FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
1 
Introduced by Senator Richard J. Gordon 
EXPLANATORY NOTE 
Energy that powers our country's transportation, heat and light, and manufacture of 
all kinds of products mostly comes from fossil fuels, such as petroleum, coal, and natural 
gas, a large part of which is sourced from imported oil. These are nonrenewable sources of 
energy, meaning that once these natural resources are used up, they are gone forever. In 
addition, the process of gathering these sources of energy can be harmful to the 
environment. Fossil fuels are put through a process called combustion in order to produce 
energy that releases pollution, such as carbon monoxide and sulfur dioxide, which 
contributes to acid rain and global warming. 
Pollution problems and shrinking resources mean alternative sources of energy will 
have to be found that will provide us a sustainable energy supply with due regard to health 
and the environment. Renewable energy resources that can be used over and over again 
include solar energy, wind, geothermal energy, biomass and hydropower. They generate 
much less pollution -both in gathering and production -than nonrenewable sources. 
This bill, which is largely based on the extensive work by the Senate Committee on 
Energy in the 13th Congress, seeks to institute a national renewable energy policy and 
program through promoting the use of renewable energy systems, providing incentives for 
renewable energy projects, and creating a trust fund for renewable energy research and 
development. 
c_, 
Senator 
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FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
1 
First Regular Session 
) 
Introduced by Senator Richard J. Gordon 
AN ACT PROMOTING AND ENHANCING THE EXPLORATION, DEVELOPMENT, 
UTILIZATION, AND COMMERCIALIZATION OF RENEWABLE ENERGY RESOURCES 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
CHAPTER I 
TITLE AND DECLARATION OF POLICIES 
SECTION 1. Short Title. -This Act shall be known as the "Renewable Energy Act of 
2007." 
Sec. 2. Declaration of Policy. - It is the policy of the State to: 
(a) 
promote the development of renewable energy resources to further reduce 
the country's reliance on generation systems powered by imported fuels to 
minimize exposure of the economy to price fluctuations in the international 
markets, the effects of which spiral down to almost all sectors of the 
economy; 
increase the utilization of renewable energy by institutionalizing its use, 
including the development of national and local capabilities in the use of 
renewable energy systems, by providing fiscal and non-fiscal incentives; and 
establish the necessary infrastructure and mechanism to carry out the 
mandates specified in this Act and other related laws. 
(b) 
(c) 
Sec. 3. Scope. - This Act shall establish the framework for the advancement and 
accelerated development of renewable energy resources, including the grant of fiscal and 
non-fiscal incentives to all renewable energy activities, and the program to increase its 
utilization. 
Sec. 4. Definition of Terms. -As used in this Act, 


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Biomass Energy Systems shall refer to energy systems which use biomass 
resources to produce heat, steam, mechanical power or electricity through 
either thermochemical, biochemical or physico-chemical processes; 
Biomass Resources shall refer to natural or processed plants and plant 
materials, trees, crop residues, wood and bark residues, and animal manure 
or any organic or biodegradable matter that can be used in Biomass Energy 
Systems; 
BO1 shall refer to the Board of Investments attached to the Department of 
Trade and Industry; 
Co-generation Systems shall refer to facilities which produce electrical, 
mechanical, or thermal energy such as heat or steam used for industrial or 
commercial heating or cooling purposes through the sequential use of energy; 
DOE shall refer to the Department of Energy: 
DENR shall refer Department of Environment and Natural Resources; 
DOf shall refer to the Department of Finance; 
DOSTshall refer to the Department of Science and Technology; 
DTI shall refer to the Department of Trade and Industry; 
Distributed Generation shall refer to a system of small generation units, not 
exceeding 100 kilowatts each, supplying directly to the distribution grid; 
Distribution of Electricity shall refer to the conveyance of electric power by a 
distribution utility through its distribution system; 
Distribution Utility shall refer to any electric cooperative, private corporation, 
government-owned utility or existing local government unit which has an 
exclusive franchise to operate a distribution system; 
ERC shall refer to the Energy Regulatory Commission: 
Generation Company shall refer to an entity authorized by the ERC to operate 
facilities used in the generation of electricity; 
Generation Facility shall refer to a facility for the production of electricity or 
thermal energy such as but not limited to steam, hot or cold water; 
Geothermal Energy shall refer to all geothermal fluids, whether existing 
naturally or formed by the artificial introduction of fluids into naturally hot 
formations or heat energy in the earth, or any of their by-products: 


