Jose Layug - Update on Implementation of the Philippines Renewable Energy Law

7/31/2019 Jose Layug - Update on Implementation of the Philippines Renewable Energy Law

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Update on Implementation of the

Philippine Renewable Energy Law:

Milestones and Targets

Asian Development BankManila, Philippines

June 7, 2012

JOSE M. LAYUG, JR.Undersecretary

Department of Energy

Republic of the Philippines


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DISCUSSION OUTLINE

Background

Available RE Resources

Power Supply Mix and Energy Production

Renewable Energy Act of 2008 Incentives and RE Mechanisms

DOE, NREB, ERC

2010-2012: What Have We Done?

2012-2013: What Are Next Steps?


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UPDATE ON RE IMPLEMENTATION

BACKGROUND


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RENEWABLE ENERGYRESOURCES

BIomass (bagasse) total potential of 235.7 MW

Geothermal Resource 1,200 MW

Solar Energy Average potential 5kWh/m2/day

Hydropower - 10,500 MW

Ocean energy - 170,000 MW

Wind resources 76,600 MW


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COMPARATIVE RE UTILIZATION

Share of RE and Non-RE


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PRIMARY ENERGY SUPPLY MIX

Imported Ethanol, 0.3

ImportedCoal, 8.6

Imported Oil, 33.6

Oil, 2.3

Coal, 8.6

Natural Gas, 7.4

Hydro, 4.8

Geothermal, 21

Biomass, 13.1

Wind/Dolar, 0.01

CME/Ethanol, 0.3

Indigenous Energy,57.51

2010


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POWER GENERATION MIX

Biomass,0.04%

Natural Gas,28.8%

Coal, 34.4%Solar, 0.002%

Wind, 0.09%

Oil, 8.0%

Hydro, 11.5%

Geothermal,14.7%

2010Biomass,

0.02%

NaturalGas,

32.1%

Coal,

26.6%Solar,0.002%

Wind,0.1%

Oil, 8.7%

Hydro,15.8%

Geothermal,

16.7%

2009


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CRUDE OIL IMPORTATION

Others, 8.2

Indonesia,0.7

Malaysia, 10.2

Saudi Arabia, 45.3

UAE, 27

Qatar, 6.4

Oman, 1

Iraq, 1.2

Middle East81%

2010


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COMPARATIVE ENERGY DATA

Country Oil Production Gas Production CoalProduction

RE Target

China (coal 70%) 3.99 mb/d (5th) 94 bcm (8th) 3,240 Mt (1st) 30% (2035)

Vietnam (coal) 300 kb/d (35th) 9.4 bcm (42nd) 44.1 Mt (17th) 5% (2020)

Thailand (natural

gas 66%)

380 kb/d (32nd) 30.8 bcm (25th) 17.9 Mt (25th) 25% (2021)*

(currently 2%)Indonesia (coaland oil)

1.09 mb/d (21st) 82.8 bcm (12th) 305.9 Mt (6th) 25% (2025)*(currently 4%)

Malaysia (naturalgas 60%)

693 kb/d (27th) 58.6 bcm (16th) 78 Mt 17% (2030)*(currently 5%)

Taiwan (nuclear, oiland natural gas)

276 kb/d (37th) 310 m3 (71st) N/A 15% (2025)*(currently 8%)

India (coal 53%) 878 kb/d (24th) 120 bcm (5th) 569.9 Mt (3rd) 15.9% (2022)(currently 11%)

South Korea (oil,coal and nuclear)

48 kb/d (65th) 532 m3 (66th) 3 MMst (shorttons)

10% (2022)

PHILIPPINES

(coal and gas)

9 kb/d (85th) 3.1 bcm (52nd) 7.2 Mt (31st) 50% (2030)

(currently 30%)


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Accelerate the development of the countrys renewable energyresources by providing fiscal and non-fiscal incentives to private

sector investors and equipment manufacturers / suppliers.


