challenges and incentives for renewable energy project · 2014. 9. 25. · •national renewable...
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Challenges and Incentives for Renewable Energy Project
Philippine Landfill Gas Forum Workshop Eastwood Richmonde Hotel, Q.C. 21 February 2012
Ruby B. de Guzman OIC-Chief Biomass Energy Management Division
• National Renewable Energy Outlook (2011-2030)
• RE Policy Framework • Incentives for RE Project • Challenges • The Way Forward • Registered Landfill Gas Projects under R.A. 9513
OUTLINE OF PRESENTATION
2009 RE POLICY FRAMEWORK - NREP • Increase RE-based capacity by 200% within the next 20
years • Increase non-power contribution of RE to the energy mix
by 10 MMBFOE in the next ten years • Be the number one geothermal energy producer in the
world (additional 1,495 MW) • Be the number one wind energy producer in Southeast
Asia (up to 2,500 MW) • Double hydro capacity (additional 5,400 MW) • Expand contribution of:
Biomass - 265 MW Solar - at least 280 MW Ocean energy - at least 10 MW
INCENTIVES FOR RENEWABLE ENERGY PROJECT
Non-fiscal Incentives
• Renewable Portfolio Standard (RPS) – Mandatory (percentage) utilization of RE
generation system in on-grid systems • Feed-in Tariff
– Priority connection to the grid – Priority purchase and transmission of and payment
for by grid system operators – Fixed tariff for at least 20 years – To be applied for generation utilized in complying with RPS
INCENTIVES FOR RENEWABLE ENERGY PROJECT
Non-fiscal Incentives
• Green Energy Option – End-users’ option to purchase electricity from RE
facilities (open access) • Net Metering
– Connection / sale of customers’ RE generation to the grid
• Renewable Energy Market – Creation of separate RE market – Establishment of RE Registrar for certification of
RE generation which can be used for RPS compliance
INCENTIVES FOR RENEWABLE ENERGY PROJECT
Non-fiscal Incentives
• Transmission and Distribution System – Interconnection with the grid system
• Intermittent RE Resources – Priority (“must”) dispatch
• Off-grid RE Development – Mandated minimum percentage of RE generation – Eligible for RE Certificates
INCENTIVES FOR RENEWABLE ENERGY PROJECT
Fiscal Incentives for RE Resource Developers • Government Share
– 1% of gross income on RE development projects, except geothermal resources
– 1.5% for geothermal resources – Exemptions: biomass and micro-scale projects for
communal purposes and non-commercial operations (up to 100kW)
• Income Tax Holiday (ITH) – 7-year tax holiday, including new investments but not to exceed 3 times
INCENTIVES FOR RENEWABLE ENERGY PROJECT
Fiscal Incentives for RE Resource Developers
• Duty-free Importation – 10-year exemption from tariff duties
• Special Realty Tax Rate on Equipment and Machinery • Net Operating Loss Carry Over
– 3-year losses carried over 7 years, except those resulting from availment of other incentives
• Corporate Tax Rate – 10% of net taxable income after ITH – Not to exceed 1.5% of original cost
INCENTIVES FOR RENEWABLE ENERGY PROJECT
Fiscal Incentives for RE Resource Developers
• Tax Exemption on Carbon Credits
• Zero Percent Value Added Tax(VAT) Rate – 0% on sale of fuel or power generated from RE
sources
• Cash Incentive for Missionary Electrification – 50% of the universal charge due
INCENTIVES FOR RENEWABLE ENERGY PROJECT
Fiscal Incentives for RE Commercialization
• Tax and Duty-free Importation of Components, Parts and Materials – Exemption from importation tariff and duties and
value added tax • Tax Credit on Domestic Capital Components, Parts
and Materials – 100% equivalent of custom duties and value
added tax
INCENTIVES FOR RENEWABLE ENERGY PROJECT
Fiscal Incentives for RE Commercialization
• Income Tax Holiday – 7-year tax exemption
• Zero-rated Value Added Tax Transactions – 0% VAT on transactions with local suppliers of
goods, properties and services
INCENTIVES FOR RENEWABLE ENERGY PROJECT
Other Incentives
• For Farmers Engaged in Plantation of Biomass Resources – 10-year Duty-free importation and value added tax
exemption on all types of agricultural inputs, equipment and machinery
• Tax Rebate for Purchase of RE Components – RE equipment for residential, industrial and
community use
CHALLENGES
• Integrating RE into grid operations • Reducing red tape on promoting RE investments • Regulatory environment at the local government
level • Social acceptability
THE WAY FORWARD
• Setting of Renewable Portfolio Standards (RPS) and Feed-In-Tariff (FIT) Rates
• Formulation of Guidelines on other RE Policy Mechanism (Net Metering, Green Energy Option, etc.)
• Establish Energy Investment Coordinating Center and Linkages with other Government Regulatory Agencies
- NEDA PPP One-Stop-Shop (DTI/BOI/DOF/BIR/BOC) - DENR/EMB, FMB, LMB, NSWMC - NWRB/NCIP
THE WAY FORWARD
• Resource Inventory and Establishment of RE Database
• Capacity Building/information, Education and Communication Campaigns
• Investment Missions/Business Meetings
REGISTERED LANDFILL GAS PROJECTS UNDER R.A. 9513
• 4.0 MW Bacavalley Energy, Inc. (San Pedro, Laguna)
• 14.8 MW Montalban Methane Power Corporation (Rodriguez, Rizal)
• 1.2 MW Pangea Green Energy Philippines, Inc. (Payatas, Quezon City)