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Geothermal Energy Systems shall refer to machines or other equipment that 
can convert geothermal energy into useful power; 
Geothermal Resources shall refer to renewable energy mineral resources in 
the form of (i) all products of geothermal processes, such as indigenous 
steam, hot water and hot brines; (ii) steam and other gases, hot water and hot 
brines resulting from water, gas, or other fluids artificially introduced into 
geothermal formations; (iii) heat or associated energy found in geothermal 
formations; and (iv) any by-product; 
Government Share shall refer to the amountls due to the national government 
and local government units for the exploitation, development, and utilization of 
naturally-occurring renewable energy resources: 
Green Energy Option shall refer to the mechanism to empower end-users to 
choose renewable energy in meeting their energy requirements; 
Grid shall refer to the high voltage backbone system of interconnected 
transmission lines, substations and related facilities, located each in Luzon, 
Visayas, and Mindanao, or as may otherwise be determined by the ERC; 
Hybrid Systems shall refer to any power or energy generation facility which 
makes use of two or more types of technologies utilizing both conventional or 
renewable fuel sources, such as but not limited to integrated windldiesel 
systems, integrated solarlwind systems, biomasslfossil fuel systems, 
hydrolfossil fuel systems, integrated solarlbiomass systems, integrated 
windlfossil fuel systems, with a minimum of 10 megawatts or 10% of the 
annual energy output provided by the renewable energy system components 
of the hybrid systems, whichever is lower; 
Hydroelectric Power Systems shall refer to water-based energy systems 
which produce electricity by utilizing the kinetic energy of falling or running 
water to turn a turbine generator; 
Hydroelectric Power Development shall refer to the construction and 
installation of a hydroelectric power-generating plant and its auxiliary facilities, 
such as diversion structure, headrace, penstock, substation, transmission, 
and machine shop, among others; 
Hydroelectric Power Resources shall refer to water resources found 
technically feasible for development of hydroelectric power systems which 


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(hh) 
(ii) 
include rivers, lakes, waterfalls, irrigation canals, springs, ponds and other 
bodies of water; 
Micro-scale Project shall refer to a renewable energy systems project with a 
capacity not exceeding 100 kilowatts; 
Mini-Grid Systems shall refer to electrical systems composed of 
interconnected transmission lines, distribution lines, substations and related 
facilities for the purpose of conveyance of power that is not bulk power on the 
grid; 
Missionary Electrification shall refer to the provision of basic electricity service 
in areas which are unviable to make them viable; 
NPC shall refer to the National Power Corporation; 
TRANSCO shall refer to the National Transmission Corporation; 
NREB shall refer to the National Renewal Energy Board created under this 
Act; 
Net Mefering shall refer to a system appropriate for distributed generation in 
which a distribution grid user has a two-way connection to the grid and is only 
charged for his net electricity consumption and credited for any overall 
contribution to the electricity grid. 
Ocean Energy Systems shall refer to energy systems which convert ocean or 
tidal current, ocean thermal gradient or wave energy into electrical or 
mechanical energy; 
Off-Grid Systems shall refer to electrical systems not connected to the wires 
and related facilities of any mini-grid system or on-grid system; 
On-Grid Systems shall refer to electrical systems composed of interconnected 
transmission lines, distribution lines, substations and related facilities for the 
purpose of conveyance of bulk power on the grid; 
PEMC shall refer to the Philippine Electricity Market Corporation; 
REM shall refer to the Renewable Energy Market or the market created under 
this Act where trading is made of renewable energy certificates or certificates 
of power generated from renewable energy resources; 
Renewable Energy Systems Developers shall refer to any person, whether 
natural or juridical, engaged in the exploration, development, utilization, and 