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INCENTIVES UNDER RE ACT

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Renewable Energy Act(RA 9513)

Fiscal Incentives Non-Fiscal Incentives

RenewablePortfolio Std

FITScheme

Net-Metering

GreenEnergyOption


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FISCAL INCENTIVES

Incentives RE Developers Local RE Suppliers7-Year Income Tax Holiday

Yes Yes

Duty-free ImportationYes Yes

VAT-free ImportationNo Tax Credit Yes

Special Realty Tax Rate = 1.5 %

YesNet Operating Loss Carryover

Yes Yes

10% Corporate Tax Rate after ITHYes

Accelerated DepreciationYes Yes

Zero Percent VAT on RE Sales &

Purchases Yes Yes

Cash Incentive = 50% of UC for

Missionary ElectrificationYes

Tax Exemption on Carbon CreditsYes

Tax Credit on Domestic Capital

Equipment & Services

Yes Yes


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Incentives

RE

Developers

Electricity

Suppliers

End-users

Renewable Portfolio Standards Yes

Feed-In Tariff on Emerging

TechnologiesYes Yes

Renewable Energy Market &

CertificatesYes (for Non-FIT) Yes

Green Energy Options Yes

Net Metering Yes

Government waives share of proceeds

on RE micro-scale Projects


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INCENTIVES UNDER RE LAW

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Renewable Energy Law(RA 9513)

Fiscal Incentives Non-Fiscal Incentives

RenewablePortfolio Std

FIT

SchemeNet-

Metering

GreenEnergyOption


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IMPLEMENTATION OF RE LAW

WHAT HAVE WE DONE IN 2010-2012?


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DOE SPECIFIC ACTIONS

National Renewable Energy Program (NREP)

Signals big leap from fragmented initiatives into a focused andsustained drive towards energy security and improved access toclean energy and sets indicative interim targets for delivery of REwithin timeframe of 2011-2030 a LivingDocument

Renewable Portfolio Standards (RPS)

The RPS is an important component of the implementation of the REAct. The NREB shall set the minimum percentage of generation from

eligible RE resources and determine to which sector RPS shall beimposed on a per grid basis. The electricity suppliers are required tosource this minimum percentage i.e. RPS from eligible REgeneration facilities.


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DOE SPECIFIC ACTIONS

Renewable Portfolio Standards (RPS)

Conducted seven Regional Public Consultation (Luzon, Visayas,Mindanao), Round Table discussion (RTD) at DOE and PlenaryPublic Consultation at PICC on Feb. 16-25, 2010, March 25, 2011and November 14, 2011 respectively. RPS Rules pending approval

by DOE Secretary.

Feed-in Tariff

A fair FIT would encourage investments without unduly burdening

the consumers. The FIT also guarantees payment of a fixed tariff forRE generation for a mandated number of years.


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RE AWARDED CONTRACTS

Resource Awarded Contracts(Own-Use)

Potential Capacity(MW)

Hydro 138 2,450.16

Ocean 3 5.00

Geothermal 35 806.00

Wind 53 (1) 1,708 (0.06)

Solar 17 (1) 271 (0.08)

Biomass 24 (19) 164.30 (40.0)

TOTAL 291 5,444.76


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RE PENDING APPLICATIONS

Resource Awarded Contracts(Own-Use)

Potential Capacity(MW)

Hydro 157 1,848.65

Ocean 2

Geothermal 1 60.00

Wind 19 286.00

Solar 24 (1) 117.83 (0.02)

Biomass 6 (3) 51.20 (1.36)TOTAL 213 2,365.06


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UPC Pagudpud (80 MW)EDC Burgos , Pagudpud (166 MW)TAREC Lorenzo (54 MW)ELPI Pasuguin (120 MW)PERC Sual (30 MW)

Nabas

(30 MW)

Legend:136 887

HEP

Geothermal

Biomass

Wind

Northpoint - Aparri (20 MW)Alternergy Pililia, Sta. Praxedes,Kalayaan, Ballesteros (120 MW)TAREC

