Power Industry
In 2001, the Government enacted Republic Act No. 9136, otherwise known as the Electric Power Industry Reform Act (EPIRA), which set out major reforms in the power industry. The EPIRA aims to deregulate and restructure the power industry with the goal of increasing competition and attracting more private sector investments. The heightened competition is envisioned to increase efficiencies in the industry that will eventually redound to the benefit of the end-consumers. To achieve this, EPIRA mandated the restructuring of the Philippine electric power industry into four sectors: Generation, Transmission, Distribution and Supply.
Existing Industry Structure
Future Industry Structure
Renewable Energy Law
The Renewable Energy Act of 2008 or Republic Act 9513 was signed into law on December 16, 2008 and became effective on January 30, 2009. This landmark law aims to accelerate the development and use of the country's vast renewable energy resources through fiscal and non-fiscal incentives for investors. Among these incentives are seven-year income tax holidays for RE developers, exemption from VAT and duty-free importation of equipment and machinery, reduction of corporate income tax after the expiry of the income tax holiday to 10% of net income as well as a zero percent VAT rate for the sale of power from RE.
The law also seeks to institutionalize a Renewable Portfolio Standard requiring the country's electric utilities to obtain a certain portion of their electricity from clean, indigenous renewable energy sources. This mechanism is intended to promote the rapid development of these resources. Official DOE estimates of RE potential in the country are: 4,406.56 MW for geothermal energy; 76,600 MW of potential installed capacity for wind resources (in a 10,000-square kilometer area); 147 MW for hydro applications in Visayas; 1,784 MW for mini-hydros from 888 sites; an annual potential average of 5.0-5.1 kWh/m2/day from solar power.
