THIRTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
S E N A T E  
S. 6. NO. 
* 2023 
5 
KAY 23 p6 
Introduced by SENATOR EDCARDO J. ANCARA 
EXPLANATORY NOTE 
Philippines, which is situated on the periphery of the Asia-Pacific belt and 
which boasts a successful track record of exploiting local abundant geothermal 
energy, exhibits 
a vast, well-mapped potential for New and Renewable Energy 
(NRE) resources. These indigenous NRE which include, among others, biomass, 
solar, wind, geothermal; hydropower and ocean energy, and other emerging energy 
sources are considered as both clean sources of energy and a viable alternative to 
providing electricity to off-grid barangays. 
To date, the Philippines is already a major user of NREs. In fact, NREs as an 
alternative to conventional / fossil-fuel based energy source, represent the country's 
single energy source contributing around 28% of the total energy requirements. But 
since we still depend greatly on imported energy and fuel products (constituting 
72% of our energy demands) and there are about 10,000 unelectrified barangays in 
the country, there exist a pervading need for the government to intensify efforts to 
tap indigenous energy sources to cope up with the increasing energy requirements. 
Specifically, the country's wind energy potential is over 70,000 MW, 
PACASA showing the national average mean wind power density of about 30.8 
watts per square meter (W/m2); using solar panels, we can generate 169 watts/m2 for 
our solar energy applications, with an average solar radiation based on sunshine 
duration of 161.7 W/mZ with a range of 128-203 W/mz; the aggregate micro-hydro 
power potential is about 27.8 M W  located in various areas of the country; our 
ocean energy resource area is 1,000 kms' which is attributed mainly on the 
Philippines's archipelagic nature, with an estimated potential capacity of about 265 
million MW; and biomass potential will save us over 80 million barrels of fuel oil 
equivalent in the next four (4) years. 
Thus said, the contribution of the utilization of NRE as an alternative 
indigenous energy resource to the country's energy requirements cannot be 
overemphasized. 
This Bill seeks to strengthen and institutionalize current efforts to implement 
and develop decentralized, area-based and integrated energy program for the 
promotion, production, commercialization and utilization of renewable energy 
systems by providing benefits and incentives to entities and stakeholders engaged in 
the manufacture, distribution and use of these NREs. 
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These proposed reforms in our power sector is envisioned as a responSe to 
the perennial problems in the industry, with electricity tariffs that are among the 
highest in Asia, to speed up the extension of service coverage to all barangays by 
2010 as well as the connection of all potential consumers by 2018, bringing 
electricity to all of 10.17 million potential consumers by 2025, and ultimately, 
achieving the Philippine vision of a sustainable energy system with renewables 
taking a lead in the process. 
Indeed, it is high time that we pass this bill. 
Senator 
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THIRTEENTH CONGRESS OF THE 
) 
First Regular Session 
) 
REPUBLIC OF THE PHILIPPINES 
) 
5 FlR 2.3 06 :I 4 
2023 
S. 6. NO. 
Introduced by SENATOR EDGARDO I. ANGARA 
AN ACT STRENGTHENING THE PHILIPPINE ENERGY PLAN 
FOR THE EXPLORATION, DEVELOPMENT, AND UTILIZATION 
OF NEW AND RENEWABLE ENERGY SYSTEMS USING INDIGENOUS 
RESOURCES AND FOR OTHER PURPOSES. 
Be it enacted by the Senate and the House of Representatives of the 
Philippines in Congress assembled: 
Chapter I 
TITLE AND DECLARATION OF POLICY 
Section 1. Short Title. This Act shall be known as the "Renewable Energy 
Resources Act of 2005. " 
Section 2. Declaration of Policies. It is hereby declared the policy of the 
State to: 
a) 
Advance the goals of energy self-sufficiency, energy affordability, rural 
electrification, energy security in the country's energy requirements both in 
electric power and fuel; 
b) 
Reduce reliance on generation systems powered by imported fuels to 
minimize the effects of price fluctuations in the international market to the 
economy; 
c) 
Promote and encourage the use of renewable energy sources by 
institutionalizing its use, including the development of national and local 
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Promote and encourage the use of renewable energy sources by 
institutionalizing its use, including the development of national and local 
capabilities in the use of renewable energy systems, and providing fiscal 
and non-fiscal benefits thereto; 
Promote and prioritize the utilization of renewable energy resources for 
non-power application; 
Adopt full cost accounting principles in the generation of electricity to 
rationalize the cost inherent in power generation and consequently, 
reduce harmful emissions generated therefrom; AND 
Establish the necessary infrastructure to carry out the mandate set herein 
and other laws. 
Towards this end, the State shall promote the exploration, development, and 
utilization of new and renewable energy systems (NRES) by: 
a) Setting up mechanisms to develop local capabilities in the development 
and use of indigenous renewable energy sources; 
b) Generating a conductive business environment to encourage investments 
and allow easier participation of the private sector in the development of 
renewable energy resources; 
c) Promoting the development and use of indigenous renewable energy 
resources in consonance with environmental protection; 
d) Developing opportunities for all stakeholders to participate in the 
planning and implementation of renewable energy projects and priorities; 
AND 
e) Promoting greater private sector investment and allow easier participation 
in the implementation of renewable energy projects and activities. 
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Section 3. Scope. This Act shall establish the framework for the 
rationalization of all the cost related to the generation of electricity, the grant of 
fiscal and non-fiscal incentives to Renewable Energy components, projects and 
operations and the program to increase its utilization. 