Ballesteros, Sibunag,

Nueva Valencia (90 MW)

LUZON GRID

SUWECO Cagayan (6MW)Epower Ifugao (4.5 MW)

- Nueva Ecija (8MW)

HEDCOR Benguet , Mt.Province (17 MW)

Clean&Green Camsur (1.5 MW)

Green Power - Nueva Ecija (17.5 MW)- Pangasinan (17.5 MW)

Tanawon Geo (40 MW)=2013Rangas Geo (40 MW)=2015Manito-Kayabon Geo(40MW)=2016EDC BacMan (150 MW)Aboitiz Tiwi (289 MW)

Aboitiz Makban (458 MW)


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P A N A YP A N A Y

Dauin Geo (40 MW) - 2017Green Core Panlinpinon(192 MW)EDC Negros (49 MW)

Southern Leyte Geo (40 MW) - 2019Green Core Leyte (112 MW)EDC Tongonan, Leyte (722 MW)

EDC NasuloGeothermal (20 MW)

VISAYAS GRID

Legend:

HEP

Geothermal

Biomass

SUWECO

Panay etc. (31 MW)HEDCOR Aklan (18 MW)Century Peak Iloilo (5MW)

Green Power Panay (35 MW)


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HEDCOR Davao (25.1 MW)

AGUS 3 HEP (225 MW)=2011HEDCOR Bukidnon (38.2MW)

CEPALCO Cabulig HEP(8 MW)=June 2011

HEDCOR Sibulan Inc.(42.5 MW)

EDC - Mindanao Geothermal 3(50 MW)=2014- Mt. Apo (108 MW)

MINDANAO GRID

Legend:

HEP

Geothermal

Biomass


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NATIONAL RENEWABLE ENERGYPROGRAM

RE-based On-Grid Capacity Installation Targets


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NREB SPECIFIC ACTIONS

Feed-in Tariff

Filed a petition to initiate rule-making for the adoption of the FIT forelectricity generated from biomass, ocean, run-of-river hydropower,solar and wind energy resources last May 16, 2011.

Net -Metering Interconnection Standards

Approved the Rules Enabling the Net Metering Program for RE onApril 11, 2012 and subsequently endorsed to ERC on April 20, 2012.The Rules seek only to establish the net-metering interconnection

standards for RE while the pricing methodology will be addressed inanother set of rules and will be endorsed to the ERC in due course.


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NREB SPECIFIC ACTIONS

Renewable Portfolio Standards (RPS) for Missionary Areas

To contribute to the growth of the renewable energy industry bydiversify energy supply, spur socio-economic development, andhelp address environmental concerns in missionary areas.Technical Working Groups on Off-Grids is finalizing draft RPS for

presentation to NREB.


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ERC SPECIFIC ACTIONS

Feed-in Tariff

Approved FIT Rules on July 12, 2010 which took effect on August12, 2010. The NREB FIT petition was subjected to a series ofcontinuous public hearings and presentation of evidence. OnMarch 20, 2012 the ERC declared the hearing terminated. To

date, the DOE, NREB and all interested parties are awaiting forthe FIT rates to be determined by the ERC.


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IMPLEMENTATION OF RE LAW

WHAT ARE NEXT STEPS IN 2010-2012?


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2012-2013 NEXT STEPS

Feed-in Tariff Implementation RE Trust Fund RE Resource Inventory and Assessments RPS Issuance and Setting Eligibility Criteria Rules

Grid Impact Studies and InterconnectionAgreements

Green Energy Option Processing of RE Applications

Mainstreaming RE: Information and EducationCampaigns, Regional and Area-basedDevelopment


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RENEWABLE ENERGY PLANSAND PROGRAMS

RE-based On-Grid Capacity Installation Targets

[1]Based on existing RE Service/Operating Contracts awarded and being evaluated by the DOE. The aspirational target of 1,528 MW solar power capacity will still be pursued.


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THE ROAD STARTS HERE


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Jose Layug - Update on Implementation of the Philippines Renewable Energy Law