14/07/2022
READ | Explanatory Note
It has long been the policy of the State to ensure a secure, reliable, quality, and affordable supply of energy through the integrated and intensive exploration, production, management, and development of the country’s indigenous energy resources, among others.
To this end, the Renewable Energy Act of 2008 or Republic Act (RA) No. 9513 (“RE Act”) was enacted to 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, through the adoption of sustainable energy development strategies to reduce the country’s dependence on fossil fuels and thereby minimize the country’s exposure to price fluctuations in the international markets, not to mention the nation’s commitment to sustainable environment. To implement this policy, the RE Act granted fiscal and non-fiscal incentives to promote the efficient and cost-effective commercial application of the RE System. Part of these incentives is the Feed-In-Tariff (FIT) System.
According to the International Renewable Energy Agency (IRENA), the Philippines had 6.84GW of renewable energy capacity in 2020, which accounted for 27% of its total power generation capacity. The Department of Energy (DOE) seeks to increase this share to 35% by 2030. The fiscal and non-fiscal incentives offered by the State received an overwhelming response from the investors. The DOE issued a large number of service contracts for both solar and wind, in excess of the FIT limit. To date, the installation caps for solar and wind have been met, while the caps for run-off-river hydropower have not yet been fulfilled.
Hence, in 2021, the DOE initiated the auction program for the FIT participants through the establishment of the Green Energy Auction Program (“GEAP”) which aims to promote RE as one of the country’s primary sources of energy through the competitive selection of RE facilities.
Ultimately, this bill seeks to strengthen the policies of the DOE and the implementation of the GEAP.