PHILIPPINE RENEWABLE

ENERGY SITUATIONER

Renewables

Corporation

Accelerate the development of the country’s renewable energy resources by providing fiscal and non-fiscal incentives to private sector investors and equipment

manufacturers / suppliers.

RA No. 9513: Renewable Energy Act of 2008

• A policy which places an obligation on the electric power industry participants such as generators, distribution, utilities, or suppliers to source or produce a specified fraction of their electricity from eligible RE resources.

• Purpose: To contribute to the growth of the renewable energy industry by diversifying energy supply and to help environmental concerns of the country by reducing greenhouse emissions.

Renewable Portfolio Standards (RPS)

4

Feed-in-Tariff (FIT)

• The REM will be a sub-market of the WESM where the trading of RE certificates may be made.

Renewable Energy Market (REM)

• A mechanism to be established by Philippine Department of Energy which shall provide end-users the option to choose RE Resources as their source of energy.

Green Energy Option (GEO)

RE Fiscal IncentivesIncentive RE Developer RE

Commercialization7-year Income Tax Holiday Yes Yes

Duty-free Importation Yes Yes

VAT-free importation No Yes

Special Realty Tax Rate Yes Yes

Net Operating Loss Carryover Yes Yes

10% Corporate Tax Rate Yes

Accelerated Depreciation Yes Yes

Zero Percent VAT on RE Sales and Purchases Yes Yes

Cash Incentive (50% of UC for Missionary Electrification

Yes

Tax Exemption on Carbon Credits Yes

Tax Credit on Domestic Capital Equipment & Services Yes Yes

Power Generation MixPhilippines vs. ASEAN Member States

ASEAN-6 Power Generation Mix, as of 2013

Source: DOE, EGAT, Ministry of Energy and Mineral Resources (Indonesia), Economic Planning Unit (EPU-Malaysia) ERAV and EMA* Include Import

Other RE

PH vs ASIAN COUNTRIESCountry RE Component (%)

Philippines 26Thailand 12

Indonesia 12Malaysia 11Vietnam 47

Singapore4

***Philippines has the 2nd (26%) highest RE component among the neighboring countries next to Thailand.**Vietnam has the highest (47%) Hydro component into their Total Power Generation mix.

Coal11.3%

Oil Based37.9%

Geothermal 5.3%

Hydro45.0%

Solar0.0%

Biomass0.5%

Dependable Capacity = 15,878 MWRE Share = 31.33%

Dependable Capacity = 11,868 MW

RE Share = 25.3%

Source: DOE List of Existing Power Plant, June 2015

Coal38.0%

Oil Based13.4%

Natural Gas

23.2%

Geo-thermal

5.8%

Hydro18.1%

Wind0.9%

Biomass0.2%

Solar0.3%

Dependable Capacity = 2,150 MW

RE Share = 47.7%

Dependable Capacity = 1,860 MW

RE Share = 50.8%

2015 Dependable Capacity MixLUZON VISAYAS MINDANAO

Coal29.3%

Oil Based22.9%

Geothermal 38.0%

Hydro0.5%

Biomass3.3%

Natural Gas0.0%

Solar1.9%

Wind4.0%

Total Generation = 28,033 GWhRE Share = 13.5%

Source: submitted Monthly Operations Report NGCP Daily Operations Report

Total Generation = 5,336 GWhRE Share = 55.1%

Total Generation = 4,837 GWhRE Share = 51.4%

Total Generation = 38,206 GWhRE Share = 24.1%

LUZON VISAYAS MINDANAO

Coal16.9%

Oil-based31.8%

Geothermal8.8%

Hydro42.2%

Biomass0.3%

Solar0.0%

Power Generation MixJanuary to June 2015

Coal51.9%

Oil-based2.2%

Natural Gas

32.5%

Geo-thermal

7.3% Hydro5.2%

Wind0.7%

Biomass0.2%

Solar0.1%

Coal38.9%

Oil-based6.0%

Geo-thermal52.5%

Hydro0.3%

Wind1.2%

Biomass0.7%

Solar0.4%

20012005

20092013

20172021

20252029

20332037

20412045

20490

20,000

40,000

60,000

80,000

100,000

120,000

140,000

Business- As-Usual

Other TechREGeothermalHydroCoalNGOil

20012005

20092013

20172021

20252029

20332037

20412045

20490

20,000

40,000

60,000

80,000

100,000

120,000

140,000

Clean Energy Scenario

Other TechREGeothermalHydroCoalNGOil

Projected Energy Mix

DOE plans to have a balanced mix of energy sources: (30% RE, 30% NatGas, 30% Coal, 10% Others)

