ENERGY

The Renewable Energy Act and

the Biofuels Act
 State of the Philippine Energy Sector
In 2017, natural and man-made disasters hit some parts of the
country, coupled with the continued concerns on forced outages of
large power generation plants, as well as the transmission and
distribution system. The most notable of these is the 6.5 magnitude
earthquake in the Visayas (Jaro, Leyte) which occurred in the second
half of 2017, damaging geothermal power generation,
transmission and distribution facilities, and resulted to the total loss of
power in the provinces of Samar, Leyte, and Bohol. In Mindanao, the
Marawi Siege led to the multiple partial blackout in the franchise area
of the Lanao Del Sur Electric Cooperative (LASURECO) and total
blackout in Marawi City. In view of these incidents, the DOE
initiatives to integrate in its plans, policies, and programs the energy
resiliency, performance assessment of the power industry
participants to improve energy security and reliability were very
timely.
 State of the Philippine Energy Sector
The country’s total peak demand in 2017 was recorded at 13,789
MW, which is 517 MW or 3.9% higher than the 13, 272 MW in 2016.
On the other hand, the total power supply, in terms of installed
capacity, grew by 6.1% from 21,425 MW in 2016 to 22,730 MW in
2017.

A total of 835 MW new capacities were added to the country’s supply

base in 2017 which include coal-fired (630 MW), solar (127 MW),
oil-based (77 MW), and hydropower (1 MW).

In terms of share by grid, Luzon contributed 392 MW or 47%,

Mindanao at 337 MW or 40% and Visayas at 106 MW or 13%. The
year also saw the end of the constrained demand in Mindanao which
grew by 6.5% or 107 MW from 1,653 MW in 2016 to 1,760 MW in
2017. Philippine Power System continued to exhibit its resiliency and
stakeholders’ unified actions in the onslaught of challenges in 2017.
 Energy Sources in the Philippines
Main Sources Indigenous Sources

○ Petroleum ● Coal and Lignite

○ Coal ● Hydro
○ Hydro ● Geothermal
● Gas

Since 1960, both resources, But in an era of escalating

coal and hydro, have been petroleum prices, they can be
left underdeveloped as the considered as potential
country enjoyed easy access substitutes if existing
to external supplies of cheap resources are properly
petroleum. developed.
 Renewable Energy Act
AN ACT PROMOTING THE DEVELOPMENT,
UTILIZATION AND COMMERCIALIZATION OF
RENEWABLE ENERGY RESOURCES AND FOR
OTHER PURPOSES
Renewable Energy

● Energy generated from natural resources and

can be generated again and again as and when
required.
● Low carbon emissions
● Example:
○ Geothermal, Solar, Wind, Hydroelectric energy.
Declaration of Policies (Sec 2.)
(a) Accelerate the exploration and development of renewable energy
resources such as, but not limited to, biomass, solar, wind, hydro,
geothermal and ocean energy sources, including hybrid systems, to
achieve energy self-reliance

(b) Increase the utilization of renewable energy by providing fiscal

and non-fiscal incentives

(c) Encourage the development and utilization of renewable energy

resources as tools to effectively prevent or reduce harmful emissions

(d) Establish the necessary infrastructure and mechanism to carry out the
mandates
Definition of Terms (Sec. 3)
"Biomass energy systems" are energy systems which use
biomass resources to produce heat, steam, mechanical power or
electricity through either thermochemical, biochemical or
physico-chemical processes, or through such other technologies
which shall comply with prescribed environmental standards
pursuant to this Act.

"Biomass resources" refer to non-fossilized, biodegradable

organic material originating from naturally occurring or cultured
plants, animals and micro-organisms, including agricultural
products, by-products and residues that can be used in
bioconversion process and other processes, as well as gases and
liquids recovered from the decomposition and/or extraction of
non-fossilized and biodegradable organic materials.
Definition of Terms (Sec. 3)
"Co-generation systems" refer to facilities which produce
electrical and/or mechanical energy and forms of useful thermal
energy such as heat or steam which are used for industrial,
commercial heating or cooling purposes through the sequential use
of energy.

"Energy Regulatory Commission" (ERC) refers to the

independent quasi-judicial regulatory agency created pursuant to
Republic Act No. 9136.

"Grid" refers to the high voltage backbone system of

interconnected transmission lines, substations, and related
facilities, located in each of Luzon, Visayas, and Mindanao, or as
may otherwise be determined by the ERC in accordance with
Republic Act No. 9136.
Definition of Terms (Sec. 3)
"Off-Grid Systems" refer to electrical systems not connected
to the wires and related facilities of the On-Grid Systems of
the Philippines.

