Mario C.

Marasigan
OIC Assistant Secretary Department of Energy

I. Energy Security
Increase indigenous oil and gas reserves development ! Strengthen and enhance energy efficiency and conservation program
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! Aggressively develop renewable energy potential such as biomass, solar, wind and biomass solar ocean resources
! Increase use of alternative fuels ! Form strategic alliance with other countries

II. Power Sector Reforms

! Create a transparent privatization process ! Create an investment climate attracti e to in estors in estment attractive investors

omas / Biofuels eothermal olar Power ydropower cean ind Power

Provide fiscal incentives and mandate the use of biofuelblended gasoline and diesel fuels
BIODIESEL
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2008 consumption of 91 million liters (CME) 1% biodiesel blend sold in all gasoline stations 2% biodiesel blend by Feb. 6, 2009

BIOETHANOL
Actual production of 611,235 liters p , " Start of 5% by total volume mandate on Feb. 6, 2009
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Accelerate the development of the countrys renewable energy yp g p resources by providing fiscal and non-fiscal incentives to private sector investors and equipment manufacturers / suppliers.

Accelerate the exploration and development of f renewable energy resources

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achieve energy self-reliance, to reduce the countrys dependence on fossil fuels minimize the country s exposure to price fluctuations countrys adoption of clean energy to mitigate climate change

Increase the utilization of renewable energy b I th tili ti f bl by providing fiscal and non fiscal incentives;

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Increase RE-based capacity by 100% within the next 10 years (2009-2020) (2009 2020) Increase non-power contribution of RE to the energy mix by 10 MMBFOE in the next ten years
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Be the number one geothermal energy producer in the world (additional 1,070 MW) Be the number one wind energy producer in Southeast Asia (additional 515 MW) Double hydro capacity by 2018 (additional 3,400 MW) Expand contribution of; p

# biomass 200 MW # solar 30 MW # ocean energy 120 MW

RESOURCE

EXISTING CAPACITY in year 2008 (MW)

TARGET capacity

TOTAL in 2020

Geothermal Hydro Wind Solar Biomass o ass Ocean Total

2,027 2 027 3,367 33 5 68 0 5,500 ,

1,070 1 070 3,400 515 30 200 120 5,355 ,

3,097 3 097 6,767 548 35 268 120 10,835 ,

Moving Towards Accelerated Development

Approval of RA 9513 2008

2010
S all capac ty Small capacity RE projects are added to the grid; big RE projects are in the pipeline

2015
Emergence of ocean E f energy projects, e.g. OTEC, wave, marine and tidal

2020

2030

Current RE activities 4.8% demand growth rate

Policy is in place; salient provision of the law will spur Interest; activities on RE development is expected to accelerate

Commercialization of ocean energy project options

1
2-year development of RE database and enhancement of techl expertise of RE stakeholders

2
5-year continuing RE project packaging and Intensive promotional activities

3
Diversification of RE resources; database preparation and Project packaging of emerging technologies

4
Development Of ocean energy projects

Double RE capacity (4.8% growth rate) (4 8%

- 8,072.3 MW capacity available in Luzon - 2,442.6 MW capacity available in Visayas - 2,963.6 MW capacity available in Mindanao

Optimization of RE Resources

Establishment of the Renewable Energy Management Bureau

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DOEs lead unit in the implementation of the Act Operationalized on 14 July 2009 Creation f the Interim Negotiating P C ti of th I t i N ti ti Panel f RE S i / l for Service Operating Contracts on 09 September 2009

Creation of the National Renewable Energy Board

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Created Sub-committees and working groups to facilitate the g g formulation of mechanisms, rules and guidelines on the ffg.:
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Renewable Portfolio Standard / Feed In Tariff Net Metering Green Energy Option Renewable Energy Trust Fund

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)
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Duty-free Importation y p
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10-year exemption from tariff duties

Tax Credit on Domestic Capital Equipment and Services

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Equivalent to 100% of custom duties and value-added tax

y (ITH) ) Income Tax Holiday (

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7-year tax holiday, including new investments but not to exceed 3 times 10% of net taxable income after ITH 3-year 3 year losses carried over 7 years except those resulting from years, availment of other incentives

Corporate Tax Rate p

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Net Operating Loss Carry Over

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Accelerated Depreciation
Non-availment Non availment of ITH " Depreciation rate not exceeding twice the normal
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Zero Percent Value Added Tax Rate

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0% on sale of fuel or power generated from RE sources

p y q p y Special Realty Tax Rate on Equipment and Machinery

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Not to exceed 1.5% of original cost 50% of the universal charge due Generators own consumption Free distribution in off-grid areas off grid Average per kWh rate of all other electricity transmitted through g the grid Exemption for the sale of CER

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Cash Incentive for Missionary Electrification

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Exemption from Universal Charge Payment of Transmission Charges

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Tax Exemption on Carbon Credits

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y p p Tax and Duty-free Importation of Components, Parts and Materials

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Exemption from importation tariff and duties and value added tax

Tax Credit on Domestic Capital Components, Parts and Materials

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100% equivalent of custom duties and value added tax 7-year tax exemption 0% VAT on transactions with local suppliers of goods, properties and services

Income Tax Holiday

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Zero-rated Zero rated Value Added Tax Transactions

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Renewable Portfolio Standard (RPS)

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Mandatory (percentage) utilization of RE generation system in on-grid systems Priority connection to the grid Priority purchase and transmission of and payment for by grid system operators Fixed tariff for at least 12 years To be applied for generation utilized in complying with RPS

Feed-in Tariff
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Green Energy Option

