Shell, PNOC tie up for solar energy projects

Shell Renewable Philippines Corp. (SRPC), a subsidiary of Shell Group of Companies, will sign an agreement with state-owned Philippine National Oil Co. (PNOC) to develop solar energy sources in some remote areas of the country.

Outgoing Shell chairman Oscar S. Reyes said they would specifically study the possibility of providing solar energy to the far flung areas in Regions 1 and 2 and in the Cordillera region.

"We have been talking with the PNOC and the local cooperatives of these said provinces to explore the possibility of promoting the use of solar energy as an alternative source of power in these areas," Reyes said.

SRPC is one of the energy development arms of Shell Group, designed to enhance the use of indigenous, and new and renewable energy sources (NREs) in the country.

Most of the investors in the power sector are eyeing to venture into NRE-related projects since the government itself is trying to promote the use of indigenous sources of energy and lessen dependence on imported fuel oil.

The Department of Energy has been urging the Malacañang for the inclusion of the NRE projects in its Investment Priority Plan (IPP).

The IPP is a list of priority industries and service areas that are eligible for incentives.

The DOE has prepared a number of incentives to make the renewable energy industry more attractive to investors.

At present, incentives offered by the Board of Investments (BOI) in the energy sector are limited to the construction of big power plants.

Among the incentives being worked out by the DOE are: income tax holiday of up to seven years, exemption on the value-added tax (VAT) and other duties for imported materials.

The DOE noted that the price on a peso per kilowatt-hour using NREs will be much lower than the oil-based power plant. Therefore, it said if prices of fuel will remain at the same level then energy from NRE like wind, solar will be very, very competitive. It said that there should be a move to remove those barriers to attract investments.

Aside from NREs, the other areas to be included in the IPPs are the information and communications technology, electronics, infrastructure, banking, retail trade and agriculture modernization sectors. – Donnabelle Gatdula