Renewable energy law comes into force

The President said the new legislation is the "first and most comprehensive renewable energy law in Southeast Asia" that would enable the Philippines to capture a part of the soaring investments in renewable energy development worldwide pegged at $71 billion last year.

"With our Renewable Energy Act, we can now move aggressively to develop these resources," she added, referring to solar, biomass, geothermal, hydropower, wind and ocean-energy technologies.

"The benefits of renewable-energy use are considerable," Energy Secretary Angelo Reyes said also Tuesday. "It will foster sustainable growth, energy independence and economic security for the country, and unite us with the global effort to stop climate change."

The new law--Republic Act 9513--provides fiscal and non-fiscal incentives for renewable energy investors, including tax credits on domestic capital equipment and services, special realty tax rates on equipment and machinery, tax exemption of carbon credits, duty-free importation mechanisms, and income tax holidays, among others.

The law also provides for the establishment of a Renewable Portfolio Standard system, which would require electricity suppliers to source a certain amount of their energy supply from renewable resources such as wind, solar, hydro, geothermal and biomass.

The standard would also be complemented by a feed-in tariff system to encourage the speedy entry of renewable energy projects.

At present, the country is heavily reliant coal power plants, which are said to be one of the main sources of greenhouse gas emissions, for bulk of its electricity needs.

"This measure will ultimately ensure a market for renewable energy, and provide a system that will allow consumers to choose green sources of energy in the long term," Reyes said.

Pieces in place

Industry officials said that with such incentives and perks now present, the development of the country's renewable energy sources, which have long been hampered by huge investment costs and intermittent power generation, would finally have the support that it needs.

The passage of the bill is also seen to help accelerate the Energy department's target for renewable energy sources especially at a time when the country's demand for power is narrowing the gap with supply.

Under the Department of Energy's medium-term Renewable Energy Policy Framework, the government aims to develop more than 4,000 megawatts of additional renewable energy capacity, some 1,200 megawatts of which are planned to come from geothermal sources.

"While renewable energy development has been slow in the past years, the passage of the bill is expected to attract more investors to the industry, and help cement plans of investors who had been waiting for the bill's approval," Reyes said.

New era

Catherine Maceda, Renewable Energy Coalition spokesman, said, "The Renewable Energy Law is expected to usher in an era of cleaner energy use in the country that will benefit generations to come."

The coalition, a multisectoral group that had been campaigning for the passage of the bill, projected that the country could save up to $1.23 billion with the development of some 4,000 megawatts of electricity from renewable energy resources.

"This amount can be directed to fund other development needs of the country," Maceda said.

Welcome development

Greenpeace Southeast Asia Executive Director Von Hernandez welcomed the development, saying the Philippines is on track toward achieving an energy revolution that is key to addressing climate change.

"This signals that the Philippines is on track toward achieving an 'Energy Revolution' which can end our dependence on fossil fuels and move the country into a low carbon emissions economy which is a key solution to the problem of dangerous climate change," he added.

In August, Greenpeace released the report entitled, Energy Revolution: A sustainable Philippine Energy Outlook, the first-ever comprehensive energy strategy drawn up for the Philippine setting which shows how renewable energy can become the country's energy backbone.

The report said renewable energy could provide more than half of the country's energy needs by 2030. It added that the Philippines could save as much as 40 percent, or $9.6 billion, in electricity cost in 2050 by using renewable energy.

The report recommends phasing out all subsidies for fossil fuels, stopping plans to construct nuclear power plants, putting a moratorium on the construction of new coal-fired power plants, and abandoning the myth of "clean coal" and nuclear power as solutions to climate change.

-- With Ira Karen Apanay