DOE targets P95 billion worth of RE investments

CEBU, Philippines - The Department of Energy (DOE) expects to realize a total of P95 billion worth of investments in the renewable energy projects in the Philippines in the next two to three years.

DOE undersecretary Roy V. Kyamko announced that the agency has contracted 87 projects for renewable energy plants that will be situated in different areas across the country, including Central Visayas.

Aside from these 87 approved contracts for renewable energy plants, the department is currently evaluating over a hundred applications of similar investments.

“We are hopeful that the Philippine can hit the target of providing 5,000 MegaWatt power sourced from renewable energy by 2020,” Kyamko said.

The signing of Renewable Energy Act of 2008 into Law in December of last year, has paved the way for stronger interest among foreign investors to establish renewable energy plants in the Philippines, Kyamko said.

In Central Visayas, investors are looking at maximizing the hydro, biomass to produce renewable energy.

The Renewable Energy Act of 2008, it gives incentives to investors and energy producers to build renewable energy power plants instead of fossil fuel based ones.

According to Kyamko, DOE is also closely coordinating with Board of Investment (BOI) to immediately provide and assure fiscal perks to these investors.

“There are actually a lot of inquiries from both local and foreign investors on renewable energy investments in the Philippines. Most of them are attracted by the incentives offered through the Renewable Energy Act, “he said.

Renewable energy is energy generated from natural resources, such as sunlight, wind, rain, tides, and geothermal heat, which are renewable or naturally replenished.

Record showed that in 2006 about 18 percent of global final energy consumption came from renewable, with 13 percent coming from traditional biomass, like wood-burning.

Power generated from renewable energy sources will be value added tax-exempt and a net metering scheme will give capable consumers the option to generate their own power.

Net metering will allow renewable energy producers to earn from the power they contribute to the grid, and are also charged for electricity drawn from the grid.

Hydroelectricity was the next largest renewable source, providing three percent (15 percent of global electricity generation), followed by solar hot water/heating, which contributed 1.3 percent. Modern technologies, such as geothermal energy, wind power, solar power, and ocean energy together provided some 0.8 percent of final energy consumption.

The RE Act promises several benefits to renewable energy investors, these are; seven year income tax holiday; carbon credits generated from renewable energy sources will be free from taxes; a 10 percent corporate income tax, as against the regular 30 percent, is also provided once the income tax holiday expires; energy self-sufficiency to 60 percent by 2010 from 56.6 percent in 2005, by tapping resources like solar, wind, hydropower, ocean and biomass energy; renewable energy facilities will also be given a 1.5 percent realty tax cap on original cost of equipment and facilities to produce renewable energy.

The bill also prioritizes the purchase, grid connection and transmission of electricity generated by companies from renewable energy sources.