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PHILIPPINE POLICY ON
OCEAN ENERGY RESOURCE
DEVELOPMENT IN THE
PHILIPPINESRoundtable Discussion on Ocean Energy
June 08, 2016
Mario C. Marasigan
Director IV
Renewable Energy Management Bureau
Department of Energy
1. Challenges and Barriers in Developing
Renewable Energy Resources
2. Policy on Ocean Energy Resource
Development - Renewable Energy Act of 2008
3. Ocean Energy Potential Sites
4. List of Existing/Terminated/Relinquished Ocean
Energy Service Contract
5. National Renewable Energy Program (NREP)
6. Challenges and Way Forward
CONTENTS
• High upfront and technology costs
• Non-competitiveness
• Non-viable markets
• Inaccessible Financial Packages
• Socio-environmental Issues
• Peace and Order Issues
• Concerned Government Agencies Policies
Challenges and Barriers in Developing
Renewable Energy Resources
Landmark Law
To address the barriers and challenges in
developing renewable energy resources , the
Government promulgated landmark Law to
accelerate development of renewable energy
resources
Republic Act No. 9513
Renewable Energy Act of 2008
R.A. 9513
Renewable Energy Act of 2008
Accelerate the development of the country’srenewable energy resources by providing fiscaland non-fiscal incentives to private sectorinvestors and equipment manufacturers /suppliers.
2. Republic Act 9513Renewable Energy Act of 2008
Wind
Solar
Biomass
Geothermal
Hydro
Ocean
RE Developers (New & Existing)RE Suppliers, Fabricators,
Manufacturers
7 year Income Tax Holiday (ITH) 7 year Income Tax Holiday (ITH)
10 year Duty-free Importation of RE
Machinery, Equipment and Materials
10 year Tax and Duty-free Importation of
Components, Parts and Materials
1.5% Special Realty Tax Rates on Equipment
and Machinery
7 year Net Operating Loss Carry-Over
10 % Corporate Tax Rate after ITH
Accelerated Depreciation
Zero Percent Value-Added Tax Rate Zero-rated value added tax transactions
Tax Exemption of Carbon Credits
100% Tax Credit on Domestic Capital
Equipment and Services
100% Tax Credit on Domestic Capital
Components, Parts and Materials
Hybrid and Cogeneration Systems
INCENTIVES FOR ELIGIBLE
RENEWABLE ENERGY PROJECTS
8
Existing and Updates on RE Policy
Mechanisms
Feed-in-Tariff (FIT)
• Priority connection to the grid
• Priority purchase and transmission of and
payment for by grid system operators
• Fixed tariff for 20 years
• To be applied for generation utilized in
compliance with RPS
• DOE issued List of guidelines for the Selection
Process of Renewable Energy Projects Under
Feed-In Tariff System and the Award of Certificate
for Feed-In Tariff Eligibility
9
Existing and Updates on RE Policy
MechanismsFeed-in-Tariff (FIT) issued Regulations
• The FIT Rules was promulgated on August 12, 2010.
• The ERC approved the FIT Rates on July 27, 2012.
• ERC issued FIT Allowance (FIT-ALL) Payment and Collection
Guidelines
• Approved FIT-ALL Rates 0.0406 PHP/kWh (2014-2015), Oct.
7, 2014 and effective January 2015
• Amendment of DOE’s installation target
• The DOE issued a Certification to amend installation targets of
Solar Energy Generation (50mw to 500mw) on April 30, 2014 and
Wind Energy Generation (200mw to 400mw) on April 24, 2015
• ERC issued new FIT Rates for Solar (0.1293$/Kwh, Resolution
No. 6, series of 2015)) and Wind (0.164$/Kwh, Resolution No.
14, series of 2015)
FEED-IN TARIFF (FIT) RATES
1,210 MW* Amended solar energy installation target from 50 MW
to 500 MW.
** Under review by the Energy Regulatory Commission,
in reference to its Resolution No. 10, Series of 2012
approving the FIT Rates.
RE Technology FIT Rate
(PhP/kWh)
Degression Rate Installation
Target (MW)
Wind8.53
0.5% after 2 years from effectivity
of FIT
200
Biomass6.63
0.5% after 2 years from effectivity
of FIT
250
Solar9.68**
6% after 1 year from effectivity of
FIT
500*
Run-of-River
Hydropower5.90
0.5% after 2 years from effectivity
of FIT
250
Ocean Deferred 10
• Selection of Feed-in-Tariff (FIT) Eligible RE Projects
– The DOE issued Department Circular No. 2013-05-009 dated
May 28, 2013, entitled the “Guidelines for the Selection
Process of Renewable Energy Projects Under Feed-in Tariff
(FIT) System and the Award of Certificate for FIT Eligibility”
which took effect in June 2013
• FIT Allowance - FIT-ALL Payment and Collection Guidelines
–The ERC Approved the Guidelines on December 2013
• The DOE transmitted an amendments of its Certification on
Installation Target from 50 MW to 500 MW for Solar Energy
Generation under the Feed-In Tariff (FIT) System last May 26,
2014 to ERC .
