Sponsorship Speech
Senate Bill No. 1531 / Committee Report No. 141

AN ACT INSTITUTIONALIZING ENERGY EFFICIENCY AND CONSERVATION, ENHANCING THE EFFICIENT USE OF ENERGY, GRANTING INCENTIVES TO ENERGY EFFICIENCY AND CONSERVATION PROJECTS, AND FOR OTHER PURPOSES

August 1, 2017 at 3 o'clock in the afternoon
Session Hall, Senate of the Philippines

Delivered by HON. WIN GATCHALIAN, Senator of the Republic:

Mr. President, honorable peers in the Senate, a pleasant afternoon to you all.

Usually, when we talk about energy and the economy, more is better. The focus is to meet the ever increasing power demands of a growing economy by increasing energy supply. In essence, the simple arithmatic of the matter is that the more electricity we have to consume, the more productivity we can squeeze out of the economy.

Mr. President, the bill I am sponsoring on the Senate floor today, however, takes a different approach to addressing the perennial need for more energy. The empirical foundations of this piece of legislation shows that when it comes to energy consumption, less is actually more. The "less is more" theory stems from the two central concepts of this bill.

The first is energy efficiency - the way of managing and restraining the growth in energy consumption resulting in the delivery of more services for the same energy input or the same services for less energy input.

The second is energy conservation, which refers to the reduction of losses and wastages from energy production to energy consumption through the adoption of technologically-feasible, economically sound, environmentally-friendly, and socially affordable meaures.

Mr. President, a simple example of energy efficiency and conservation at work is something that is becoming more and more common these days - the motion-sensitive LED lightbulb. Compared to conventional lightbulbs, the LED lightbulb requires less electricity to produce the same amount of light. This makes it more efficient. Meanwhile, the motion sensor makes sure that the LED lightbulb only turns on when there is someone within its vicinity. This embodies conservation, because it eliminates wastage and makes sure that the lightbulb only consumes power at times when we need the lights on.

Now, Mr. President, obviously this is a simple example. Yet, employing these easy concepts in the big picture can make a fundamental change in Philippine energy policy. In the long run, by institutionalizing energy efficiency and conservation standards, we will be enhancing the stability, sustainability, and affordability of our energy supply while driving economic productivity to even greater heights. This is supported by three decades worth of experience of advanced countries with high levels of energy consumption.

The 29-member International Energy Agency estimates that energy efficiency investments made by its member countries since 1990 saved their citizens 550 billion U.S. dollars in 2014 alone. Included in the saved energy costs is 80 billion U.S. dollars due to reduced fossil fuel imports. This decrease in fossil fuel use also had a significant effect on environmental sustainability, reducing carbon dioxide emission by 10 billion tonnes from 1990 to 2015.

Meanwhile, further research from the International Energy Agency in a 2014 study titled "Capturing the Multiple Effects of Energy Efficiency" outlines even more direct and indirect impacts of energy efficiency policy on economic activity. For example, an analysis of GDP changes due to large-scale energy efficiency policies shows a positive effect on economic growth, ranging anywhere from 0.25% to 1.1% per year. Energy efficiency policies also positively impact employment opportunities, showing a potential for job creation ranging from 8 to 27 jobs per year per 1 million euro invested in energy efficiency measures.

In addition, energy efficiency policies have been found to have a positive effect on the finances of government as well as that of private enterprises. The study points to lower government spending on energy, increased tax revenues due to more robust economic activities, and long-term savings on public energy subsidies and incentives.

To synthesize, Mr. President, energy efficiency and conservation strategies cover all three fronts of the 3S vision for energy which has guided our legislative agenda for energy. First, these policies boost the stability of the energy supply by ensuring that we are able to maximize the existing power supply. The reduced need to generate additional power in turn enhances the sustainability of the energy supply by avoiding additional greenhouse gas emissions. Most importantly, the mix of efficiency and conservation outcomes leads to consumer savings in the long run.

