Senate approves renewable energy bill

MANILA, Philippines – Voting 18-0, the Senate yesterday approved simultaneously on second and third reading the Palace-certified Renewable Energy Bill, which offers attractive incentives to renewable power developers.

The measure, if enacted, provides a seven-year income tax holiday and a fixed five percent gross income tax thereafter to investors.

“This will definitely encourage large-scale investments in this environment-friendly RE industry in the country,” Sen. Juan Miguel Zubiri, principal author of the measure, said.

The senators allowed the simultaneous approval of the bill on second and third reading because President Arroyo had already certified the measure.

Each stage of legislative approval should at least have a three-day gap.

“We all know that renewable energy projects are very expensive as compared to fossil fuel-based energy plants and could scare away potential funders for these particular investments,” Zubiri said.

“However, the beauty of RE power plants is that the high investment costs are only at the beginning of the project during the building of its infrastructure, then costs taper off during operations since power is generated from cost-free renewable sources like wind, solar, hydro, geothermal, and, don’t need imported fossil fuels such as coal and bunker fuel to continue to operate,” Zubiri said.

The passage of the bill came a few hours after members of the majority went into a caucus to discuss the priority bills which they intend to pass in the next two weeks before Congress goes on break on Oct. 9.

Senate Majority Leader Francis Pangilinan said the majority senators wanted to pass as many bills before the congressional break. 

Zubiri said the incentives offered under the Renewable Energy bill would ensure that investors survive the first phase of costly construction and operations of the required facilities.

After long years of congressional work on the renewable energy bill, Zubiri said, “only the escalating price of petroleum in the world market effectively pressured legislators to tackle the renewable energy bill with urgency.”

“Consumers who will adopt RE technologies for their own use will also enjoy incentives,” he said.

Zubiri said the Renewable Energy bill or Senate Bill 2046 provides incentives “that will give us clean energy as it would spur further investments in the sector in compliance with international Climate Change conventions such as reduction of greenhouse gases and reduce energy prices.”

Also based on the measure, the government is entitled to share equal to one percent of the gross income of RE developers.

Renewable energy resources include biomass, solar, wind, geothermal, ocean energy and hydropower.

International environmental group Greenpeace welcomed the passage of the bill at the Senate.

Greenpeace, in a report, said that renewable energy can provide as much as 57 percent of the country’s energy needs by 2030, and 70 percent by 2050.

The report also detailed how solar energy can provide as much as 4,700 megawatts of installed power capacity in the Philippines by 2030 and as much as 13,000 MW by 2050, while wind power can provide 15,000 MW by 2030 and 22,000 MW by 2050.