UPDATES ON RE POLICY
MECHANISMS
Net-Metering Rules and Interconnection Standards
• Connection / sale of customers’ RE generation to the grid
• The ERC approved the Net Metering Rules last May 27,
2013
• Conducting nationwide IEC for LGUs, DUs, consumers
Renewable Portfolio Standards (RPS)
• Mandated minimum percentage of RE generation
• For final public consultation
Green Energy Option Program
• End-users’ option to purchase electricity from RE facilities (open
access)
• For Department of Energy’s finalization
UPDATES ON RE POLICY MECHANISMS
Potential Ocean Thermal (Energy-Conversion) Sites
3. PREVIOUSLY IDENTIFIED OCEAN
ENERGY POTENTIAL SITES
Item No.Ocean Energy
Service Contract No.Date Signed Type of Contract Project Name
Capacity
(MW)Location Developer
1.0 2010-10-003 2/2/2010Pre-Development
Contract Cabangan Ocean Energy 5.00 Cabangan, Zambales Bell Pirie Power Corporation
2.0 2013-09-004 10/30/2013Pre-Development
Contract
San Bernardino Strait
Between Bicol Peninsula and
Samar Leyte Corridor (2
sites) - Area 1OP (Tidal In-
Stream Energy Conversion
TISEC Project)
5.00
southeast side of
Municipality of Matnog,
Sorsogon
H&WB Corporation
3.0 2013-09-005 10/30/2013Pre-Development
Contract
San Bernardino Strait
Between Bicol Peninsula and
Samar Leyte Corridor (2
sites) - Area 2OP
5.00
East side of Municipality of
Capul, Northern Samar
and on the west side of
Municipality of San
Antonio, Northern Samar
H&WB Corporation
4.0 2013-09-006 10/30/2013Pre-Development
Contract San Bernardino Strait
Between Bicol Peninsula and
Samar Leyte Corridor (2
sites) - Area 3OP
5.00
East side of Municipality of
San Antonio, Northern
Samar and on the west
side of Municipalities of
San Isidro and Victoria,
Northern Samar
H&WB Corporation
5.0 2014-12-008 12/29/2014Pre-Development
ContractGaboc Channel Ocean
Energy Project6.00 Surigao del Norte
Adnama Power Resources
Corporation
6.0 2015-02-009 2/24/2015Pre-Development
ContractTISEC-Project Site (Areas
4&5)tbd
San Bernardino Strait and
Northern Samar
Poseidon Renewable Energy
Corporation
7.0 2015-02-010 2/24/2015Pre-Development
Contract
TISEC-Project Site (Area 6)
tbd
Capul Pass, Dalupiri
Island, San Antonio,
Northern Samar
Poseidon Renewable Energy
Corporation
List of Existing Ocean Energy Service Contract4.
Item No.
Ocean Energy
Service Contract
No.
Date Signed Type of Contract Project Name Capacity (MW) Location Developer Status
1.0 2009-10-001 10/23/2009Pre-Development
Contractto be determined Anini-y, Antique
Deep Ocean Power Philippines,
Incterminated
2.0 2009-10-002 10/23/2009Pre-Development
Contractto be determined
Sablayan, Occidental
Mindoro
Deep Ocean Power Philippines,
Incterminated
7.0 2013-09-007 10/30/2013Pre-Development
Contract
Sta. Ana & Adjoining
Towns in Cagayan
Valley
5.00 Cagayan H&WB Corporation relinquished
List of Terminated/Relinquished Ocean Energy Service Contract
19
Renewable Energy Targets, 2011-2030
Note: RE Targets under review of NREB to reflect developments on RE sector and the DOE’s issuances of new
Installation targets
6. Current Status/DOE Program
(Ocean Energy)
• Seven (7) Existing Ocean Energy Service Contracts
• On-going Ocean Energy Potential Site Inventory with
establishment of Ocean Energy Database
• Procured Tide Gauge, Current Temp. Depth (CTD)
Measuring Equipment, Single Beam Echosounder (for
resource inventory)
• Capacity Building on Ocean Energy Basic Principles
and Potential Site Identification’
• Proposed Wave and Current Demonstration Projects
21
Challenges
• Lack of Comprehensive Data
• Technical Expertise/Technology in Ocean Energy
Development
• High Upfront Cost/Investment Extensive
• Awareness and Social acceptance
• Streamlining of Administrative Process
• Full implementation of Policy Mechanisms under the
RE Law
• Socio-environmental Issues
• Peace and Order Issues
• Concerned Government Agencies Policies
7.
22
Full implementation of the Renewable Energy Act
Finalization / Approval of Guidelines on other RE Policy
Mechanisms (Renewable Portfolio Standard (RPS), Green
Energy Option, etc.)
Establish Energy Investment Coordinating Center and
Linkages with other Government Regulatory Agencies
Finalization of Ocean Energy Potential Site Inventory and
Establishment of Ocean Energy Database
Capacity Building / Information, Education and
Communication Campaigns
More Investment Missions / Business Meetings
The Way Forward