"On-Grid System" refers to electrical systems composed of

interconnected transmission lines, distribution lines,
substations, and related facilities for the purpose of
conveyance of bulk power on the grid of the Philippines.
 On Grid Renewable
Energy Development
On Grid Systems
to electrical systems composed of interconnected
transmission lines, distribution lines, substations,
and related facilities for the purpose of conveyance
of bulk power on the grid of the Philippines.
Renewable Portfolio Standard or the RPS (Sec 6.)

All stakeholders in the electric power industry shall contribute

to the growth of the renewable energy industry of the country.
Towards this end, the National Renewable Energy Board
(NREB), created under Section 27 of this Act, shall set the
minimum percentage of generation from eligible renewable
energy resources and determine to which sector RPS shall
be imposed on a per grid basis within one (1) year from the
effectivity of this Act.

Sec 27 is on the creation of the NREB.

Feed-In Tariff System (Sec 7.)
● A system where renewable energy developers on on-grid areas
can recover their investments and provides them with
internationally acceptable returns
● Basically aims to accelerate the development of competitive
renewable energy technologies and to not unduly burden the
consumers with heavy pass-on charges
● Covers biomass, solar, hydro, ocean and wind, excluding
generation for own use.
Feed-In Tariff System (Sec 7.)
To accelerate the development of emerging renewable
energy resources, a feed-in tariff system for electricity
produced from wind, solar, ocean, run-of-river hydropower
and biomass is hereby mandated.

Towards this end, the ERC in consultation with the National

Renewable Energy Board (NREB) created under Section 27
of this Act shall formulate and promulgate feed-in tariff
system rules within one (1) year upon the effectivity of this
Act which shall include, but not limited to the following:
Feed-In Tariff System (Sec 7.)
(a) Priority connections to the grid for electricity generated from emerging
renewable energy resources such as wind, solar, ocean, run-of-river
hydropower and biomass power plants within the territory of the Philippines;

(b) The priority purchase and transmission of, and payment for, such
electricity by the grid system operators;

(c) Determine the fixed tariff to be paid to electricity produced from each type
of emerging renewable energy and the mandated number of years for the
application of these rates, which shall not be less than twelve (12) years;

(d) The feed-in tariff to be set shall be applied to the emerging renewable
energy to be used in compliance with the renewable portfolio standard as
provided for in this Act and in accordance with the RPS rules that will be
established by the DOE.
Green Energy Option (Sec 9.)
The DOE shall establish a Green Energy Option program
which provides end-users the option to choose RE
resources as their sources of energy. In consultation with
the NREB, the DOE shall promulgate the appropriate
implementing rules and regulations which are necessary,
incidental or convenient to achieve the objectives set forth
herein.
Green Energy Option (Sec 9.)

Upon the determination of the DOE of its technical

viability and consistent with the requirements of the green
energy option program, end users may directly contract
from RE facilities their energy requirements distributed
through their respective distribution utilities.
Consistent herewith, all relevant parties are hereby mandated to provide
the mechanisms for the physical connection and commercial
arrangements necessary to ensure the success of the Green Energy
Option. The end-user who will enroll under the energy option program
should be informed by way of its monthly electric bill, how much of its
monthly energy consumption and generation charge is provided by RE
facilities.
Net-metering for Renewable Energy (Sec 10.)
● Refers to a system, appropriate for distributed generation
in which a distribution grid user has a two-way
connection to the grid.
● A distribution grid user is only charged for his net
electricity consumption and is credited for any overall
contribution to the electricity grid.
Net-metering for Renewable Energy (Sec 10.)

Subject to technical considerations and without discrimination and upon

request by distribution end-users, the distribution utilities shall enter into
net-metering agreements with qualified end-users who will be installing
RE system.

The ERC, in consultation with the NREB and the electric power industry
participants, shall establish net metering interconnection standards and
pricing methodology and other commercial arrangements necessary to
ensure success of the net-metering for renewable energy program within
one (1) year upon the effectivity of this Act.
Net-metering for Renewable Energy (Sec 10.)

The distribution utility shall be entitled to any Renewable Energy

Certificate resulting from net-metering arrangement with the qualified
end-user who is using an RE resource to provide energy and the
distribution utility shall be able to use this RE certificate in compliance with
its obligations under RPS.

