Abesamis, Maraya Lara D.

Summer
Group 3 Ambassador Amado S. Tolentino, Jr.

Republic Act 9513

Renewable Energy Act of 2008

Renewable Energy Act of 2008 is an act that promotes the development,

utilization, of commercialization of renewable energy sources. It was enacted in
order to accelerate the exploration and development of renewable energy
resources 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 which affects
the economy.1 This act aims to increase the utilization and encourage the
development of renewable energy resources to effectively prevent or reduce
harmful emissions to balance the goals of economic growth and development
with the protection of health and the environment.2 In line with this purpose, the
Department of Energy in consultation with the legislation promulgated
Department Circular No. DC-2009-05-0008, which is otherwise known as the
“Implementing Rules and Regulations of Republic Act No. 9513.”

This department circular provides the rules, regulations, and guidelines for
the exploration, development, utilization, and commercialization of renewable
energy resources such as biomass, solar, wind, hydro power, geothermal, and
ocean energy sources, including application of hybrid systems and other
emerging renewable energy technologies in the Philippines for the generation,
transmission, distribution, sale, and use of electricity, and fuel generated from
renewable energy resources.3 It establishes the framework for the accelerated
sustainable development and advancement of renewable energy sources, and
the development of a strategic program to increase the utilization of such.4 It
provides for the clarification of specific provisions in RA 9153 as well as the
responsibilities and functions of various government agencies, institutions,
government-owned and controlled corporations and local government units, the
private sector and other stakeholders, and their relationships with the National
Renewable Energy Board (NREB).5 It also gives direction and support for
existing and new renewable energy developers and manufacturers, fabricators,
and suppliers of locally-produced renewable energy equipment.6

Just like the regalian doctrine, all forces of potential energy and other natural
resources are owned by the State and shall not be alienated such as potential
energy sources such as kinetic energy from water, marine current and wind;
thermal energy from solar, ocean, geothermal and biomass.7 Hence, the
8.Renewable Energy Act of 2008, RA 9153, Sec<on 2
9.Id.
10.Rules and Regula<ons Implemen<ng RA 9153, Dept. Circ. No. DC2009-05-0008, Sec. 2
11.Id.,
12.Id.,
13.Id.
14.Rules and Regula<ons Implemen<ng RA 9153, Dept. Circ. No. DC2009-05-0008, Sec. 19
exploration, development, production, and utilization of natural resources shall
be under the full control and supervision of the State. There may be a co-
production, joint venture or co-production sharing agreements with Filipino
citizens or corporations or associations whereby 60% of whose capital is owned
by Filipinos. Nonetheless, in order to avoid restricting the progress of achieving
the goals of the Renewable Energy Act, foreign developers may also be allowed
to undertake renewable energy development through a renewable energy
Service/Operating Contract with the government subject to the provisions of the
Constitution.8