Section. 4. Definition of Terms. For purposes of this Act: 
a) “Affihted Renewable Energy Centers (ARK)” shall refer to institutions 
established by the DOE to provide extension and technical services at the 
national and local levels in the promotion and dissemination of renewable 
energy technologies. Specifically, it refers to any university, college, non- 
government organization or private volunteer organization certified by the 
DOE upon its compliance with the technical and legal requirements that 
shall be imposed by DOE; 
b) ”Alternative Fuels / Alternative Fuel Systems“ refer to use of materials, 
machinery and / or equipment to generate power using non-petroleum fuels. 
The machinery and / or equipment may be modified from its original 
condition or an original equipment manufacturer (OEM) that allow the usage 
of alternative fuel or that further produce, handle, store, and / or utilize 
alternative fuels: 
c) “Biomass Energy Systems” shall refer to energy systems that use biomass 
resources generated by extensive agriculture, livestock, and forestry 
industries to produce heat, steam, mechanical power, electricity, fuels and 
fuel 
additives, 
either 
through 
thermochemical, 
biochemical, 
or 
physiochemical processes; 
d) “Biofuels” shall refer to liquid fuels and blending components produced 
from biomass feedstocks, such as: ethanol from corn, cassava, sugarcane and 
biodiesel from coconut and vegetable oil, used primarily for land, air and 
water transportation and other energy-using equipment designed for various 
purposes such as substitute or addictive to fossil-petroleum fuels; 
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e) “Biogas” shall refer to the gas produced from the anaerobic decomposition 
or organic materials; 
0 “Biomass Resources” shall refer to natural or processed plants and plant 
materials, trees, crop residues, wood and bark residues, animal manure, and 
municipal solid waste or any organic that can be used in bioconversion 
process; 
“Cooperating Research lnstitutions (CRI)” shall refer to institutions doing 
research and development activities in collaboration with the DOE for the 
advancement of New and Renewable Energy Systems (NRES); 
“Conventional Energy Systems” shall refer to energy systems that use 
commercially-traded fuels such as petroleum products, coal and electricity 
produced from such fuels, including large-scale hydro and geothermal power 
plants; 
“Department of Environment and Natural Resources (DENRY’ refers to the 
government agency created pursuant to Executive Order No. 192; 
“Department of Finance (Don’’ refers to the government agency created 
pursuant to Executive Order NO. 127, as amended; 
“Department of Science and Technology (DOST)” refers to the government 
agency created pursuant to Executive Order No. 128; 
“Distribution of Electricity” refers to the conveyance of electric power by a 
Distribution Utility through its distribution system pursuant to the provisions 
of Republic Act No. 9136 and its implementing rules and regulations; 
m) “Distribution Utility” refers to any electric cooperative, private corporation, 
government-owned utility or existing local government unit which has an 
exclusive franchise to operate a distribution system in accordance with its 
franchise and Republic Act No. 9136; 
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p) “Geothermal Energy” refers to all geothermal fluids whether existing 
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naturally or formed by the artificial introduction of fluids into naturally hot 
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formation, heat energy in the earth, and any by-product derived from them; 
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r) “Geothermal Resources” shall refer to either i) all products of geothermal 
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processes, embracing indigenous steam, hot water and hot brines; ii)) steam 
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and other gases, hot water and hot brines resulting from water, gas, or other 
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fluids artificially introduced into geothermal formations; 
iii) heat or 
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associated energy found in geothermal formations; and iv) any by-product 
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derived from them; 
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t) “Grid” refers to the high voltage backbone system of interconnected 
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transmission lines, substations and related facilities, located in each of 
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Luzon, Visayas, and Mindanao, or as may otherwise be determined by the 
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ERC in accordance with the implementing rules and regulations of Republic 
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Act No. 91 36; 
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n) “Energy Regulatory Commission ERC)” refers to the independent regulatory 
agency created pursuant to Republic Act No. 9136; 
0) “Generation Facility” refers to a facility for the production of electricity and / 
or thermal energy such as steam, hot or cold water; 
q) “Geothermal Energy Systems’’ refer to machines or other equipment that 
converts geothermal energy into useful power; 
s) ”Government Share” refers to the amount due the National Government and 
Local Government Units from the exploitation, development and utilization 
of natural ly-occurring renewable energy; 
u) “Hybrid Systems” shall refer to any power or energy generation facility 
which makes use of two or more types of technologies utilizing both 
conventional and / or renewable fuel sources, such as but not limited to 
integrated wind /diesel systems, integrated solar / wind systems, biomass / 
fossil fuel systems, hydro / fossil fuel systems, integrated solar / biomass 
systems, integrated wind / fossil fuel systems, with a minimum of ten 
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megawatts or ten percent (10%) of the annual energy output provided by the 
RES components of the hybrid systems, whichever is lower; 
v) “Hydroelectric Power Systems or Hydropower 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; 
w) “Hydroelectric Power Development or Hydropower 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; 
x )  “Hydroelectric Power Resources or Hydropower Resources” shal I refer to 