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commercialization of renewable energy resources, as well as operation of 
renewable energy systems and facilities; 
(mm) Renewable Energy Policy Framework shall refer to the policy implementation 
of this Act which provides goals and targets, among others, for the 
exploration, development, utilization, and commercialization of renewable 
energy; 
Renewable Energy Portfolio Standards shall refer to a market-based policy 
that requires electricity suppliers to source an agreed portion of their energy 
supply from eligible renewable energy resources; 
Renewable Energy Service Contract shall refer to the service agreement 
between the government and the renewable energy systems developer over 
a period in which the renewable energy systems developer has the exclusive 
right to a particular area for exploration, development, utilization, and 
commercialization of renewable energy resources. This contract shall be 
divided into two stages: (i) the pre-development stage and (ii) the 
development stage. The preliminary assessment and feasibility study up to 
the financial closing shall refer to the pre-development stage. 
The 
construction and installation of facilities up to the operation phase shall refer 
to the development stage; 
Renewable Energy Resources shall refer to energy resources that are 
renewable on a regular basis whose renewal rate is relatively rapid and 
available over an indefinite period of time. These include biomass, solar, 
wind, geothermal, ocean energy, and run-of-river hydropower conforming with 
internationally-accepted norms and standards on dams, and other emerging 
energy technologies, among others; 
Renewable Energy Systems shall refer to energy systems which convert 
renewable energy resources into useful energy forms like electrical, 
mechanical, etc.; 
Rural Electrification shall refer to the delivery of basic electricity services, 
consisting of power generation, sub-transmission, andlor extension of 
associated power delivery system that would bring about important social and 
economic benefits to the countryside; 
(nn) 
(00) 
(pp) 
(qq) 
(rr) 


Solar Energy shall refer to energy derived from solar radiation that can be 
converted into useful thermal or electrical energy; 
Solar Energy Systems shall refer to energy systems which convert solar 
energy into thermal or electrical energy; 
Small Power Utilities Group shall refer to the functional unit of the NPC 
mandated to pursue missionary electrification; 
Transmission of Electricity shall refer to the conveyance of electricity through 
the high voltage backbone system; 
Wind Energy shall refer to energy derived from wind that can be converted 
into useful electrical or mechanical energy; and 
Wind Energy Systems shall refer to energy systems which convert wind 
energy into useful electrical or mechanical energy. 
CHAPTER II 
ON-GRID RENEWABLE ENERGY DEVELOPMENT 
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Sec. 5. Renewable Portfolio Standards. - All stakeholders in the electric power 
industry shall contribute to the growth of renewable energy. 
To provide impetus, a 
Renewable Portfolio Standards is hereby imposed on all suppliers of electricity. Towards 
this end, the DOE shall, upon the recommendation of the NREB, formulate and promulgate 
the Renewable Portfolio Standards on a per grid basis within three (3) years upon the 
effectivity of this Act, which shall include but not be limited to the following: 
(a) 
types of eligible renewable energy resources and identification and 
certification of generating facilities using these resources; 
yearly minimum renewable portfolio standards requirements; 
annual minimum incremental percentage of electricity sold by each electricity 
supplier required to be sourced from eligible renewable energy resources 
which shall not be less than 1% per year over the next 10 years; and 
means of compliance by mandated electricity suppliers of the minimum 
percentage set by the government to meet the Renewable Portfolio 
Standards requirements, including direct generation from eligible renewable 
energy resources, contracting for energy sourced from eligible renewable 
energy facilities, or trading in the REM. 
(b) 
(c) 
(d) 