The DOE, ERC, TRANSCO or its successors-in-interest, DUs, PEMC and

all relevant parties are hereby mandated to provide the mechanisms for
the physical connection and commercial arrangements necessary to
ensure the success of the Net-metering for Renewable Energy program,
consistent with the Grid and Distribution Codes.
Lead Agency

Department of Energy
 Creation of the National
Renewable Energy Board
(NREB)
Sec 27 RA 9153
Powers and functions of the NREB
(a) Evaluate and recommend to the DOE the mandated RPS
and minimum Renewable Energy generation capacities in
off-grid areas, as it deems appropriate;

(b) Recommend specific actions to facilitate the

implementation of the National Renewable Energy Program
(NREP) to be executed by the DOE and other appropriate
agencies of government and to ensure that there shall be no
overlapping and redundant functions within the national
government departments and agencies concerned;
Powers and functions of the NREB

(c) Monitor and review the implementation of the NREP, including

compliance with the RPS and minimum RE generation capacities in
off-grid areas;

(d) Oversee and monitor the utilization of the Renewable Energy

Trust Fund created pursuant to Section 28 of this Act and
administered by the DOE; and

(e) Perform such other functions, as may be necessary, to attain

the objectives of this Act.
Members of the NREB
● Chairperson
● 1 representative from the following agencies:
○ DOE, DTI, DOF, DENR, NPC, TRANSCO, PNOC and
PEMC
○ Or their successors in interest
● 1 representative from sectors
○ RE Developers, Government Financial Institutions (GFIs),
private distribution utilities, electric cooperatives, electricity
suppliers and non-governmental organizations
○ duly endorsed by their respective industry associations
● All appointed by the President
Renewable Energy Management Bureau
(a) Implement policies, plans and programs related to the accelerated
development, transformation, utilization and commercialization of
renewable energy resources and technologies;

(b) Develop and maintain a centralized, comprehensive and unified data

and information base on renewable energy resources to ensure the
efficient evaluation, analysis, and dissemination of data and information
on renewable energy resources, development, utilization, demand and
technology application;

(c) Promote the commercialization/application of renewable energy

resources including new and emerging technologies for efficient and
economical transformation, conversion, processing, marketing and
distribution to end users;
Renewable Energy Management Bureau
(d) Conduct technical research, socio-economic and environmental impact
studies of renewable energy projects for the development of sustainable
renewable energy systems;

(e) Supervise and monitor activities of government and private companies

and entities on renewable energy resources development and utilization to
ensure compliance with existing rules, regulations, guidelines and standards;

(f) Provide information, consultation and technical training and advisory

services to developers, practitioners and entities involved in renewable energy
technology and develop renewable energy technology development
strategies; and

(g) Perform other functions that may be necessary for the effective
implementation of this Act and the accelerated development and utilization of
the renewable energy resources in the country.
INCENTIVES

To encourage RE development, the RE Bill proposes

the grant of fiscal incentives to eligible proponents.
Such incentives include:
(1) income tax holiday;
(2) preferential realty tax rate; and
(3) exemption from import duties.
Prohibited Acts and
Penalties
Sec 35-36 RA 9153
Prohibited Acts

(a) Non-compliance or violation of the RPS rules;

(b) Willful refusal to undertake net metering arrangements with

qualified distribution grid users;

(c) Falsification or tampering of public documents or official records

to avail of the fiscal and non-fiscal incentives provided under this
Act;

(d) Failure and willful refusal to issue the single certificate referred
to in Section 26 of this Act; and

(e) Non-compliance with the established guidelines that DOE will

adopt for the implementation of this Act.
Penalty Clause applies to
● One who commits any of the prohibited acts

● One who aids or abets the commission or causes the

commission, shall be liable in the same manner as the
principal

● In the case of association, partnership or corporations, the

penalty shall be imposed on the partner, president, chief
operating officer, chief executive officer, directors or
officers responsible for the violation.
Penalty Clause

● Penalty of imprisonment of from one (1) year to five (5)

years, or a fine ranging P100,000 to P100 Million or twice
the amount of damages caused or costs avoided for
non-compliance, whichever is higher, or both upon the
discretion of the court.
● Administrative fines and penalties for any violation of the
provisions of this Act, its IRR and other issuances
● Without prejudice to the penalties provided for under
existing environmental regulations prescribed by the
DENR and/or any other concerned government agency.
Appropriations

Such sums as may be necessary for the initial

implementation of this Act shall be taken from the
current appropriations of the DOE.
Thereafter, the fund necessary to carry out the
provisions of this Act shall be included in the annual
General Appropriations Act.
Senate bill to develop natural gas as Malampaya
fields face decline

With the Malampaya gas field’s resources starting

to deplete, our legislators are now proposing for
the development of local natural gas industries all
throughout the country.

Source:
https://news.mb.com.ph/2018/06/21/senate-bill-to-develop-natural-gas-as-malampaya-fields-face-decline/?fbclid=IwAR3WJ3uN0J1W7
bmgr9r-8sOrGgtLiDXQhUUOQqwKEl2EkDu94icUNHnS39Y
 Southeast Asia’s Biggest Solar Farm opened in Negros
Occidental in 2016

The solar farm has started connecting to the grid on February

13, and is initially supplying an average of 30-MW through
the National Grid Corporation of the Philippines.

