We're Breaking Our Own Law on Renewable Energy
It’s often said that the Philippines has a lot of good laws, but that they lack implementation. The Renewable Energy Act (RA9513) is certainly one of those laws. When it was passed in 2008, it was a trailblazing piece of legislation that aimed to increase the percentage of renewable energy produced in the country, and reduce our dependence on imported coal and fossil fuel. In fact, it was the first renewable energy law in Southeast Asia.
And yet 10 years later, the percentage of renewable energy has actually decreased. “When the law was enacted, the renewable energy share in the Philippines was around 34% of the total power mix,” says Gerry Arances, executive director and head convenor of the Center for Energy, Ecology & Development (CEED). “Now, nag-iiba yung data depende sa periods. Just last quarter it was 29%. This year it’s around 31% in the last two quarters.”
On top of this disappointing development, it turns out that some major provisions of the law have yet to be implemented. Here’s what you need to know:
- Its Renewable Portfolio Standard (RPS) obliges utilities to generate a percentage of their electricity from renewable energy. According to Arances, this percentage is supposed to increase every year.
Section 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) . . . 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.
- It is supposed to encourage energy producers and consumers alike to switch to renewable energy through financial incentives.
Section 2: It is hereby declared the policy of the State to:
(b) 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 nonfiscal incentives
- RA 9513 declared the promotion and development of renewable energy (RE) as a State policy.
Section 2: It is hereby declared the policy of the State to:
(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, 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, the effects of which spiral down to almost all sectors of the economy
- The Green Energy Option program allows users to source their electricity directly from renewable energy companies.
Section 9: The Department of Energy (DOE) shall establish a Green Energy Option program which provides end-users the option to choose renewable energy resources as their sources of energy . . . 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.
- It establishes a Feed-in Tariff system as an incentive for companies that produce renewable energy. Basically, this means renewable energy companies get priority access to the electricity grid, and will be paid a fixed rate for a certain period of time.
Section 7: The Energy Regulatory Commission in consultation with the NREB . . . shall formulate and promulgate feed-in tariff system rules. . . which shall include:
(a) Priority connections to the grid for electricity generated from emerging renewable energy resources;
(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;
- The Net-metering system pays owners of solar panels for excess energy that gets fed back into the grid.
Section 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.
- It requires the National Power Corporation’s Small Power Utilities Group (NPC-SPUG)—which is charged with providing electricity to communities without access to the grid (off-grid areas)—to source a percentage of its energy from renewable resources.
Section 12: Within one (1) year from the effectivity of this Act, NPC-SPUG or its successors-in-interest and/or qualified third parties in off-grid areas shall, in the performance of its mandate to provide missionary electrification, source a minimum percentage of its total annual generation upon recommendation of the NREB from available RE resources in the area concerned, as may be determined by the DOE.
- It sets up a Renewable Energy Trust Fund for renewably energy promotion, development, and research.
Section 28: A Renewable Energy Trust Fund is hereby established to enhance the development and greater utilization of renewable energy. The RETF shall be exclusively used to:
(a) Finance the research, development, demonstration, and promotion of the widespread and productive use of RE systems for power and non-power applications, as well as to provide funding for R & D institutions engaged in renewable energy studies undertaken jointly through public-private sector partnership, including provision for scholarship and fellowship for energy studies;
(b) Support the development and operation of new RE resources to improve their competitiveness in the market: Provided, That the grant thereof shall be done through a competitive and transparent manner
The law dictates that the Renewable Portfolio Standard, Feed-In Tariff, Net-metering, and off-grid development mechanisms were all supposed to take effect within one year from the effectivity of the Renewable Energy Act.
And yet, Arances notes that the feed-in tariffs were not implemented until 2013, the Green Energy Option Program and Renewable Portfolio Standard were only launched this year. The off-grid development and Renewable Energy Trust fund have yet to be promulgated.
“So from 2009 to 2013, [it] took them four to five years before the first mechanism was implemented. Pwedeng sabihin ng iba kasi bagong technology, pinag-aralan, etc. Unfortunately noong time na iyon it was also the time wherein most of the coal plants the communities and stakeholders were fighting against were approved at that time. So permits were given left and right,” Arances laments.
Last year, CEED filed a case against the Department of Energy, alleging that the DOE was remiss in its duties. “Marami kaming allegations na nag-dilly-dally siya, nagpatumpik-tumpik siya while at the same time handing out permits [for coal plants] within the same period,” Arances explains. “The Court of Appeals decided that the DOE was indeed remiss.”
“Since we’ve filed the case, halos lahat ng mechanisms ay nag-full blast,” he adds. “They just released the Green Energy Option mechanism. 'Yung off-grid ay hindi pa nila ginagawa pero in the process na din. But we’re doing dialogues with DOE. Ang napansin natin is since we filed the case, bumilis lahat. That’s the sad story.”