Press Release
September 29, 2008

Zubiri: Senate version of Renewable Energy Bill to boost RE investments

"The Senate provided a seven-year income tax holiday and a fixed 5% gross income tax thereafter to entice renewable energy developers to invest in the Philippines," Senator Juan Miguel Zubiri said.

"We all know that RE projects are very expensive as compared to fossil fuel-based energy plants and could scare away potential funders for these particular investments. 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."

"Therefore, the Senate deemed it appropriate to provide the investors this tax holiday as well as lower corporate tax rates in order for them to survive the first phase of costly construction and operations thereby making the projects economically viable. This will definitely encourage large-scale investments in this environment-friendly RE industry in the country."

Despite long years of Congressional work on the renewable energy bill, "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."

Power and electricity from RE resources for generator's own consumption and/or free distribution in off-grid areas shall also be exempt from the Universal Charge under Section 34 of the Electric and Power Industry Reform Act or RA 9136.

The Senate is set to approve the Renewable Energy bill (Senate Bill 2046) today with substantial 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 Green House Gases and reduce energy prices."

In recognition of the need to hasten the development and dispatch of RE, the Senate also provided for government share equal to one percent (1%) of the gross income of RE developers on sale of RE produced and other incidental income from RE generation, transmission and sale of electricity.

Likewise, intermittent RE resources are to be treated "must dispatch" and enjoy the benefit of priority dispatch. The Energy Regulatory Commission shall amend wholesale Electricity Spot Market rules, distribution and grid codes while the Philippine Electricity Market Corporation and Transmission Corporation shall implement technical mitigation and improvements for safe and reliable electricity transmission.

(Renewable energy resources refer to energy resources that do not have an upper limit on the total quantity to be used. Such resources are renewable on a regular basis and whose renewal rate is relatively rapid to consider availability over an indefinite period of time. These include, among others, biomass, solar, wind, geothermal, ocean energy and hydropower conforming with internationally accepted norms and standards on dams, and other emerging RE technologies.)

News Latest News Feed