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Within three (3) years from the effectivity of this Act, the DOE shall, jointly with 
electric power industry, likewise develop and implement a preparedness program to inform, 
educate and prepare all stakeholders in the industry. 
The ERC shall enforce the implementation of the Renewable Portfolio Standards 
Rules by undertaking necessary activities such as certifying generating facilities using 
eligible renewable energy resources, prescribing reportorial obligations related to 
Renewable Portfolio Standards compliance and administration of penalties for non- 
compliance or violation of Renewable Portfolio Standards Rules, among others. Further, 
the ERC shall be responsible for the handling of complaints that may arise between and 
among parties from any transactions related to Renewable Portfolio Standards compliance 
by electricity suppliers. 
The Renewable Portfolio Standards may be complied with by directly generating 
from renewable energy sources, or contracting for renewable energy sourced from 
renewable energy systems or facilities, or trading for renewable energy in the REM. 
Sec. 6. Renewable Energy Market (REM). - The DOE shall establish the REM and 
shall direct PEMC to implement changes to the Wholesale Electricity Spot Market under 
Republic Act No. 9136 to allow the operation of the REM. 
The PEMC shall, under the supervision of the DOE, establish a renewable energy 
registrar that shall issue, keep, and verify renewable energy certificates corresponding to 
energy generated from eligible renewable energy resources. Such certificates can be used 
for compliance with the Renewable Portfolio Standards. For this purpose, a transaction fee, 
agreed upon by the industry participants, may be imposed by the PEMC. 
Sec. 7 .  Green Energy Option. - The DOE shall establish a Green Energy Option 
program, which shall provide end-users the option to choose renewable energy resources, 
In consultation with the NREB, the DOE shall promulgate the appropriate implementing 
rules and regulations, which are necessary, incidental or convenient to achieve this 
program. 
Upon the determination by the DOE of its technical viability, end-users with a 
monthly average of at least 100 kilowatts may directly contract for energy based on 
renewable energy. 
Consistent herewith, the TRANSCO, the distribution utilities, the PEMC and all 
relevant parties are hereby mandated to provide the mechanisms for the physical 


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connection and commercial arrangements necessary to ensure the success of the Green 
Energy Option. 
Sec. 8. Net-Metering for Renewable Energy, - 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 distribution grid users up to a 
distributed generation market share of one percent of peak distribution grid demand. 
The ERC, in consultation with the electric power industry, shall establish net 
metering interconnection standards and pricing methodology within six months from the 
effectivity of this Act. 
The distribution utility shall be entitled to a renewable energy certificate resulting 
from renewable energy distributed generation for sale or use in the Renewably Portfolio 
Standards. 
The DOE, the ERC, the TRANSCO, the distribution utilities, the PEMC, and all 
relevant parties are hereby mandated to provide the proper mechanisms for the physical 
connection and commercial arrangements necessary to ensure the success of the net- 
metering for renewable energy program. 
Sec. 9. Transmission and Distribution System Development. - The TRANSCO or its 
buyerlconcessionaire and all distribution utilities shall include the required connection 
facilities for renewable energy-based power facilities in transmission and distribution 
development plans, provided that such facilities shall be economically-viable as may be 
determined by the TRANSCO and the distribution utilities, and approved by the DOE. The 
connection facilities of renewable energy power plants, including the extension of 
transmission and distribution lines, shall not be subject to deep-connection charging policies 
in rate-making. 
CHAPTER 111 
OFF-GRID RENEWABLE ENERGY DEVELOPMENT 
Sec. 10. Off-Grid Areas. - Within two years from the effectivity of this Act, small 
power utilities group or entities deemed technically and financially capable to serve or take 
over the small power utilities group in certain areas, andlor qualified third parties in off-grid 
areas in providing missionary electrification shall source a minimum percentage of the total 
annual generation from available renewable energy resources in the area concerned upon 
recommendation of the NREB and as determined by the DOE. 