resources found technically feasible for development of hydropower projects 
which include rivers, lakes, waterfalls, irrigation canals, springs, ponds and 
other water bodies; 
y) “Large or 
Conventional Hydroeletric Power 
Plants 
or 
Large 
or 
Conventional Hydro Plants“ refer to electric power-generating plants which 
i) utilize the kinetic energy of falling or running water (run-of-river or 
impounding hydropower plants) to turn a turbine generator producing 
electricity; and ii) have installed capacities of more than 10,000 kilowatts 
(kWs); 
z) “Micro-Hydro Power Systems” shall refer to small hydro-based energy 
systems which utilize water turbines with an installed capacity of less than 
100 kilowatts (100 KWs) as may be determined by the DOE, to convert the 
energy from running or falling water into mechanical or electrical power; 
aa) “Mini-Grid Systems” refer to electrical systems composed of power 
generating plant, distribution lines, substations and related facilities that are 
installed at isolated locations and are not connected to the Grid; 
bb) “Mini-hydroelectric Power Plants or Mini-hydro Plants“ refer to electric 
power-generating plants which i) utilize the kinetic energy of falling or 
running water (run-of-river hydropower plant) to turn a turbine generator 
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producing electricity; and ii) have installed capacities of more than 100 
kilowatts but not more than 10,000 kilowatts; 
cc) “Missionary Electrification” refers to the provision of basic electricity service 
in unviable areas with the aim of bringing the operations in these areas to 
viability levels; 
dd) “National Power Corporation (NPC)” refers to the government corporation 
created under Republic Act No. 6395, as amended; 
ee) “National Transmission Corporation (TRANSCOY’ refers to the corporation 
created pursuant to Republic Act No. 9136 which is responsible for the 
planning, construction, and centralized operation and maintenance of high 
voltage transmission facilities, including grid interconnection and ancillary 
services; 
ff) ”New and Renewable Energy Systems (NRES)” shall refer to indigenous, 
small-scale, decentralized and modular energy systems which include 
production and use of renewable energy resources to produce heat, steam, 
mechanical power, electricity, fuels or fuel additives, excluding large-scale 
hydro and geothermal power plants; 
gg) “Ocean Energy Systems” shall refer to energy systems that either convert 
ocean current to electrical energy, otherwise known as ’wave and tidal 
power systems’ or convert thermal gradient from the ocean surface to the 
bottom into electrical energy, otherwise known as “Ocean Thermal Energy 
Conversion (OTEC) systems;” 
hh) “OH-Grid Systems” refer to electrical systems not connected to the wires and 
related facilities of the Grid; 
ii) “On-Grid Systems” 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; 
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jj) “Oxygenate Gasoline” shall refer to gasoline formulated with added 
substance such as menthanol, ethanol and ethyl tertiary butyl ether (ETBE) to 
increase the oxygen content and octane rating and make the fuel burn more 
cleanly, thereby reducing toxic tailpipe pollution, particularly carbon 
monoxide; 
kk) “Power Development Program (PDP)” shall refer to the indicative plan for 
managing electricity demand through energy-efficient programs and for the 
upgrading, expansion, rehabilitation, repair and maintenance of power 
generation and transmission facilities, formulated and updated annually by 
the Department in coordination with the generation, transmission and 
distribution utility companies; 
II) “Renewable Energy Developers or RE Developers” refer to an individual or a 
group of individuals formed in accordance with existing Philippine Laws 
engaged in the exploration, development and utilization of renewable energy 
resources and actual operation of renewable energy systems /facilities; 
mm) 
“Renewable Energy Resources“ shall refer to indigenous resources, 
with a rapid renewable rate, and which do not have an upper limit on the 
total quantity to be used. These resources are renewed on a regular basis and 
shall include, among others, biomass, solar, wind, geothermal, hydropower 
and ocean energy, and other emerging energy sources using new 
technologies such as fuel cells and hydrogen cells; 
nn) “Renewable Energy Service (Operating) Contract or RE Contract” refers to 
the service agreement between the Government, thru the Department of 
Energy, and RE Developer over a period in which the RE Developer has the 
exclusive right to a particular RE area for exploration and development. The 
RE Contract shall be divided into two (2) stages: the pre-development stage 
and the development / commercial stage. The preliminary assessment and 
feasibility study up to financial costing shall refer to the pre-development 
stage. The construction and installation of facilities up to operation phase 
shall refer to the development stage; 
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00) “Renewable Energy Systems (RESY refer to energy which convert renewable 
energy resources into useful energy forms, like electrical, mechanical, etc.; 
pp)“Republic Act No. 9136 or Electric Power Industry Reform Act of 2001 
(EPIRA Law)” refers to the law mandating the restructuring of the electric 
power sector and the privatization of NPC; 
qq)”Rural Electrification” refers to the delivery of basic electricity services, 
consisting of power generation, sub-transmission, and /or extension of 
associated power delivery system that would bring about important social 
and economic benefits of the countryside; 
rr) “Small Power Utilities Croup (SPUC)” refers to the functional unit of the 
National Power Corporation mandated under Republic Act No. 9136 to 
pursue missionary electrification function; 
ss) “Solar Energy”shal1 refer to the radiant energy of the sun; 
tt) “Solar Energy Systems” shall refer to energy systems which directly tap and 
convert solar energy, either through solar thermal applications or through 
photovoltaic cells, into electricity; 
uu) “Transmission of Electricity” refers to the conveyance of electricity through 
the high voltage backbone system; 
vv) “Waste-to-Energy Technologies” shall refer to systems which convert 
biodegradable materials such as animal manure, agricultural waste, etc., into 
useful energy through chemical processes such as anaerobic digestion, 
fermentation and gasification, among others; 
ww) 
“Wind Energy”shal1 refer to the kinetic energy of the wind converted 
