Tuesday, December 16, 2008

RENEWABLE ENERGY ACT 2008-REPUBLIC OF THE PHILIPPIINES

From: "kgma_news"
Date: December 16, 2008 3:40:46 AM EST
To: kgma@yahoogroups.com
Subject: [kgma] PGMA signs Renewable Energy Act of 2008 today
Reply-To: kgma@yahoogroups.com

President Gloria Macapagal-Arroyo signed this morning the Renewable
Energy Act of 2008, to boost her administration’s program to make the
Philippines 60 percent energy self-sufficient by 2010.

The new act is also expected to mitigate the global problem of climate
change.

The President said the new legislation is the “first and most
comprehensive renewable energy law in Southeast Asia” that will enable
the Philippines to capture a part of the soaring investments in
renewable energy development worldwide pegged at $71 billion last year.

“With our Renewable Energy Act, we can now move aggressively to
develop these resources,” the President said referring to solar,
biomass, geothermal, hydropower, wind and ocean energy technologies.

This is so because the new law provides the legal and institutional
framework necessary for harmonizing policies on the swift development
of renewable energy technologies.

“From 45 percent before our administration, we became 57 percent
self-sufficient in energy in 2007, as we aim now to reach 60 percent
by 2010, thanks in part to legislation and in part to the development
of our renewable energy resources,’ the President said.

The President also said that not only did the ‘politically unpopular”
new revenue measures helped tide off the impact of the global economic
slowdown on the Philippines but also her focus on building up new
industries such as the biofuels industry, and now, the renewable
energy industry.

The President also noted that the Philippines is the second largest
geothermal power producer in the world, the highest wind power
potential in the region, and one with the highest solar power
penetration and abundant hydropower and biomass resources.

“There have been big leaps in renewable energy development throughout
the globe in recent years,’ she also noted.

The Renewable Energy law aims to accelerate the exploration and
development of renewable energy resources as well as to increase the
utilization of renewable energy by institutionalizing the development
of national and local capabilities in the use of renewable energy
systems, and promoting its efficient and cost-effective commercial
application by providing fiscal and non-fiscal incentives.

The law also encourages the development and utilization of renewable
energy resources as effective tools to prevent or reduce harmful
emissions and thereby balancing the goals of economic growth and
development with the protection of health and the environment. The new
act also intends to establish the necessary infrastructure to carry
out the mandates specified in the law and other relevant existing laws.

The new law provides a seven-year income tax holiday and tax
exemptions for the carbon credits generated from renewable energy
sources. A 10% corporate income tax, as against the regular 30%, is
also provided once the income tax holiday expires; energy
self-sufficiency to 60% by 2010 from 56.6% in 2005, by tapping
resources like solar, wind, hydropower, ocean and biomass energy;
renewable energy facilities will also be given a 1.5% realty tax cap
on original cost of equipment and facilities to produce renewable energy.

The law also prioritizes the purchase, grid connection and
transmission of electricity generated by companies from renewable
energy sources and power generated from renewable energy sources will
be value added tax-exempt.

A study done by the WWF and the University of the Philippines National
Engineering Center showed that the country can save as much as $2.9
billion from avoided importation of fossil fuel by merely increasing
the country's renewable energy share in its power generation mix from
0.16% to 41%.

Today, 26% of the country's power comes from burning imported coal,
whilst 23% comes from burning oil. Last year the country imported
101.4 million barrels of oil, costing $7.5 billion.

An analysis by the Renewable Energy Coalition showed renewable energy
sources can reduce the country's oil imports by half, and the savings
can be used for social and infrastructure programs.

Specifically, the law aims to:

1. Accelerate the development of renewable energy resources to achieve
energy self-reliance through the exploration, development and
utilization of renewable energy resources such as, but not limited to,
biomass, solar, wind, hydropower, geothermal, and ocean energy sources
or hybrid systems;

2. Increase the utilization of renewable energy by institutionalizing
its use, developing national and local capabilities in the use of
renewable energy systems and promoting its efficient utilization and
widespread commercial application by providing fiscal and non-fiscal
incentives; and,

3. Establish the necessary infrastructure to carry out the mandates of
the DOE under other existing laws.

The Department of Energy, in its implementation of the RE Law will be
assisted by the National Renewable Energy Board composed of RE
stakeholders in formulating and providing policy guidelines to ensure
the proper implementation of the Law.

Energy Secretary Angelo Reyes said the implementation of this Act will
redound to greater benefits to the country through a substantial
savings in imported fuel, which can be used to augment the budget for
social development. The reduction in greenhouse gas emissions as a
result of increase utilization of renewable energy can mitigate health
cases and promote the longevity of the lives of Filipinos and the
future generation.

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