However, Mr. President, despite the clear empirical benefits of implementing a national energy efficiency policy framework, the Philippines remains to be the only ASEAN member-state without national legislation on the matter. And while there exists an Energy Efficiency and Conservation Roadmap under the Philippine Energy Plan 2016 to 2030 there remains a need to legislate this to institutionalize the country's energy efficiency policies, empower DOE to effectively implement them, and to mandate energy end-users to pursue energy efficiency.

Mr. President, having outlined the benefits of instituting a comprehensive energy efficiency policy framework and underscored the need for legislative action, allow me finally to go through the salient points of Senate Bill No. 1531. At this point, I would like to thank the authors of the two bills which served as the basis for the committee report I am sponsoring today: Senate Bill No. 30, filed by our esteemed peer and my good friend, Senator Loren Legarda; and Senate Bill No. 525, filed by the honorable gentleman from the minority, Senator Antonio Trillanes IV.

Mr. President, in essence, the Energy Efficiency and Conservation Act of 2017 lays down a solid foundation for a comprehensive energy efficiency policy framework in the following ways.

First, the bill instructs all energy end-users to use energy resources efficiently and promote the development and utilization of new and alternative energy efficient technologies and systems. Second, it mandates the creation of the National Energy Efficiency and Conservation Plan, and the development and maintenance of a National Energy Efficiency and Conservation Database.

Next, the bill integrates energy efficiency and conservation into local governance, empowering LGUs through the creation of a Local Energy Efficiency and Conservation Plan, and the integration of the Guidelines on Energy Conserving Design on Buildings in the issuance of building permits.

To bring these efficiency standards to life, the bill requires the development, implementation, and review of Minimum Energy Performance standards for first, energy-consuming products such as machinery, equipment, and appliances, and second, the commercial, industrial, and transport sectors. It also requires the creation of an energy efficiency rating and labeling system, guidelines on energy conserving design for buildings; and fuel economy performance labeling for transport vehicles.

The bill will also identify Designated Establishments based on annual energy consumption. These energy-intensive establishments will have to meet certain obligations, such as the establishment of targets, plans, and methods for the implementation of energy efficiency and conservation projects; the employment either of a Certified Energy Conservation Officer or a Certified Energy Manager to meet these targets; the submission of an annual Energy Consumption and Conservation Report; and the conduct of a triennial Energy Audit.

To encourage widespread compliance with the worthy goals and strict standards set by the measure, the bill will also provide incentives to establishments that will implement or are implementing energy efficient projects. These incentives will be in the form of fiscal incentives through the Board of Investment's annual investment priorities plan under the Omnibus Investment Code, non-fiscal incentives through awards and recognition, as well as technical assistance from government agencies and financial assistance from government financial institutions.

The provisions of this Act will be implemented by the Department of Energy, which will be designated as the lead agency in planning, formulation, development, implementation, enforcement, and monitoring of energy management policies and other energy efficiency and conservation initiatives. To effectively execute its mandate, DOE is given the power to: examine and test energy-consuming products for verification of compliance with Minimum Energy Performance standards; visit and conduct on-site inspections of Designated Establishments; and impose fines and penalties for violations.

Mr. President, to ensure that the government will lead by example in energy efficiency and conservation practices, this bill will also establish the Inter-Agency Energy Efficiency and Conservation Committee. The committee will be charged with approving Government Energy Efficiency Projects and implementing the Government Energy Management Program. Through this, all current and future government buildings will be required to meet the standards set by this Act. This includes, of course, the future Senate building.

In sum, Mr. President, the Energy Efficiency and Conservation Act of 2017 will institute a comprehensive and detailed energy efficiency and conservation regime in the Philippines, aimed at enhancing the stability and sustainability of the Philippine energy supply, with resulting consumer savings. I am confident that the passage of this legislation will foster robust inclusive economic growth as we strive to meet the country's ambitious long-term socio-economic goals. This legislation has been a long time coming, and it is encouraging to see that the Philippines has come one step closer to meeting the international standard of energy efficiency.

Thank you Mr. President.