into electrical or mechanical energy; AND 
xx)“Wind Energy Systems” shall refer to energy systems which use wind 
turbines to tap wind energy and convert it to mechanical power as in 
windmill or electrical power in wind turbine systems; 
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Chapter II 
ORGANIZATIONAL MANDATE 
Section. 5 .  Lead Agency and Its Powers and Functions. In addition to its 
existing mandate under Republic Act 7638, as amended by Republic Act 9136 
(EPIRA Law), the Department of Energy (DOE) shall have the following powers and 
functions under this Act: 
a) Formulate, maintain and regularly update an integrated and comprehensive 
Philippine Renewable Energy Program (PREP) aimed at stepping up the 
exploration, development and utilization of renewable energy systems 
towards a self-sufficient, self-reliant energy requirements for the country; 
b) Provide all the necessary and appropriate support services in the 
implementation of the PREP, including the facilitation of entry of foreign 
expertise and resources; 
c) Establish a mechanism for the integration, rationalization and coordination of 
the various activities, projects and programs on renewable energy of all 
government agencies and instrumentalities; 
d) Develop and implement specific policies, mechanisms and procedures 
encouraging the participation of the private sector including Independent 
Power Producers (IPPs), private individuals, non-governmental organizations 
(NGOs), private volunteer organizations, and other interested parties; 
e) Expedite the processing, certification and approval of applications for RES 
projects through the establishment of relevant model operating contracts, 
standards, procedures, terms and conditions; 
f) Formulate, maintain and regularly update an information system of 
renewable energy technologies and establishments with renewable energy 
systems, within six (6) months from the effectivity of this Act; 
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g) Impose such reasonable fees and charges in connection with the filing, 
processing, evaluation and approval of applications for New and Renewable 
Energy Systems’ Projects; 
h) Require the RE Developer to post a bond or guarantee of sufficient amount in 
favor of the Government and with surety or sureties satisfactory to the DOE 
upon the faithful performance by the RE Developer of any or all of the 
obligations under and pursuant to the RE operating contract within sixty (60) 
days after effective date of the contract; 
i) Within six (6) months from the approval of this Act, promulgate in 
consultation with all stakeholders, including government agencies, such as 
the National Water Resources Board (NWRB), Department of Natural 
Resources-Environmental 
Management 
Bureau 
(DENR-EMB), 
Energy 
Regulatory Commission (ERC), Department of Finance (DOF), Department of 
Trade and Industry (DTI), among others, such rules and regulations as may be 
necessary to implement the objectives and provisions of this Act; AND 
j) 
Exercise such powers and functions as are necessary or incidental to achieve 
the purposes of this Act. 
Section 6. Institutionalization of Affiliated Renewable Energy Centers (ARECS). 
- There shall be established ARECs to serve as a support to the extension and 
technical services of the DOE in the field implementation of renewable energy 
projects pursuant to the objectives of this Act. An AREC can be a recipient of 
donations or grants from the DOE and other donor agencies to develop and 
strengthen their capabilities to effectively perform their responsibilities under the 
Renewable Energy Policy Framework. The Affiliated Non-conventional Energy 
Centers (ANECs) shall be known as ARECs upon evaluation and accreditation of the 
DOE. 
Chapter 111 
ON-GRID RENEWABLE DEVELOPMENT 
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Section 7. On-Grid Renewable Energy Generation. - The DOE shall 
develop and implement a Renewable Portfolio Standard (RPS) that shall be imposed 
on all non-RE generators of electricity and shall mandate all grid-users, particularly 
the distribution utilities and electricity suppliers, a percentage utilization of 
electricity from eligible RES and targets fifty percent (50%) RES capacity of the total 
generation on the Grid. The timetable and scheme of implementation for this target 
shall be stipulated in the REPF and the Philippine Energy Plan. 
Section 8. Full Cost Accounting. The DOE shall spearhead a multi-agency 
effort that shall determine the full cost involved in the generation of electricity. It 
shall then make all generators account for all the environmental, economic, health 
and other detrimental cost associated with or resulting from the production of 
electricity. 
The DOE shall develop and implement a program of collecting fees from all 
generating plants and such fees shall be used to support the development and 
operation of clean and renewable sources of energy. Said fees shall be based on the 
level of emissions and their detrimental effects and shall accrue to the Renewable 
Energy Trust Fund established herein. 
Section 9. Renewable Energy Market (REM). - To facilitate compliance with 
the provisions of this Act, the Department shall, in consultation with the Wholesale 
Electricity Spot Market (WESM), establish a Renewable Energy Market and 
promulgate the Rules for the same. 
The Department, through the WESM shall also establish or appoint a 
Renewable Energy Registrar that shall issue, keep and verify Renewable Energy 
Certificates corresponding to energy generated from eligible Renewable Energy 
sources. Said certificates may be used for compliance with the RPS. 
Section IO. lnfermittent Renewable Energy Generation. - Specific for power 
generating facilities using intermittent RE sources such as wind and solar among 
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others, the DOE, in coordination with TRANSCO and other industry participants, 
shall facilitate the interconnection of these facilities to the main Grid and shall 
formulate production predictability incentive schemes (capacity forecast premium). 
Section 11. Green Energy Option. A Green Energy Option program which 
provides end-users the option to choose renewable energy sources, shall be made 
available to all end-users. Towards this end, the DOE shall establish the necessary 
support and facilities and the modification of the Implementing Rules and 
Regulations (IRRs), WESM Rule or any other rule or regulation to implement the 
right to choose Renewable Energy. 
