Negros Oriental Bugtong MHP Mini-Hydro 1.0 2008 Samar Igbolo MHP Mini-Hydro 4.0 2009 Iloilo City Siaton MHP Mini-Hydro 5.4 2010 Negros Oriental Villasiga HEP Large Hydro 32.0 2013 Antique Mindanao 806.1 2004 Dinagat Island Hinubasan Mini-Hydro 0.4 Lower Dapitan MHP Mini-Hydro 3.8 2005 Zamboanga del Norte Liangan HEP Large Hydro 11.9 2006 Lanao del Norte Taguibo MHP Mini-Hydro 7.0 2006 Agusan del Norte Lake Mainit HEP Large Hydro 22.0 2007 Agusan del Norte Middle Dapitan MHP Mini-Hydro 4.4 2007 Zamboanga del Norte Tagoloan HEP Large Hydro 68.0 2009 Bukidnon Libungan MHP Mini-Hydro 10.0 2009 North Cotabato Agus III HEP Large Hydro 225.0 2010 Lanao del Norte Upper Dapitan MHP Mini-Hydro 3.6 2010 Zamboanga del Norte Bulanog-Batang HEP Large Hydro 150.0 2011 Bukidnon Pulangi V HEP Large Hydro 300.0 2012 North Cotabato 2,723.3 TOTAL List of Potential Hydropower Resources for Power Generation RE PROJECTS

  18. RE POTENTIAL PROJECTS List of Identified Wind Resources for Power Generation

  19. R E POTENTIAL PROJECTS List of Potential Biomass, Solar and Ocean Resources for Power Generation

  20. R E POTENTIAL PROJECTS List of Potential Geothermal Resources for Power Generation

  21. R E POTENTIAL PROJECTS Geothermal for Non-Power Applications • Enhancement of the self-reliant multi-crop dryer project in Manito, Albay • Multi-crop dryer in geothermal sites in Leyte • In close coordination with the Department of Tourism, promote hot spring areas for possible spa resort development

  22. End of Presentation Thank You!

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