Challenges and Incentives for Renewable Energy Project · 2014. 9. 25. · •National Renewable...

Challenges and Incentives for Renewable Energy Project

Philippine Landfill Gas Forum Workshop Eastwood Richmonde Hotel, Q.C. 21 February 2012

Ruby B. de Guzman OIC-Chief Biomass Energy Management Division

• National Renewable Energy Outlook (2011-2030)

• RE Policy Framework • Incentives for RE Project • Challenges • The Way Forward • Registered Landfill Gas Projects under R.A. 9513

OUTLINE OF PRESENTATION

2009 RE POLICY FRAMEWORK - NREP • 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 - 265 MW Solar - at least 280 MW Ocean energy - at least 10 MW

INCENTIVES FOR RENEWABLE ENERGY PROJECT

Non-fiscal Incentives

• Renewable Portfolio Standard (RPS) – Mandatory (percentage) utilization of RE

generation system in on-grid systems • Feed-in Tariff

– Priority connection to the grid – Priority purchase and transmission of and payment

for by grid system operators – Fixed tariff for at least 20 years – To be applied for generation utilized in complying with RPS

INCENTIVES FOR RENEWABLE ENERGY PROJECT

Non-fiscal Incentives

• Green Energy Option – End-users’  option  to  purchase  electricity  from  RE  

facilities (open access) • Net Metering

– Connection  /  sale  of  customers’  RE  generation  to  the grid

• Renewable Energy Market – Creation of separate RE market – Establishment of RE Registrar for certification of

RE generation which can be used for RPS compliance

INCENTIVES FOR RENEWABLE ENERGY PROJECT

Non-fiscal Incentives

• Transmission and Distribution System – Interconnection with the grid system

• Intermittent RE Resources – Priority  (“must”)  dispatch

• Off-grid RE Development – Mandated minimum percentage of RE generation – Eligible for RE Certificates

INCENTIVES FOR RENEWABLE ENERGY PROJECT

Fiscal Incentives for RE Resource Developers • Government Share

– 1% of gross income on RE development projects, except geothermal resources

– 1.5% for geothermal resources – Exemptions: biomass and micro-scale projects for

communal purposes and non-commercial operations (up to 100kW)

• Income Tax Holiday (ITH) – 7-year tax holiday, including new investments but not to exceed 3 times

INCENTIVES FOR RENEWABLE ENERGY PROJECT

Fiscal Incentives for RE Resource Developers

• Duty-free Importation – 10-year exemption from tariff duties

• Special Realty Tax Rate on Equipment and Machinery • Net Operating Loss Carry Over

– 3-year losses carried over 7 years, except those resulting from availment of other incentives

• Corporate Tax Rate – 10% of net taxable income after ITH – Not to exceed 1.5% of original cost

INCENTIVES FOR RENEWABLE ENERGY PROJECT

Fiscal Incentives for RE Resource Developers

• Tax Exemption on Carbon Credits

• Zero Percent Value Added Tax(VAT) Rate – 0% on sale of fuel or power generated from RE

sources

• Cash Incentive for Missionary Electrification – 50% of the universal charge due

INCENTIVES FOR RENEWABLE ENERGY PROJECT

Fiscal Incentives for RE Commercialization

• Tax and Duty-free Importation of Components, Parts and Materials – Exemption from importation tariff and duties and

value added tax • Tax Credit on Domestic Capital Components, Parts

and Materials – 100% equivalent of custom duties and value

added tax

INCENTIVES FOR RENEWABLE ENERGY PROJECT

Fiscal Incentives for RE Commercialization

• Income Tax Holiday – 7-year tax exemption

• Zero-rated Value Added Tax Transactions – 0% VAT on transactions with local suppliers of

goods, properties and services

INCENTIVES FOR RENEWABLE ENERGY PROJECT

Other Incentives

• For Farmers Engaged in Plantation of Biomass Resources – 10-year Duty-free importation and value added tax

exemption on all types of agricultural inputs, equipment and machinery

• Tax Rebate for Purchase of RE Components – RE equipment for residential, industrial and

community use

CHALLENGES

• Integrating RE into grid operations • Reducing red tape on promoting RE investments • Regulatory environment at the local government

level • Social acceptability

THE WAY FORWARD

• Setting of Renewable Portfolio Standards (RPS) and Feed-In-Tariff (FIT) Rates

• Formulation of Guidelines on other RE Policy Mechanism (Net Metering, Green Energy Option, etc.)

• Establish Energy Investment Coordinating Center and Linkages with other Government Regulatory Agencies

- NEDA PPP One-Stop-Shop (DTI/BOI/DOF/BIR/BOC) - DENR/EMB, FMB, LMB, NSWMC - NWRB/NCIP

THE WAY FORWARD

• Resource Inventory and Establishment of RE Database

• Capacity Building/information, Education and Communication Campaigns

• Investment Missions/Business Meetings

REGISTERED LANDFILL GAS PROJECTS UNDER R.A. 9513

• 4.0 MW Bacavalley Energy, Inc. (San Pedro, Laguna)

• 14.8 MW Montalban Methane Power Corporation (Rodriguez, Rizal)

• 1.2 MW Pangea Green Energy Philippines, Inc. (Payatas, Quezon City)

Thank You and Mabuhay………..

www.doe.gov.ph