End-users with a monthly average peak demand of at least one hundred 
kilowatts (100 kWs) for the preceding twelve months, may also directly contract for 
RE-based energy upon the promulgation of the IRRs thereof by the DOE; Provided, 
That the availing parties shall have at least one hundred kilowatts (100 kWs) as the 
RE Contract demands or source at least fifty-one percent (51 %) of its requirements 
from RES, whichever is higher. 
In line herewith, the Distribution Utilities, TRANSCO, WESM and all other 
parties involved in bringing about the success of the Green Energy Option cited 
above or any other variant promulgated by the DOE shall ensure and provide the 
workings for the physical connection and commercial arrangements required. 
Section 12. Net Metering Agreements. A distribution utility shall, subject to 
technical considerations, enter into net-metering agreements with qualified 
distribution grid users at the user's request, up to a distributed generation market 
share of one percent (1%) of peak distribution grid demand. TO qualify, a 
distribution grid user must generate their own power from renewable sources which 
shall be less than one hundred kilowatts, and shall meet any regulation set forth by 
the DOE. 
The distribution utility will charge qualified users for no more than their net 
energy consumption at the standard retail rate. Likewise, it is obliged to credit net 
contributors at the prevailing bulk generation rate. Thereupon, the distribution 
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utility will be entitled to any renewable energy production certificate resulting from 
RE distributed generation for sale or use in the RPS. 
The DOE shall promulgate the qualification requirements within one (1) year 
after the passage of this Act. 
In line herewith, the Distribution Utilities, TRANSCO, WESM, and all other 
parties involved in bringing about the success of the Net Metering cited above or 
any other variant promulgated by the DOE shall ensure and provide the workings 
for the physical connection and commercial arrangements required. 
Chapter IV 
OFF-GRID RENEWABLE ENERGY MARKET 
Section 13. Off-grid Renewable Energy Development Program. - The 
utilization of renewable energy resources in power generation in energizing off-grid 
barangays and households shall be prioritized; Provided, However, that the same 
will promote social economic returns in said concerned areas. Consistent with the 
provisions of Section 70 of the Republic Act No. 9136 and the Rules and 
Regulations 
promulgated 
therefore, 
the 
DOE, 
NPC-SPUG 
and 
National 
Electrification Administration , through the Rural Electric Cooperatives established 
in accordance to Law, shall prioritize the type of renewable energy technologies 
and systems on a least-cost basis. The DOE shall endeavor to devise schemes for the 
standardization of renewable energy equipment for efficient utilization. 
Chapter V 
OTHER RENEWABLE ENERGY MARKETS 
Section 14. Promotion of Non-Power Renewable Energy Systems. - The 
DOE shall develop specific support programs for business entities, marketers and 
distributors of, among others, solar water heaters, windpumps, biomass-fired 
thermal systems and other non-power renewable energy equipment such as 
engines, machines and/or equipment capable of using alternative fuels or 
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fossil/alternative fuel blends as energy source. DOE shall ensure that these entities 
can also avail of the incentives provided for renewable energy markets and activities 
as specified under Section 24 of this Act. 
Section 15. 
Renewable Energy and Ecofourism. - The DOT, in 
collaboration with the DOE, shall develop technical and financing support programs 
for ecotourism projects using renewable energy systems and establish accreditation 
system for the use of environment-friendly renewable energy resources in facilities 
located or to be constructed in tourists spots, such as beaches, spas, resort areas, 
cultural centers, etc. The DOT and DOE shall prepare a priority list of ecotourism 
projects with renewable energy component to promote viable investments in 
remote and rural areas. The BO1 shall incorporate the same in the annual 
preparation of its Investment Priorities Plan. 
Chapter VI 
GOVERNMENT SHARE 
Section 16. Uniform Government Sharing Scheme. - Notwithstanding any 
law to the contrary, all government shares from the proceeds of the exploration, 
development and utilization of RE generation projects shall be rationalized in 
accordance with the following: 
a. The government’s share shall be equal to at least two per centum (2%) of the 
gross revenues of the contractor for the exploration, development and 
utilization of geothermal resources and one and one half per centum (1.5%) 
of the gross revenues for other RE resources; 
b. There shall be a reduction of the government’s share in RE generation 
projects that are not yet commercially viable and are constructed in 
accordance with the DOE’S Renewable Energy Policy Framework; 
c. Sharing scheme between the national and local governments as set forth in 
the Local Government Code shall be duly respected; and 
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d. The DOF shall assist the DOE in the formulation of the rules and regulations 
to implement this provision. 
The DOE shall ensure that in any instance, the production sharing it imposes 
shall not further penalize the RE Developer in terms of financial obligations to the 
Philippine government as compared to other non-RE power producer. 
Chapter VI1 
ENVIRONMENTAL COMPLIANCE 
Section 17. Compliance with Environmental Regulations. - All RE 
exploration, development, utilization, and RES operations shall be conducted in 
accordance with existing environmental regulations as prescribed by the DENR. 
Section 18. Mandatory Restoration Work. - In all cases where the proposed 
hydroelectric power development entails the closure or stoppage of existing water 
outlets, passageways, connections, conduits, apertures or the like from the water 
source, it shall be mandatory for the hydropower operating contract holder to 
restore or reengineer such water outlets, passageways, connections, conduits, 
apertures or the like on its account or expense, and in such manner that existing 
users or appropriators shall not be permanently deprived of their use or 
appropriation. 
