DOE to push for renewable energy law

The Department of Energy (DOE) will push for the enactment into law this year of a renewable energy program as part of government measures to cushion the public from the impact of escalating crude oil prices in the world market.

"The DOE is taking this lead following President Gloria Macapagal-Arroyo’s directive during her State of the Nation Address (SONA) and we intend to work closely with Congress to immediately pass this into law," said Energy Secretary Raphael M. Lotilla..

Lotilla noted that prices have remained at unprecedented highs with crude oil still above $50 per barrel. He said President Arroyo is making the renewable energy bill as one of the administration’s two priority legislative measures.

He said the President’s move boosts the DOE’s thrust to make renewable energy sources such as wind, hydro, geothermal, solar and biomass more competitive, noting that the recently enacted expanded value-added tax (EVAT) provides for zero-rated VAT for renewable sources of power and fuel.

The DOE is now holding group discussions with stakeholders to determine issues and concerns on the proposed measure.

The bill pending at the Lower House is a substitute bill, which is a consolidation of House Bills 765, 1068, 1347, 1583, 3016 and 3017 authored by Rep. Alipio V. Badelles, Harlin C. Abayon, Rafael P. Nantes, Proceso J. Alcala, Augusto H. Baculio and Arnulfo P. Fuentebella. In the Sen. Senators Juan Flavier, Edgardo Angara and Jinggoy Estrada have filed counterpart bills.

The measure seeks to promote the development of renewable energy sources specifically in the electricity industry by mandating all power generating companies to source a percentage of their power supply from renewable energy sources. Renewable energy sources like geothermal and hydro accounted for 18 percent and 15 percent, respectively, in the country’s power generation mix for 2004.

The bill also aims to increase the utilization of renewable energy by providing additional fiscal and non-fiscal incentives to project proponents.

Several incentives are currently given for the development of renewable energy. These include income tax holidays and exemptions from or reduced real property tax, tax on domestic capital, and import duties.

The Philippine Export and Import Bank is also extending guarantees for private sector investments on renewable energy projects, the most recent of which was the Bangui wind farm in Ilocos Norte.

Lotilla said the Development Bank of the Philippines has also opened a financing package worth P50 billion for renewable energy projects.

He added that the increased dependence on renewable and indigenous energy sources would consequently bring down the country’s import bill amounting to P324 billion annually. Imported oil accounts for about 37.91 percent of the country’s energy requirements.

Our goal is to reduce dependence on imported oil to 28 percent in 2010 from the present 37.91 percent and thereby, yield considerable foreign exchange savings for the government," Lotilla said.