ROK-PH Partneship: Exploring Cooperation in Renewable Energy Mr. Ariel D. Fronda Division Chief, Geothermal Energy Management Division Renewable Energy Management Bureau Department of Energy 1

Government Policy National Renewable Energy Program  Increase RE-based capacity by 200% within the next 20 years ( )  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 (additional 1,495 MW)  Be the number one wind energy producer in Southeast Asia (up to 2,500 MW)  Double hydro capacity (additional 5,400 MW)  Expand contribution of;  biomass MW  solar - at least 280 MW  ocean energy – at least 10 MW 2

3 Landmark Laws Republic Acts Nos. (RA) 9367 and 9513

4 Provide fiscal incentives and mandate the use of biofuel-blended gasoline and diesel fuels BIODIESEL  2008 consumption of 91 million liters (CME)  1% biodiesel blend sold in all gasoline stations  2% biodiesel blend by Feb. 6, 2009 BIOETHANOL  Actual production of 611,235 liters  Start of 5% by total volume mandate on Feb. 6, 2009  Start of E10 mandate on Feb6, 2012 RA 9367: Biofuels Act of 2006

5 RA 9513: Renewable Energy Act of 2008 Accelerate the development of the country’s renewable energy resources by providing fiscal and non-fiscal incentives to private sector investors and equipment manufacturers / suppliers.

6 Policies under RA 9513  Accelerate the exploration and development of renewable energy resources  achieve energy self-reliance  to reduce the country’s dependence on fossil fuels  minimize the country’s exposure to price fluctuations  adoption of clean energy to mitigate climate change  promote socio-economic development in rural areas  Increase the utilization of renewable energy by providing fiscal and non fiscal incentives;

7 Policy Mechanisms  Lowering of investment costs  Fiscal Incentives  Income Tax Holiday and Low Income Tax Rate  Reduced Government Share  Duty-free Importation of Equipment and VAT-zero Rating  Tax Credit on Domestic Capital Equipment  Special Realty Tax Rate on Equipment and Machinery  Cash Incentive for Missionary Electrification  Exemption from Universal Charge  Payment of Transmission Charges  Tax Exemption on Carbon Credits

8 Policy Mechanisms  Enhanced Competitiveness  Mandatory Utilization of RE Resources  Biofuels Mandate  Renewable Portfolio Standard (RPS)  Feed-In Tariff (FIT)  Provision of Interconnection / Ancillary Services  Other Market Options  Net Metering Concept  Green Energy Option

9 Policy Mechanisms Renewable Portfolio Standards (RPS) The Renewable Portfolio Standard is a market based policy that requires the mandated electric power industry participant to source an agreed portion of their energy supply from eligible RE resources. - Final stages, for review and approval of the DOE Secretary.

10 Policy Mechanisms Feed-in-Tariff (FIT) A FIT is an energy supply policy that focuses on supporting the development of RE projects by offering long-term purchase agreements for the sale of the RE electricity and RE certificates. - The Energy Regulatory Commission (ERC) approved the Feed-in – Tariff (FITs) rates and equivalent degression rates for all RE technologies entitled to FITs except Ocean, which in relation to the approved installation targets, are as follows: RE Technology FIT Rate (PhP/kWh) Degression Rate Installation Target (MW) Wind % after 2 years from effectivity of FIT 200 Biomass % after 2 years from effectivity of FIT 250 Solar9.686% after 1 year from effectivity of FIT 50 Run-of-River Hydropower % after 2 years from effectivity of FIT 250

11 Policy Mechanisms Net-Metering Interconnection Standards The Net-Metering refers to a system, appropriate for distributed generation, in which a distribution grid user has a two-way connection to the grid and is only charged for his net-electricity consumption and is credited for any overall contribution to the electricity grid. - The Net Metering Rules endorsed to ERC seek only to establish the net-metering interconnection standards for RE while the pricing methodology will be addressed in another set of rules and will be endorsed to ERC in due course. -The ERC approved the Net Metering Rules last May 27, 2013

12 Policy Mechanisms Policy Mechanisms Renewable Portfolio Standards (RPS) for Missionary Areas Section 6, Chapter III & Section 4, Rule 2, Part II of its IRR requires that the Department of Energy (DOE), upon recommendation by the National Renewable Energy Board (NREB), shall issue, adopt and promulgate rules and regulations on the Renewable Portfolio Standards for Missionary Areas.

Where are we now? SUMMARY OF AWARDED RENEWABLE ENERGY PROJECTS (as of May 31, 2013) RESOURCES AWARDED PROJECTS POTENTIAL CAPACITY MW INSTALLED CAPACITY (MW) Grid-Use Own-Use Grid-Use Own-Use Grid-Use Own-Use Hydro Power , Ocean Energy Geothermal , Wind , Solar Biomass Sub-Total , , TOTAL 3375, , BIOFUELS REGISTRATION / ACCREDITATION RESOURCESNo. of CompaniesNo. of Projects Bioethanol77 Biodiesel 99 Total 16

14 The Way Forward RESOURCES PENDING APPLICATIONS POTENTIAL CAPACITY MW INSTALLED CAPACITY MW Grid-Use Own-Use Grid-Use Own-Use Grid-Use Own-Use Hydro Power 171 2, Ocean Energy 2 Geothermal Wind Solar Biomass Sub-Total , TOTAL2513, PENDING APPLICATIONS UNDER RE LAW

15 Renewable Energy Targets,

Thank you ! ! ! 16