QuestionsQuestions (Republic Act No. 9513)
It is to accelerate exploration and development of renewable energy to achieve energy self-reliance and reduce dependence on fossil fuels; increase utilization by institutionalizing national/local capabilities and providing incentives; encourage RE as a tool to reduce harmful emissions while balancing growth and environmental/health protection; and establish necessary infrastructure and mechanisms to carry out the mandates of the Act and other existing laws.
RE Resources are those that do not have an upper limit on total quantity to be used, renew on a regular basis, and renewability is rapid enough to consider availability over an indefinite period. Included are biomass, solar, wind, geothermal, ocean energy, and hydropower conforming with internationally accepted norms and standards on dams and other emerging renewable technologies.
All stakeholders must contribute to growth of the renewable energy industry. The National Renewable Energy Board (NREB) sets the minimum percentage of generation from eligible RE resources and determines which sector RPS is imposed on a per-grid basis within one year from the Act’s effectivity.
To accelerate emerging RE development, the ERC (in consultation with the NREB) must formulate and promulgate FIT rules within one year. Key contents include priority connections to the grid, priority purchase/transmission/payment by grid operators, fixed tariffs by type of emerging RE, and application for a mandated number of years not less than 12 years.
The DOE establishes the REM and directs PEMC to incorporate REM rules into WESM rules. PEMC (under DOE supervision) creates a Renewable Energy Registrar that issues, keeps, and verifies RE Certificates corresponding to eligible RE energy generated; these certificates are used for RPS compliance.
The DOE establishes a program allowing end-users to choose renewable energy as their energy source. After DOE determines technical viability, end-users may directly contract from RE facilities through their respective distribution utilities, with mechanisms provided by TRANSCO, DUs, and PEMC; the billing should inform end-users what portion of consumption and charges are provided by RE.
Net-metering is a system where a distribution grid user has a two-way connection and is charged only for net consumption, with credit for overall contribution to the grid. Upon request by qualified end-users (subject to technical considerations and without discrimination), distribution utilities must enter into net-metering agreements, after ERC sets interconnection standards and pricing methodology.
They must include required connection facilities for RE-based power facilities in their Transmission and Distribution Development Plans, subject to DOE approval, and connection facilities are subject only to ancillary service covering such connections.
Within one year from effectivity, NPC-SPUG must source a minimum percentage of its total annual generation from available RE resources in off-grid areas (based on NREB recommendation and as determined by DOE) for missionary electrification; eligible RE generation can qualify for RE certificates.
Government share is 1% of gross income of RE resource developers from sale and incidental income arising from RE generation/transmission/sale, except indigenous geothermal which is 1.5%. The government waives its share from proceeds of micro-scale projects for communal purposes and non-commercial operations not greater than 100 kW.
It includes: Income Tax Holiday (ITH) for 7 years (with rules for additional investments); duty-free importation of RE machinery/equipment/materials within 10 years with DOE endorsement; special realty tax rates (not exceeding 1.5%); Net Operating Loss Carry-Over rules; corporate tax rate of 10% after ITH; accelerated depreciation if no ITH is received; zero VAT for sale of fuel/power generated from renewables and zero-rated VAT on purchases needed for development.
For RE exploration, development, utilization, and operations, it suffices to secure the ECC from the corresponding DENR regional office; this overrides the referenced requirement under the Local Government Code provision cited in Section 16.
ERC/DUs are addressed through TRANSCO technical rules. Qualified registered RE generating units with intermittent RE resources are treated as “must dispatch” based on available energy and enjoy priority dispatch, and provisions preventing “must dispatch” are deemed amended/modified. Intermittent RE includes wind, solar, run-of-river hydro, and ocean energy.
Power/electricity generated through RE systems for the generator’s own consumption and/or for free distribution in off-grid areas is exempt from payment of the universal charge under Section 34 of RA 9136.
The RETF enhances development and wider utilization of RE. It is administered by DOE as a special account in a GFI and is used for: RE research/R&D/demonstration/promotion (including scholarships); competitiveness support for new RE resources; nationwide resource/market assessments; and propagation of RE knowledge and other activities incidental to the Act’s objectives. Funding sources include emissions fees (RA 8749); 1.5% shares of PCSO and PAGCOR net annual income; 1.5% of PNOC net annual dividends to national treasury; contributions/grants/donations; 1.5% of government share from indigenous non-renewable energy resources; revenue from RETF utilization; and fines/penalties under the Act.
Prohibited acts include: noncompliance with RPS rules; willful refusal to undertake net metering with qualified users; falsification/tampering of public documents/records to avail incentives; failure or willful refusal to issue the single certificate under Section 26; and noncompliance with DOE guidelines for implementation. Penalties include imprisonment of 1 to 5 years, and/or fines ranging from P100,000 to P100,000,000, or twice the damages caused/costs avoided, whichever is higher, plus possible administrative fines by DOE; without prejudice to DENR or other environmental penalties.