There are different methods which the State established for the furtherance
of the purpose of this act. One of which is to establish a Renewable Portfolio
Standard which is a policy which places an obligation on electric power industry
participants such as generators, distribution utilities, or suppliers to source or
produce a specified fraction of their electricity from eligible renewable energy
resources, as may be determined by National Renewable Energy Board (NREB).
The Renewable Portfolio Standards rules includes types of renewable energy
resources as well as the identification and certification of generating facilities
using said resources which shall be required to comply with the Renewable
Portfolio Standard obligations; the yearly minimum Renewable Portfolio
Standard requirements upon the establishment of the Renewable Portfolio
Standard Rules; the annual minimum incremental percentage of electricity sold
by each RPS-mandated electricity industry participant which is required to be
sourced from eligible renewable energy resources and which shall, in no case,
be less than one percent (1%) of its annual energy demand over the next ten
(10) years; the technical feasibility and stability of the transmission and/or
distribution grid systems; the means of compliance by RPS-mandated electricity
industry participant of the minimum percentage set by the government to meet
the Renewable Portfolio Standard requirements including direct generation from
eligible renewable energy resources, contracting the energy sourced from
eligible renewable energy resources, or trading in the REM.9 There is also the
implementation of the Feed-in-Tariff System which is a scheme that involves the
obligation on the part of electric power industry participants to source electricity
from renewable energy generation at a guaranteed fixed price applicable for a
given period of time, which shall in no case be less than twelve (12) years, to be
determined by the ERC to accelerate the development of emerging renewable
energy resources through a fixed tariff mechanism.10 The Green Energy Option
Program is also implemented which is a mechanism to be established by the
DOE which shall provide end-users the option to choose renewable energy
resources as their source of energy. Any end-user who shall enroll under the
Green Energy Option program shall be informed, by way of its monthly electric
bill, how much of its monthly energy consumption and generation charge is
provided by renewable energy facilities. 11 There also is the Net-Metering for
Renewable energy which is a consumer-based renewable energy incentive
scheme wherein electric power generated by an end-user from an eligible on-site
4.Rules and Regula<ons Implemen<ng RA 9153, Dept. Circ. No. DC2009-05-0008, Sec. 19
5.Rules and Regula<ons Implemen<ng RA 9153, Dept. Circ. No. DC2009-05-0008, Sec. 4
6.Rules and Regula<ons Implemen<ng RA 9153, Dept. Circ. No. DC2009-05-0008, Sec. 5
7.Rules and Regula<ons Implemen<ng RA 9153, Dept. Circ. No. DC2009-05-0008, Sec. 6
RE generating facility and delivered to the local distribution grid may be used to
offset electric energy provided by the Distribution Utility to the end-user during
the applicable period. It shall encourage end-users to participate in renewable
electricity generation. Upon request by distribution end-users, the Distribution
Utility shall, without discrimination, enter into Net-Metering agreements with
qualified end-users, entities that generate electric power from an eligible on-site
renewable energy generating facility, such as house or office building with
photovoltaic system that can be connected to the grid who will be installing an
Renewable Energy System, subject to technical and economic considerations,
such as the Distribution Utility metering technical standards for the Renewable
Energy System.12 Furthermore, the Transmission and Distribution System
Development was created to effect connection of renewable energy-based
power facilities with the transmission or distribution system upon receipt of a
formal notice of the approval by the Department of Energy and the start of the
commercial operations of such renewable energy-based power facilities.13

The institutionalization of the development of national and local capabilities

in the use of renewable energy systems, and promotion of its efficient and cost-
effective commercial application are effected by providing fiscal and non-fiscal
incentives. The fiscal incentives are: Income Tax Holiday (ITH) which fully
exempts from income taxes levied by the National Government those duly
registered renewable energy developers for at least 7 years but not exceeding
21 years; exemption from duties on renewable energy machinery, equipment,
and materials within the first ten (10) years from the issuance of a Certificate of
Registration; Special Realty Tax Rates on Equipment and Machinery and other
improvements by a registered RE Developer actually and exclusively used for
Renewable Energy facilities which shall not exceed one and a half percent
(1.5%) of their original cost less accumulated normal depreciation or net book
value; Net Operating Loss Carry-Over (NOLCO) of the RE Developer during the
first three (3) years from the start of commercial operation shall be carried over
as a deduction from gross income for the next seven (7) consecutive taxable
years immediately following the year of such loss provided that the NOLCO had
not been previously offset as a deduction from gross income and that the loss
should be a result from the operation and not from the availment of incentives
provided for in the Act; Registered RE Developers shall pay a corporate tax of
ten percent (10%) on their net taxable income as defined in the National Internal
Revenue Code; in cases where renewable energy project fails to receive an ITH
before full operation, the RE Developer may apply for accelerated depreciation in
its tax books and be taxed on the basis of the same; Zero Percent Value-Added
Tax Rate shall be applied to sale of fuel from RE sources or power generated
from renewable sources, purchase of local goods, properties and services
needed for the development, construction, and installation of the plant facilities of
RE Developers, whole process of exploration and development of RE sources
up to its conversion into power; Tax Exemption of Carbon Credits; 100 percent
Tax Credit on Domestic Capital Equipment and Services Related to the
Installation of Equipment and Machinery.
1.Rules and Regula<ons Implemen<ng RA 9153, Dept. Circ. No. DC2009-05-0008, Sec. 7
2.Rules and Regula<ons Implemen<ng RA 9153, Dept. Circ. No. DC2009-05-0008, Sec. 8
3.Rules and Regula<ons Implemen<ng RA 9153, Dept. Circ. No. DC2009-05-0008, Sec. 13