The Philippines has paved the way for further development of its renewable energy resources with the passing of new legislation.
The Renewable Energy Bill was signed into law by president Gloria Macapagal-Arroyo in mid-December, some 20 years after it was first filed. It will help the country to foster sustainable economic growth as well as improve energy independence.
“The future is in clean, renewable energy, which is predicted to be one of the biggest industries in the next five years,” said energy secretary Angelo Reyes. “The benefits of renewable energy use are considerable. It will foster sustainable growth, energy independence and economic security for the country, and unite us with the global effort to stop climate change.”
The new bill provides a range of fiscal and non-fiscal incentives for renewable energy investors, and also provides for the creation of a Renewable Portfolio Standard (RPS) system, which would require electricity suppliers to source a certain level of energy from renewables.
Renewable energy investment in the Philippines has slowed in recent years, according to the government, but the passage of the bill is expected to attract more investors and cement the plans of those with projects in the pipeline. The country’s Department of Energy aims to develop more than 4000 MW of renewable energy – including 1200 MW of geothermal energy – under its medium-term Renewable Energy Policy Framework.
The incentives brought by the new legislation include tax credits on domestic capital equipment and services, special realty tax rates on equipment and machinery, tax exemption on carbon credits, duty-free importation mechanisms and income tax holidays. “[These] will ultimately ensure a market for renewable energy and provide a system that will allow consumers to choose green sources of energy in the long term,” said Reyes.
The passing of the bill has been welcomed by a group of environmental groups and other Non-Governmental Organisations (NGOs) that formed a coalition to lobby for and promote the legislation.
“The Renewable Energy Law is expected to usher in an era of cleaner energy use in the country that will benefit generations to come,” said Catherine Maceda of the Renewable Energy Coalition. “Net benefits in the amount of $1.23 billion are expected with the development of some 4000 MW of electricity from renewable energy resources. This amount can be directed to fund other development needs of the country.”
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