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Eligible renewable energy generation in missionary areas shall be eligible for 
renewable energy certificates. 
CHAPTER IV 
GOVERNMENT SHARE 
Sec. 11. Government Share. - To promote the exploration and development of 
renewable energy resources, the government share, including the local government share 
which shall have priority over the national government share, on renewable energy 
development projects shall not exceed two percent (2%) of the gross proceeds. 
The gross proceeds of renewable energy micro-scale projects for communal 
purposes and non-commercial operations not greater than 100 kilowatts shall be exempt 
from any government share. 
CHAPTER V 
ENVIRONMENTAL COMPLIANCE 
Sec. 12. Compliance with Environmental Regulations. - All renewable energy 
explorations, development, utilization, and renewable energy systems operations shall be 
conducted in accordance with existing environmental regulations as prescribed by the 
DENR andlor any other concerned government agency. 
CHAPTER VI 
GENERAL INCENTIVES 
Sec. 13. Incentives for Renewable Energy Projects and Activities. - 
In 
coordination with the BO1 and as duly certified by the DOE, renewable energy systems and 
facilities developers, including hybrid systems, for both power and non-power applications, 
shall be entitled to the following incentives in proportion to their renewable energy 
components: 
(a) 
Value-Added Tax, Duty-free Importation and Subsequent Sale of 
Renewable Energy Machinery, Equipment, and Materials. - Within the 
first 10 years of a renewable energy service contract, importation of 
machinery and equipment, and materials and parts thereof, including its 
control and communication equipment, shall not be subject to tariff duties and 
value-added tax: Provided, however, that the said machinery, equipment, and 
materials and parts are: 
(i) 
not manufactured domestically nor locally available in reasonable quantity 
and quality; 


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(ii) 
directly and actually needed and used exclusively in the renewable energy 
facilities for transformation into energy, and transmission of electric energy 
to the point of use; and 
covered by shipping documents in the name of the duly registered 
operator to whom the shipment will be directly delivered by customs 
authorities: 
(iii) 
Provided further, that approval by the DOE is obtained before the importation 
of such machinery, equipment, and materials and parts are made. 
The DOE approval must be secured before any sale, transfer or disposition of 
the imported capital equipment, machinery or spare parts is made: Provided, 
however, That if such sale, transfer or disposition is made within the first five 
years from the date of importation, any of the following conditions must be 
present: 
(i) 
if made to another renewable energy developer enjoying tax and duty 
exemption on imported capital equipment; 
if made to another renewable energy developer, upon payment of any 
taxes and duties due on the net book value of the capital equipment to be 
sold; 
exportation of the capital equipment, machinery, spare parts or source 
document or those required for renewable energy development; and 
for reasons of proven technical obsolescence. 
(ii) 
(iii) 
(iv) 
When the aforementioned sale, transfer or disposition is made under any of 
the conditions provided for in the foregoing paragraphs other than paragraph 
(ii), the renewable energy developer shall not pay the taxes and duties 
exempted on such items: Provided further, That if the renewable energy 
developer sells, transfers or disposes the aforementioned imported items 
without prior approval within five years from the date of importation, the 
renewable energy developer and the vendee, transferee, or assignee shall be 
solidarity liable to pay twice the amount of tax and duty exemption given it: 
Provided, finally, That even if the sale, transfer or disposition of the capital 
equipment, machinery or spare parts is approved after five years from the 
date of importation, the renewable energy developer is still liable to pay the 
taxes and duties based on the net book value of the capital equipment, 


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machinery or spare parts if it has violated any of its registration terms and 
conditions. Otherwise, it shall no longer be subject to the payment of the 
taxes and duties waived thereon. 
Tax Credit on Domestic Capital Equipment and Services. - A tax credit 
equivalent to 100% of the value of the value-added tax and customs duties 
that would have been paid on the renewable energy machinery, equipment, 
materials and parts had these items been imported shall be given to a 
renewable energy service contract holder who purchases machinery, 
equipment, materials and parts from a domestic manufacturer for purposes 
set forth in this Act: froviu'eu', That prior approval by the DOE was obtained 
by the local manufacturer; Provided further, That the acquisition of such 
machinery, equipment, materials, and parts shall be made within the validity 
of the renewable energy service contract. 
Special Realty Tax Rates on Equipment and Machinery. - Any law to the 
contrary notwithstanding, realty and other taxes on civil works, equipment, 
machinery, and other improvements of a registered renewable energy 
developer actually and exclusively used for renewable energy systems and 
facilities shall not exceed two and one-half percent (2.5%) of their original 
cost. 
lncome Tax Holiday and Exemption. - For the first six years of its 
commercial operations, the renewable service contract holder shall be 
exempt from income tax: Provided, That the renewable energy developer 
complies with any of the following: 
(i) 
(ii) 
use of high technology, 
(iii) 
large capital investment or sizeable employment generation, 
located in less developed areas as determined by the NREB. 
Additional investments in the project shall also be entitled to income tax 
holiday equivalent to such investments and may be entitled to additional 
income tax holiday for as long as investment is made in the same project 
upon approval by the DOE: Provided, That the entitlement period for 
additional investments shall not exceed three times the period of the initial 
availment of the income tax holiday. 


