Philippines – 384 proposed renewable energy projects

AT least 384 renewable energy service contracts are awaiting the approval of the Department of Energy. The proposed projects could generate 6,046 megawatts, almost equal to the current energy consumption of the Luzon grid.

Most of pending applications, 193, are for hydroelectric plants with a combined capacity of 3,591 MW. There are 70 pending proposals for solar power (for a combined output of 537 MW), 59 for wind energy (1,431 MW) and 195 MW for biomass.

There are 21 applications for ocean energy development, an emerging technology, which could generate about 60 MW. For geothermal energy projects, there are 15 applications with a generation potential of 230 MW.

The DOE has awarded 236 service contracts for renewable energy sites since the RE law was signed in 2008. The total investment that could come from the development of these RE contracts is placed P87.72 billion. Once developed, these sites can generate 2,823 MW.

None of the investors earlier awarded with service contracts have entered the development stage. The renewable energy developers said that they are awaiting the approval by the Energy Regulatory Commission of the proposed feed-in tariff rates.

The FITs are the guaranteed price at which renewable energy developers will be paid for the energy that they will produce and inject into the transmission or distribution system.

The NREB filed the last month the proposed FIT rates to the ERC. They are P7 per kilowatt hour for biomass, P6.15 per kWh for hydroelectric, P10.37 per kWh for wind power, P17.65 per kWh for ocean energy, and P17.95 per kWh for solar energy. The NREB said that it sees the approval of the FIT rates by August.

The FIT is one of the incentives for renewable energy developers incorporated in the Renewable Energy Act. The incentives in the RE Act include tariff exemption and zero value-added tax on importation of machinery and equipment for the first 10 years of an operating contract, and tax credit on domestic capital equipment and services.

Special tax rates will also be given for equipment and machinery to be used for renewable energy development. An income tax holiday will be granted to investors for the first seven years of commercial operation.