In the event that the restoration is deemed not economically and technically 
feasible, the RE Developer shall instead enter into an agreement, under the 
guidance and supervision of the DOE, for the adequate and reasonable 
compensation of existing users. 
In all other cases where the proposed RE development projects shall affect 
the environment in any manner, the RE operating contract holder shall be mandated 
to implement appropriate restoration works in the affected areas to its original 
conditions. 
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Chapter IX 
2 
GENERAL INCENTIVES 
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a. Tax and Duty-Free lmportation of Machinery, Equipment and Materials. - 
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Within the duration of a RE operating contract, importation of machinery and 
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equipment, and materials and parts thereof, whether or not shipped with 
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such machinery and equipment, including control and communication 
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equipment, shall not be subject tariff duties and value-added tax: Provided, 
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However, that the said machinery, equipment, materials and parts are: 1) not 
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manufactured domestically in reasonable quantity and quality; 2) directly 
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and actually needed and shall be used exclusively in the RE facilities for 
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transformation into energy, and transmission of electric energy to the point of 
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use; and 3) covered by shipping documents in the name of the duly 
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registered Operator to whom the shipment will be directly delivered by 
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customs authorities: Provided, further, that prior approval of the DOE is 
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obtained before the importation of such machinery, equipment, materials 
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and parts are made; 
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Section 19. Incentives for Renewable Energy Projects and Activities. - All 
RE Developers, operators, and users of RE facilities including expansion activities, 
for both power and non-power applications, as duly certified by the DOE and in 
consultation with the DOF and DTI, shall be entitled to the following privileges: 
b. Tax Credit on Domestic Capital Equipment. - A tax credit equivalent to one 
hundred percent (100%) of the value of the value-added tax and custom 
duties that would have been paid on the machinery, equipment, materials 
and parts had these items been imported shall be given to a RE operating 
contract holder who purchases machinety, equipment, materials and parts 
from a domestic manufacturer for purposes set forth under the preceding 
paragraph (a) (2); Provided, 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 RE operating contract; 
c. Real Estate Tax Exemption. - Notwithstanding any law to the contrary, all 
lands, including easements, civil works, equipment, machinery, and other 
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improvements of a registered RE developer actually and exclusively used for 
RES facilities shall be exempted from the payment of any real estate tax; 
Provided, That the activities they engage in exhibit high social economic 
returns and necessary to assist reasonable recovery of large investments; 
d. Income Tax Holiday and Exemption. - For the first eight (8) years of its actual 
commercial operation, the RE operating contract holder shall be fully exempt 
from income taxes levied by the National Government; and 
e. RE Production Predictability / Forecast Premium / Bonus. - RE contract 
holder shall be entitled to a share of RE Production Premium/Bonus 
proportionate to the actual power generation from its RE facility as 
determined by the DOE. For this purpose, there is hereby established a 
Production Premium/Bonus Fund and for which one centavo (Php 0.01) for 
every kilowatt-hour sold shall be collected from every generating facilities by 
the TRANSCO and/or system market operator. 
Section 20. Hybrid and Cogeneration Systems. The tax exemptions and/or 
incentives provided for in Section 20 shall be availed of by RE operating contract 
holders of hybrid and cogeneration systems, utilizing both RE sources and 
conventional energy; Provided, However, That tax exemptions and incentives shall 
apply only to the equipment, machinery and/or devices utilizing RE sources. 
Section 21. Intermittent RE Resources. Subject to technical and financial 
feasibility considerations and WESM rules, qualified RE generating units with 
intermittent RE sources shall enjoy priority dispatch status. The DOE shall, in 
consultation with the industry participants promulgate the rules and regulations 
therefore. 
Section 22. Incentives for RE Commercialization. - All manufacturers, 
fabricators and suppliers of locally-produced RE equipment and components duly 
recognized and accredited by the DOE, in consultation with DOST, DOF and DTI, 
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shall be entitled to the following privileges. 
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(a) Tax and Duty-Free lmportation of Components, Parts, and Materials. - All 
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shipments necessary for the manufacture and/or fabrication of RE equipment 
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and components shall be exempted to importation tariff and duties and value 
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added tax; Provided, However, That said components, parts and materials 
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are: i) not manufactured domestically in reasonable quantity and quality at 
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reasonable prices; ii) actually, directly and exclusively used in the 
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manufacture / fabrication of RE equipment; and iii) covered by shipping 
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documents in the name of the duly registered manufacturer / fabricator to 
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whom the shipment will be directly delivered by customs authorities: 
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Provided, Further, that prior approval of the DOE was obtained before the 
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importation of such components, parts and materials were made; 
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(b) Tax Credit on Domestic Capital Components, Parts and Materials.- A tax 
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credit equivalent to one hundred percent (100%) of the value of the value- 
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added tax and custom duties that would have been paid on the components, 
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parts and materials, had these items been imported shall be given to a RE 
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equipment manufacturer, fabricator, and supplier duly recognized and 
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accredited by the DOE, who purchases RE components, parts and materials 
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from a domestic manufacturer: Provided, That such components, materials 
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and parts are directly needed and shall be used exclusively by the RE 
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manufacturer, fabricator and supplier for the manufacture, fabrication and 
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sale of RE equipment; Provided, also, That prior approval by the DOE was 
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obtained by the local manufacturer; 
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(c) local Taxes - All duly recognized and accredited 
RE equipment 
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manufacturer / fabricator shall be exempted from taxes and fees imposed by 
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local government units, such as real estate tax on lands, local business tax, 
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building permits fees, among others; Provided, That the manufacturing / 
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fabricating facilities are in compliance with the established performance 
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standards certified by the DOE; 
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(d) Special Realty Tax Rates on Equipment and Machinery.- Any provision of 
the Real Property Tax Code or any other law to the contrary notwithstanding, 
realty and other taxes on civil works, equipment, machinery, and other 
improvements of a DOE recognized and accredited RE manufacturer, 
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fabricator and supplier of RE equipment shall not one percent (1%) of their 
original cost of such civil works, machinery, equipment, devices and/or other 
components; 
(e) Value-Added Tax Exemption. - Exemption from the ten percent (10%) value- 
added tax on (i) the gross receipts derived from the sale of locally- 
manufactured RE equipment and components; (ii) imported and locally 
purchased machinery, equipment and devices described in items (a) and (b) 
hereof; and (iii) other local Value-Added Tax; 
(f) lncome Tax Holiday and Exemption. - For eight (8) years starting from the 
date of recognition / accreditation, a RE manufacturer, fabricator and supplier 
of RE equipment shall be fully exempt from income taxes levied by the 
national Government. 