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(e) 
Net Operating Loss Carryover (NOLCO). - The NOLCO of the renewable 
energy developer during the first three years from the start of commercial 
operations which had not been previously offset as a deduction from gross 
income shall be carried over as a deduction from gross income for the next 
five consecutive taxable years immediately following the year of such loss: 
Provided, however, That operating loss resulting from the availment of 
incentives provided for in this Act shall not be entitled to NOLCO. Renewable 
energy developers availing of the income tax holiday shall not be entitled to 
avail of the NOLCO. A renewable energy developer availing of the income 
tax holiday or NOLCO shall secure a certificate of eligibility from the DOE 
before filing its Income Tax Return with the Bureau of Internal Revenue. 
Accelerated Depreciation. - If a renewable energy project does not get an 
income tax holiday before full operations, it may apply for accelerated 
depreciation in its tax books and be taxed based on such; Provided, That if it 
applies for accelerated depreciation, the project or its expansion shall no 
longer be eligible for income tax holiday. Accelerated depreciation of plant, 
machinery, and equipment that are reasonably needed and actually used for 
the exploration, development, and utilization of renewable energy resources 
may be depreciated using a rate not exceeding twice the rate which would 
have been used under the National Internal Revenue Code (NIRC) of 1997, 
as amended. 
Exemption from the Universal Charge. - Power and electricity generated 
through renewable energy systems for the generator's own consumption 
and/or for free distribution in off-grid areas shall be exempted from the 
payment of the Universal Charge under Sec. 34 of Republic Act No. 9136. 
(f) 
(9) 
Sec. 14. Hybrid and Cogenerafion Systems. - The tax exemptions and/or 
incentives under this Act may be availed of by renewable energy service contract holders of 
hybrid and cogeneration systems utilizing both renewable energy resources and 
conventional energy: Provided, however, That the tax exemptions and incentives shall apply 
only to the equipment, machinery andlor devices utilizing renewable energy resources. 
Sec. 15. lntermittent Renewable Energy Resources. - Subject to limitations 
imposed by the need to ensure reliability and safety of the grid and taking into account any 
economic impact, qualified renewable energy generating units with intermittent renewable 


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energy resources or renewable energy generating units connected to a common connection 
point whose energy resource is location-specific with a natural variability which renders the 
output unpredictable and the availability of the resource inherently uncontrollable, such as 
plants utilizing wind or ocean energy, shall enjoy the benefit of priority dispatch in 
accordance with the Wholesale Electricity Spot Market. 
Sec. 16. lncentives for Renewable Energy Commercialization. - All 
manufacturers, fabricators and suppliers of locally-produced renewable energy equipment 
and components duly recognized and accredited by the DOE, in consultation with other 
relevant government agencies, shall be entitled to the following privileges: 
(a) 
Tax and Duty-free lmportation of Components, Parts and Maferials. - All 
shipments necessary for the manufacture andlor fabrication of renewable 
energy equipment and components shall be exempt from importation tariff 
and duties and value-added tax: Provided, however, That the said 
components, parts and materials are: 
(i) 
not manufactured domestically in reasonable quantity and quality at 
competitive prices; 
directly and actually needed and shall be used exclusively in the 
manufacturelfabrication of renewable energy equipment; and 
covered by shipping documents in the name of the duly registered 
manufacturerlfabricator to whom the shipment will be directly delivered by 
customs authorities: 
(ii) 
(iii) 
Provided further, That prior approval of the DOE was obtained before the 
importation of such components, parts and materials. 
Tax Credit on Domestic Capital Components, Parts and Materials. - A 
tax credit equivalent to 100% of the amount of the value-added tax and 
custom duties that would have been paid on the components, parts and 
materials had these items been imported shall be given to a renewable 
energy equipment manufacturer, fabricator and supplier duly recognized and 
accredited by the DOE who purchases renewable energy components, parts 
and materials from a domestic manufacturer: Provided, That such 
components, and parts are directly needed and shall be used exclusively by 
the renewable energy manufacturer, fabricator and supplier for the 
manufacture, fabrication and sale of the renewable energy equipment. 
(b) 