Power and Renewable Energy• Must Dispatch and Priority Dispatch of Renewable

Energy Resources in the WESM• Mandating All DUs to Undergo Competitive Selection

Process (CSP) in Securing Power Supply Agreements (PSA)

• Full Implementation of Retail Competition and Open Access (RCOA)

• Maintaining the Share of RE Resources in the Country's Installed Capacity at 30%

• Further Enhancement of the WESM Design and Operations

• Commercial Operation of the Central Scheduling and Dispatch of Energy and Contracted Reserves in the WESM

• Adoption of WESM Offer Price Cap (PHP 32) and Floor Cap

Major Policies Issued

Department of Energy

PNOC RCPNOC Renewables Corporation

PNOC ECPNOC Exploration Corporation

VISIONPNOC Renewables Corp will be a catalyst & prime mover for Philippine Renewable energy development by 2030.

Renewables

Corporation

PNOC RENEWABLES CORPORATIONPROJECTS

MINOR INVESTOR IN THE 20 MW MAIBARARA

GEOTHERMAL PROJECT

1MW Rizal Hydro Power Plant

100 kW PNOC RC & Philippine Heart

Center Inauguration

100 kW PNOC RC & DOST-PCIERD

100 kW UP DILIMAN CAMPUS

100 kW DENR-EMB

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We Target to have 20 Government Agencies signed up next year…

PNOC RENEWABLES CORPORATION

Pipeline ofPROJECTS

27

• GEOTHERMAL– Investment in a 20MW Geothermal Project

• SOLAR– Development of 22 Solar Rooftop Projects– Development of 6 Solar Farm Projects totalling

25MW

• ESCO– Development of 15 LED Retrofitting

Projects

28

• BIOMASS– Investment in a 2MW Waste-to-Energy Project– Development of 3 Biomass Projects totaling

3MW

• WIND– Development of three small-scale wind projects

totaling 300kW

• HYDRO– Development of 6 mini hydropower projects

totaling 16 MW– 630 kW Munoz

29

WE CAN DEVELOP PROJECTS FROM PRE-DEVELOPMENT TO COMMERCIALITY

PRE-DEVELOPMENT STAGE DEVELOPMENT STAGE

Commercial Operation

• Award of contract area

Service

Contract

• Studies• Secure Permits• Sales

Agreement

Pre-Dev

Stage

• Financial Closure

• Detailed Design• Construction

Dev Stage

Requirements of RE Service Contract Pre-Development

Stage to Development/Commercial

Stage

1. Letter of Application For RESC or Conversion from Pre-development Stage to Development Stage

2. For Explored Projects prior to RA 9513, same Requirements under Pre-development Stage

3. Declaration of Commerciality based on Identified Market

4. Detailed Feasibility Study and Engineering Design

Requirements of RE Service Contract Pre-Development Stage to Development/Commercial Stage

5. Permits, Clearances, Certificates, Agreements• Environmental Compliance Certificate or Certificate

of Non-Coverage• Free and Prior Informed Consent, Pre-condition

and/or Non-overlap• Special Land Use Permit / Forest Lease Agreement,

Proof of Ownership / Lease Agreement• Water Rights Permit (Hydropower)• Rights of Way• LGU Endorsements• Other applicable regulatory requirements

PARTNERSHIPS WITH THE PRIVATE SECTOR

• As a bidder for projects posted in PhilGEPS– Following RA 9184 (Government

Procurement Reform Act)

• As a Joint Venture Partner – Following 2013 NEDA Joint

Venture Guidelines

• Through a Public-Private Partnership (PPP)– Following RA7718 (Revised BOT

Law)– With the assistance of the PPP

Center

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WHAT ARE THE REQUIREMENTS?Foreign partners:

Register the company in the Philippines

Letter of Intent to either partner with PNOC RC or engage PNOC RC for its services

Proof of Legal, Technical and Financial Capabilities

Renewables

Corporation

34

PNOC RC’s SMART Village InitiativesPartnership with National

Power Corporation (also a GOCC) responsible for operation and improvement of electricity supply for Small Power Utilities Group (SPUG) areas

Continued linkaging and providing technical support with LGUs on RE resource assessment

Renewables Corporation

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PNOC RC’s SMART Village InitiativesImplemented the

Barangay Electrification Program (BEP) in 92 off-grid barangays nationwide in 2009 Social preparation,

supply, delivery, installation of solar home systems, conduct after sales assessment

Renewables Corporation

THANK YOU and get in touch:

Email: info@pnoc-rc.com.ph

Website: http://www.pnoc-rc.com.ph/

Phone: +63 (02) 840 – 3080Renewabl

es Corporatio

n