Section 23. Period of Grant of Fiscal Incentives. The fiscal incentives 
granted under this Act shall apply only to the first 2,500 mW capacity sources from 
RE upon approval of this Act or shall cease to have force and effect twenty (20) 
years after the approval of this Act, whichever comes first. Thereafter, the tax 
treatment applicable to the parties concerned prior to the passage of this Act shall 
thereafter apply. 
Section 24. Renewable Energy One Stop Shop (REOSS). There is hereby 
created a Renewable Energy One Stop Shop (REOSS) under the administration and 
direct supervision of the DOE through its appointed Undersecretary, which shall 
facilitate in the processing and approval of permits, among others. 
To facilitate the development of RE projects, the DOF, DENR, National 
Power Corporation - Small Power Utilities Group (NPC-SPUG), TRANSCO, all 
Government Financial Institutions (GFIs), the private sector, academe, non- 
governmental organizations and other involved agencies shall extend technical 
assistance and designate a representative to the REOSS. 
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Section 25. Renewable Energy Trust Fund (RETFI. - A Renewable Energy 
Trust Fund, to be administered by the DOE as a special account in any of the GFI, is 
hereby established for the development and utilization of renewable energy 
resources. The RETF shall be exclusively used to: 
(a) Finance the research, development, demonstration and promotion of the 
widespread use or renewable energy systems for power and non-power 
applications; 
(b) Conduct resource and market assessment studies for biomass, solar, wind, 
hydro, tidal current, and ocean energy; 
(c) Directly subsidize the development and operation of new RE resources to 
provide for their competitiveness in the market; Provided, That the grant 
thereof shall be done through a competitive and transparent manner; 
(d) Create and bperate the REOSS, where an RE database and all related laws, 
rules and regulations shall be made available to RE proponents and 
stakeholders; Provided, That no more than two per centum (2%) of the Fund 
shall be used for this purpose; 
(e) Propagate RE knowledge by training, accrediting, and providing benefits to 
ARECs; AND 
(0 Such other activities as are necessary or incidental to carry out the provisions 
of this Act. 
For this purpose, there shall be appropriated an amount of One Billion Pesos 
(Php 1,000,000,000.00) from the General Appropriations Act (GAA). 
The RETF shall be sourced from: 
a. Fines and penalties; 
b. Mandatory RES Contributions; 
c. Fees exacted pursuant to this Act; 
d. Demonstration Earnings; 
e. Grants; 
f. 
Donations; and 
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g. RE Production PredictabiIity/Forecast Premium/Bonus. 
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The DOE shall manage and administer the said fund subject to existing 
government accounting and auditing procedures. Further, the DOE, in consultation 
with other government units and agencies, is hereby authorized to manage and 
disburse the funds to be used solely for the purposes enumerated herein in the form 
of grants, loans, equity investments, loan guarantees, and insurance or to access 
other local or international funds pursuant to the provisions of this Act. 
Chapter X 
GENERAL PROVISIONS 
Section 26. Creation of Renewable Energy Bureau. - In accordance with the 
power of the Secretary and with the approval of the President, the Renewable 
Energy Bureau is hereby created for the effective management and administration of 
the renewable energy resources and development. The Renewable Energy Bureau 
shall have the following Divisions: Hydropower Division; Geothermal Division; 
Solar and Wind Division and Ocean and Biomass Division. 
The Renewable Energy Bureau shall have the following powers and 
functions: 
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a. Assist in the formulation and implementation of policies for the efficient and 
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economical 
transformation, 
conversion, 
processing, 
refining, 
market 
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packaging and financing, transportation and storage of hydro, geothermal 
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and other renewable energy resources such as wind, solar, biomass and 
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ocean, and ensure their efficient and judicious utilization; 
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c. Develop, promote and commercialize applications of biomass, solar, hydro, 
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wind, wood and charcoal, and other renewable energy resources including 
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new and more efficient and economical transformation, conversion, 
b. Monitor sectoral energy consumption and conduct efficient utilization audit, 
technical training, energy management advisory services, and technology 
application projects on efficient energy utilization; 
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processing, refining, marketing, distribution, transportation and storage 
technologies for renewable energy resources; 
d. Assist in the implementation of an integrated rural electrification program to 
effectively address the energy self-sufficiency in rural communities and 
implement, monitor and regularly review the implementation program for 
efficient administration; 
e. Provide information on renewable energy technologies and develop short- 
and long-term renewable energy technology development strategies; 
f. Monitor the implementation of renewable energy projects in coordination 
with the DENR, National Water Resources Board (NWRB), National 
Commission on Indigenous People and other government agencies to ensure 
compliance with the existing regulations and prescribed environmental 
standards; AND 
g. Monitor and supervise renewable energy projects implemented by 
government and private institutions including, affiliated renewable energy 
centers. 