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End-users option to purchase electricity from RE facilities (open access) Connection / sale of customers RE generation to the grid id Creation f C ti of separate RE market t k t Establishment of RE Registrar for certification of RE generation which can be used for RPS compliance

Net Metering
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Renewable Energy Market

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Transmission and Distribution System

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Interconnection with the grid system Priority (must) dispatch Mandated minimum percentage of RE generation Eligible for RE Certificates

Intermittent RE Resources
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Off-grid RE Development g p
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For Farmers Engaged in Plantation of Biomass Resources

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10-year Duty-free importation and value added tax exemption on all types of agricultural inputs, equipment and machinery RE equipment for residential, industrial and community use

Tax Rebate for Purchase of RE Components

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Status of RE Registration / Accreditation

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Geothermal Resource 1,200 MW Hydropower - 10,500 MW Wind resources 76 600 MW 76,600 Micro-hydro untapped vast potential Solar Energy Average potential 5kWh/m2/day Ocean energy - 170,000 MW Biomass (bagasse) total potential of 235.7 MW 235 7

p 26 September 2009
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7 Renewable Energy Projects approved under RA 9513

23 October 2009
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87 Renewable Energy Projects approved under the RA 9513

23 November 2009
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Opening of Bids for 10 Geothermal Projects p g j

December 2009
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Over 60 Renewable Energy Projects under process f O R bl E P j t d for approval

! Installed capacity of 2,027.1 MW 2 027 1 ! Worlds largest user for power generation (25% of power mix) ! Potential of 1,200 MW more

Legend

Advance Exploration Producing Fields Potential Areas

458.53 MW MakBan, Laguna

PHILIPPINE GEOTHERMAL PRODUCING FIELDS

344 MW Tiwi, Albay

LUZON
49.38 MW Northern, Negros 151.5 MW Bacman, Albay/Sorsogon

722.68 MW Kananga/Ormoc, Leyte

VISAYAS

192.5 MW Palinpinon, Southern Negros

108.48 MW Mt. Apo, Kidapawan, Cotabato

MINDANAO

ent/10-26-2007

Converted Existing Contracts

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5 Projects of Energy Development Corp. (1,180MW) 2 Projects of Aboitiz-Chevron (802MW) j ( )

Open and Competitive Selection (for public bidding)

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10 Proposed Projects

Contracts Under Evaluation

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11 Frontier areas F ti

Existing: (3,367.07 MW)

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21 Large Hydro: 3,220.10 MW total installed capacity Large-Hydro: 55 Mini-Hydro: 91.03 MW total installed capacity 135 Micro-Hydro: 1.08 MW total installed capacity

On-going Projects: (2,932.5 MW)

Under Construction (8 projects; 16.0 MW) Under Development Stage (22 projects; 86.91 MW) Luzon Visayas Mindanao 2,253 2 253 MW 150 MW 1,034 MW

Targets*: (3,400 MW)

*Targets was based on updated 2008 2030 REPF as pdated

Awarded New Renewable Energy Contracts

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41 Projects 463 MW

Converted Existing Contracts

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17 Projects 110 MW

New RE Contracts under Evaluation

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3 Existing Contracts for conversion 11.8 MW 3 Development Projects 44.3 MW 27 Pre-development Projects 1,193.6 MW

6 Identified Regions
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Philippine Wind Energy Potential Map

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Batanes and Babuyan Islands Northwestern Luzon Higher interior terrain of Luzon, Mindoro, Samar, Leyte, Panay, Negros, Cebu, Palawan, Eastern Mindanao Well-exposed east-facing coastal locations from Northern Luzon southward to Samar The wind corridors between Luzon and Mindoro (including Lubang Island) Between Mindoro and Panay (including the y( g Semirara & Cuyo Island)

A 2003 WWF study identified potential sites with power density of at least 500 W/m2 and transmission line cost of not over 25% of levelized cost of combined generation and transmission costs.
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Philippine total potential is about 7,400 MW pp p , covering 1,038 wind sites

Awarded New Renewable Energy Contracts

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23 Projects 879 MW

Converted Contracts
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120-MW in Burgos, Ilocos Norte

New Contracts under Evaluation

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22 Frontier sites

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Nationwide potential 5 kWh/m2/day potential average; 4MWe aggregate installations for rural electrification 1 MW Existing Solar Power Plant hybrid to 7 MW hydro 1 MW indicative Solar Power Project in Casiguran Export Processing Zone, Aurora Province

Biomass resources include: " Wood and woodwastes W d d d t " Sugarcane residues (bagasse and cane trash) " Coconut residues (shells, husks and fronds) " Rice residues (husks, straws) " Municipal Solid Wastes " A i Animal Wastes, etc. lW t t

Awarded New Renewable Energy Contracts

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3 Projects 63.4 Mwe 63 4

Applications Under Evaluation

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14 Cogeneration Projects 170 MW

Accredited Biofuels Manufacturers

3 Bio-ethanol Fuel Production Plants (73.3M Lit/year) " 4 Biodiesel Production Plants (205M Lit/year) ( y ) 5 Biofuel projects for accreditation
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Awarded New Renewable Energy Contracts

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Deep Ocean Power Producer, Inc. 2 out of 36 proposed projects p p p j Primarily OTEC and marine current

Applications Under Evaluation

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8 Applications for Solar, Wind, and Bi A li ti f S l Wi d d Biomass E Energy Equipment, Components and Parts

g Establish Linkages with other Government Regulatory Agencies

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DTI /BOI DOF / BIR, BOC BIR DENR / EMB, FMB, LMB, NSWMC NWRB / NCIP

Resource Inventory and Establishment of RE Database Capacity Building / Information, Education and Communication Campaigns Investment Mi i I t t Missions / Business M ti B i Meetings

www.doe.gov.ph