Philippines: Renewable energy revolutionaries

Heralded as a landmark move by the government, in December 2008, the Philippine president signed the Renewable Energy Act (RE Act), demonstrating the country’s commitment to developing renewable energy (RE) in its objective to utilise sustainable energy practices. The Act seeks to make the country 60% energy sufficient by 2010 and to mitigate problems caused by climate change. Investments in renewable energy sources not only contribute to the region’s sustainability but also reduce importing costs while boosting the local renewable energy industry and generating employment.

Map of Philippines - Source: WikiCommons
Map of Philippines - Source: WikiCommons

The Act is said to be the first and most comprehensive renewable energy legislation in Southeast Asia and would enable the Philippines to capture part of US$71billion investments in renewable energy development worldwide.

windmills.gifThe Philippines is blessed with rich renewable energy resources including robust wind energy sites, ideal solar conditions, and an abundance of hydro and biomass resource. It is therefore fitting that the nation takes advantage of this by encouraging industry development.

The RE Act seeks to spur the development of RE sources by providing incentives to investors, equipment manufacturers and suppliers. These include tax credits on domestic capital equipment and services, special realty tax rates on equipment and machinery, tax exemption of carbon credits, and duty-free importation mechanisms.

These include non-fiscal incentives such as

  1. The establishment of renewable portfolio standards (RPS) which would require electricity distributors to include a certain percentage of their supply from renewable energy sources
  2. A feed-in tariff system to help renewable energy projects become viable
  3. A green energy option, wherein users can choose energy from green sources and take advantage of incentives
  4. Net metering, wherein users and independent producers will only be billed on the net usage of power from the grid and can sell their excess power to the grid and
  5. The establishment of a renewable energy market whereby green energy credits are validated, certified and can be traded.

The Act has the capacity to see electric utilities required to source a certain amount of their energy supply from renewable resources, such as wind, solar, hydro, geothermal or biomass.

The region is proclaimed as holding the largest market for geothermal power in Asia and the world’s second largest market next to the United States. Under the Department of Energy’s medium-term Renewable Energy Policy Framework, the government aims to develop more than 4,000 MW of additional RE capacity, some 1,200 MW of which are planned to come from geothermal sources.

The Act can be downloaded here.

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