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Provided further, That prior approval by the DOE was obtained by the local 
manufacturer. 
lncome Tax Holiday and Exemption. - For the first six years of its 
operations, a renewable energy manufacturer, fabricator and supplier of 
renewable energy equipment shall be exempt from income tax. 
(c) 
Sec. 17. Period of Grant of Fiscal Incentives. - The fiscal incentives granted 
under this Act shall apply only for 20 years from the effectivity of this Act. 
CHAPTER VI1 
GENERAL PROVISIONS 
Sec. 18. Creation of the National Renewable Energy Board (NREB). - The NREB 
is hereby created composed of the Secretary of the DOE or his designated Undersecretary 
as Chairman, and the Secretaries of the DTI, DOF, and DENR or their designated 
Undersecretaries or Assistant Secretaries; the Presidents of the NPC, TRANSCO, and 
PEMC or their duly designated representatives; and one (1) representative each from the 
following sectors: renewable energy developers, government financial institutions, and 
renewable energy non-governmental organizations, duly endorsed by their respective 
associations and appointed by the President of the Republic of the Philippines, as 
Members. 
The NREB Chairman shall convene the NREB within one (1) month from the 
effectivity of this Act. 
The NREB shall be assisted by a Technical Secretariat from the DOE Energy 
Utilization Management Bureau through the Renewable Energy Management Division and 
shall directly report to the NREB Chairman. 
The number of staff of the Technical 
Secretariat and the creation of corresponding positions necessary to complement and/or 
augment the existing plantilla shall be determined by the NREB subject to existing civil 
service rules and regulations, and approval by the Department of Budget and Management. 
The NREB shall have the following powers and functions: 
(a) 
evaluate and recommend to the DOE the mandated Renewable Portfolio 
Standards and minimum renewable energy generation capacities in off-grid 
areas, as it deems appropriate; 
recommend specific actions to facilitate the implementation of the renewable 
energy policy framework and program; 
(b) 


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(c) 
monitor and review the implementation of the renewable energy policy 
framework and program, including compliance with the Renewable Portfolio 
Standards and minimum renewable energy generation capacities in off-grid 
areas; 
oversee and monitor the utilization of the Renewable Energy Trust Fund 
created under this Act; and 
perform such other functions, as may be necessary, to attain the objectives of 
this Act. 
(d) 
(e) 
Sec. 19. Renewable Energy Trust Fund. - A Renewable Energy Trust Fund is 
hereby established to enhance the development and greater utilization of renewable energy. 
It shall be administered by the DOE as a special account in a government financial 
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(a) 
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(b) 
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(c) 
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(e) 
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The Renewable Energy Trust Fund shall be exclusively used to: 
finance the research, development, demonstration and promotion of the 
widespread and productive use of renewable energy systems for power and 
non-power applications; 
support the development and operation of new renewable energy resources to 
improve their competitiveness in the market: Provided, That the grant thereof 
shall be done through a competitive and transparent manner; 
conduct nationwide resource and market assessment studies for the power and 
non-power applications of renewable energy systems; 
propagate renewable energy knowledge by accrediting, tapping, training, and 
providing benefits to institutions, entities and organizations which can extend the 
promotion and dissemination of renewable energy benefits to the national and 
local levels; and 
fund such other activities necessary or incidental to the attainment of the 
objectives of this Act. 
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Use of the fund may be through grants, loans, equity investments, loan guarantees, 
insurance, counterpart fund or such other financial arrangements necessary for the 
attainment of the objectives of this Act: Provided, that the use or allocation thereof shall be 
done through a competitive and transparent manner. 
The Renewable Energy Trust Fund shall be funded from: 
(aa) 
proceeds from the emission fees collected from all generating facilities under 
the Philippine Clean Air Act; 