It is said that this132.5-megawatt solar farm is seen

to generate P45 million worth of annual revenues for the
local government.
BIOFUELS ACT OF 2006
RA 9367
AN ACT TO DIRECT THE USE OF BIOFUELS,
ESTABLISHING FOR THIS PURPOSE THE
BIOFUEL PROGRAM, APPROPRIATING FUNDS
THEREFOR, AND FOR OTHER PURPOSES
BIOFUELS ACT OF 2006
RA 9367

Basically provides FISCAL INCENTIVES

and MANDATES the USE of
BIOFUEL-BLENDED GASOLINE and
DIESEL FUELS
Declaration of Policy

Reduce dependence on imported fuels with due regard to the

protection of public health, the environment, and natural
ecosystems consistent with the country’s sustainable economic
growth

● develop and utilize indigenous renewable and

sustainably-sourced clean energy sources to reduce
dependence on imported oil;
● mitigate toxic and greenhouse gas (GHG) emissions;
● increase rural employment and income; and
● ensure the availability of alternative and renewable clean
energy without any detriment to the natural ecosystem,
biodiversity and food reserves of the country.
Mandatory use of locally-sourced biofuel
components
Minimum of one percent (1%) biodiesel by volume shall be blended
Three
months into all diesel engine fuels sold in the country

At least 5% bioethanol shall comprise the annual total volume of

gasoline fuel actually sold and distributed by each and every oil
company in the country

Two
years Minimum of two percent (2%) blend of biodiesel by volume which may
be increased taking into account considerations including but not
limited to domestic supply and availability of locally-sourced biodiesel
component

Minimum of ten percent (10%) blend of bioethanol by volume into all

Four gasoline fuel distributed and sold by each and every oil company in the
years country
Mandatory use of locally-sourced biofuel
components
In the event of supply shortage of locally-produced bioethanol
during the four-year period, oil companies shall be allowed to
import bioethanol but only to the extent of the shortage
Incentive Scheme

● No Specific Tax
● Sale of raw material used in the production is exempted from
VAT
● All water effluents from the production of biofuels used as liquid
fertilized and for other agricultural purposes are considered “reuse”
and are exempt from wastewater charges under the Philippine
Clean Water Act, subject to the evaluation and approval of DENR
and DA
● Governmental financial institutions shall accord high priority to
extend financing to Filipino citizens or entities at least 60% of the
capital stock which belongs to the Philippines involving biofuels
Prohibited Acts
a) Diversion of biofuels, whether locally produced or imported, to
purposes other than those envisioned in this Act;

b) Sale of biofuel-blended gasoline or diesel that fails to comply with the

minimum biofuel-blend by volume in violation of the requirement under
Section 5 of this Act;

c) Distribution, sale and use of automotive fuel containing harmful

additives such as, but not limited to, MTBE at such concentration
exceeding the limits to be determined by the NBB;

d) Noncompliance with the established guidelines of the PNS and DOE

adopted for the implementation of this Act; and

e) False labeling of gasoline, diesel, biofuels and biofuel-blended gasoline

and diesel.
Penal Provisions
● To one who commits any of the prohibited acts
● To one who aids or abets the commission or causes the
commission, shall be liable in the same manner as the
principal
● In the case of association, partnership or corporations, the
penalty shall be imposed on the partner, president, chief
operating officer, chief executive officer, directors or
officers responsible for the violation.
● penalty of imprisonment of from one (1) year to five (5)
years, or a fine ranging P1M to P5 Million
DOE’s role on imposing penalties

● Confiscate any amount of such products that fail to comply with the
requirements of Sections 4 and 5 of this Act, and implementing
issuances of the DOE.
● Determine the appropriate process and the manner of disposal and
utilization of the confiscated products.
● Stop and suspend the operation of businesses for refusal to comply
with any order or instruction of the DOE Secretary in the exercise of
his functions under this Act.
● Impose administrative fines and penalties for any violation of the
provisions of this Act, implementing rules and regulations and other
issuances relative to this Act.
Appropriations
● For the implementation:
○ Funds will be taken from appropriations of the Department
of Energy

● For the necessary fund to carry out the provisions:

○ Shall be included in the General Appropriations Act
Independent oil players are joining a consumer
group in seeking the suspension of the biofuels law
to drive the pump prices lower. They are also calling
for the removal of the value added tax on fuel to help
bring down the cost of oil.
 Ethanol producers oppose biofuels law
suspension. They say that it placed their P30
Billion investment at risk.

“Biofuels law is not about lowering the prices of gasoline, but about
rural development and the diversification of the sugar industry that
empowers marginalized farmers, including sugarcane farmers.”

“Bioethanol would free us from bondage from imported oil, from our
addiction to imported oil. Gasoline is a finite resource, sooner or
later it will be used up. The prices are now is just temporary, once
demand stays like this and supply starts diminishing that’s the end
of oil and the prices will go up. We are doing it now so that when
that scenario happens we are already quiet independent, we don’t
need much oil anymore.”
THANK YOU!