Section 27. Product Standards and Testing Procedures. - The DOE shall, 
whenever necessary and in consultation with the Bureau of Product Standards, shall 
if necessary, establish product standards and testing procedures for selected 
renewable energy products, equipment, devices and accessories, in accordance 
with existing international renewable energy testing and product standards. The 
DOE and DTI shall jointly identify and designate laboratories and research facilities 
as accredited renewable energy testing laboratories to undertake the testing and 
labeling of renewable energy products, systems and devices according to the 
approved standards and procedures. 
Section 28. 
Technology and Manpower Development Program. - The 
DOE, in coordination with other government units and agencies, shall ensure 
sustained technology, manufacturing and manpower development programs to 
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increase the education, expertise, training, skills and awareness of planners, 
implementors, inventors, trainors, technicians and beneficiaries in the national and 
local levels in appropriate aspects of renewable energy development and utilization. 
All foreign RE technology suppliers and manufacturers shall be required to 
conduct technology transfer activities to their proposed users and beneficiaries of 
the technology. The DOE shall ensure the capacity building sessions are 
incorporated into the work plan of the foreign technology suppliers prior to project 
implementation. 
Section 29. Information Management: The DOE shall create, maintain and 
regularly 
update an 
information system of 
renewable energy 
resources, 
technologies, suppliers, companies and projects for the purposes of, but not limited 
to: 
(1) Formulation of Annual energy and power development plans of the country; 
(2) Information dissemination to the public who are interested to invest in 
renewable energy generation projects or in research and development 
studies, etc.; 
(3) Monitoring and evaluation of existing technologies and projects; and 
(4) Formulation of appropriate policies. 
As such, the information system shall be backed up by a reliable database 
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commercialization of renewable energy systems. The DOE shall be responsible for 
the development of the institutional mechanism to ensure sustained maintenance 
and upgrading of the information exchange system. 
Section 30. Financia/ Assistance Program. - Government financial 
institutions (GFls) such as the Development Bank of the Philippines (DBP), 
Philippine National Bank (PNB), Government Service Insurance System (GSIS), 
Land Bank of the Philippines (LBP) and other government institutions that shall, in 
accordance with and to the extent allowed by the enabling provisions of their 
respective charters or applicable laws, accord high priority to applications for the 
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development, utilization and commercialization of RE projects, duly recommended 
and endorsed by the DOE. 
Section 31. Adoption of Waste-to-Energy Technologies in Livestock Farms 
and Slaughterhouses. - The DOE shall, whenever practicable, require large-scale 
livestock farms and slaughterhouses to adopt waste-to-energy facilities such as 
biogas systems. It shall likewise facilitate the provision on technical assistance in 
the adoption of the waste-to-energy technologies in coordination with private 
companies. The DOE shall coordinate with the DENR for the regular monitoring 
and compliance of this provision. 
Chapter XI 
FINAL PROVISIONS 
Section 32. Implementing Rules and Regulations (IRRs). - Within six (6) 
months from the effectivity of this Act, the DOE shall, in collaboration with all RE 
stakeholders, promulgate the Implementing Rules and Regulations. 
Section 33. Penalty Clause. - The DOE shall formulate and promulgate 
appropriate penalties to any person who willfully violates violations of rules or 
regulations provided in this Act shall, upon conviction, be punished by a fine of not 
less than one hundred thousand pesos (P 100,000.00), or by imprisonment of not 
less than two (2) years but not more than five (5) years, or both, at the discretion of 
the court; Provided, However, That if the violations committed by a juridical person 
the penalty provided shall be imposed on the official or employee thereof 
responsible for the violation; Provided, further, That if the violation is committed by 
a government official or employee including those in government-owned or 
controlled corporations, he / she shall, in an addition to the promulgated penalties 
provided herein, be subject to disciplinary administrative proceedings and penalties. 
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Section 34. Official Development Assistance. - The provision of Executive 
Order No. 230 of 986, on the power of the NEDA Board, and the rules and 
regulations governing the evaluation and authorization for the availment of Official 
Development Assistance notwithstanding the privatization of renewable energy 
facilities as provided for in this Act shall be eligible for foreign loans and grants 
without further evaluation by the NEDA Board, subject to Section 21, Article XI1 of 
the Constitution. 
Section 35. Separability Clause. If for any reason any provision of this Act is 
declared unconstitutional or invalid, such parts not affected thereby shall remain in 
full force and effect. 
Section 36. Repealing Clause. - All laws, orders, doctrines, decrees, rules 
and regulations or parts thereof, including Executive Order No. 462 (Ocean, Solar 
and Wind), Executive Order No. 232, Republic Act No. 7156 [Mini-Hydro Act), 
Republic Act No. 7160 (Local Government Code), and Presidential Decree No. 
1442 (Geothermal Act), among others, inconsistent with any of the provisions of this 
Act are hereby repealed, amended or modified accordingly. 
Section. 37. Effectivity Clause. This Act shall take effect fifteen (15) days 
after its full and complete publication in the Official Gazette or in at least two (2) 
newspapers of general circulation. 
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