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(bb) 
one and one-half percent (1.5%) of the net annual income of the Philippine 
Charity Sweepstakes Office; 
one and one-half percent (1.5%) of the net annual income of the Philippine 
Amusement and Gaming Corporation; 
one and one-half percent (1.5%) of the net annual dividends remitted to the 
government by the Philippine National Oil Company and its subsidiaries; 
(cc) 
(dd) 
(ee) 
contributions, grants and donations; 
(ff) 
one and one-half percent (1.5%) of the proceeds of the government share 
collected from the development and use of indigenous non-renewable energy 
resources; 
any revenue generated from the utilization of the Renewable Energy Trust 
Fund; and 
(hh) 
proceeds from the fines and penalties under this Act. 
All contributions, grants and donations made to the Renewable Energy Trust Fund 
(gg) 
shall be tax deductible. 
Sec. 20. Financial Assistance Program. - Government financial institutions shall, 
in accordance with and to the extent allowed by their respective charters or applicable laws, 
provide preferential packages for the development, utilization, and commercialization of 
renewable energy projects. 
Sec. 21. Adoption of Waste-to-Energy Technologies. - The DOE shall, where 
practicable, encourage the adoption of waste-to-energy facilities or systems which convert 
biodegradable materials such as, but not limited to, animal manure and agricultural waste 
into useful energy through chemical processes such as anaerobic digestion, fermentation 
and gasification, among others. The DOE shall, in coordination with existing private 
companies and suppliers, facilitate the provision of technical assistance in the adoption of 
waste-to-energ y technologies. 
CHAPTER Vlll 
FINAL PROVISIONS 
Sec. 22. lmplementing Rules and Regulations. - Within six months from the 
effectivity of this Act, the DOE shall, in consultation with the other relevant government 
agencies and stakeholders, issue the implementing rules and regulations of this Act. 
Sec. 23. Prohibited Acts. -The following acts shall be prohibited: 
a) non-compliance or violation of the Renewable Portfolio Standards; 


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b) willful refusal to undertake net-metering arrangements with qualified 
distribution grid users; 
c) falsification or tampering of public documents or official records to avail of the 
incentives under this Act; and 
d) non-compliance with the implementing rules and regulations of this Act. 
Sec. 24. Penal Clause. - Any person, who willfully aids or abets the commission of 
any of the prohibited acts in this Act or who causes the commission of any such act by 
another shall be liable in the same manner as the principal. 
In case of a corporation, partnership, or association, the penalty shall be imposed on 
the directors, officers, or partners responsible for the violation. 
The commission of any of the prohibited acts in this Act shall be punished with 
imprisonment from one (1) year to five (5) years, or a fine ranging from a minimum of One 
Hundred Thousand Pesos (PlOO,OOO.OO) to One Hundred Million Pesos (PlOO,OOO,OOO), or 
both upon the discretion of the court. This is without prejudice to the penalties provided for 
under existing laws, rules and regulations. 
The DOE may impose administrative fines and penalties according to this section for 
any violation of the provisions of this Act, its implementing rules and regulations, and other 
issuances relative to this Act. 
Sec. 25. Official Development Assistance (ODA). - Renewable energy systems 
Sec. 26. Repealing Clause. - All laws, decrees, orders, rules and regulations or 
other issuances or parts thereof inconsistent with the provisions of this Act are hereby 
repealed or modified accordingly. 
Sec. 27. Appropriafioion. - The initial funding to carry out this Act shall be charged 
against the current year's appropriation. Thereafter, such sums as may be necessary shall 
be included in the annual General Appropriations Act. 
Sec. 28. Separability Clause. - If any portion or provision of this Act is declared 
unconstitutional, the remainder of this Act or any provision not affected thereby shall remain 
in force and effect. 
developers shall be eligible to apply for foreign loans and grants. 
Sec. 29. Effectivity. - This Act shall take effect after fifteen (15) days following the 
completion of its publication either in the Official Gazette or in a newspaper of general 
circulation in the Philippines. 
Approved,