NREB approves Green Energy Option and RE Trust Fund Rules

By Lenie Lectura – June 19, 2017 

from Business Mirror

THE National Renewable Energy Board (NREB) has approved the rules on Green Energy Option and Renewable Energy (RE) Trust Fund.

“NREB has finalized and approved the Green Energy Option Rules and RE Trust Fund Rules. With this, we will endorse the same to [the] DOE [Department of Energy] for approval,” NREB Chairman Jose Layug Jr. said in a text message.

The Green Energy Option is a mechanism to provide end-users the option to choose RE as their source of energy. The DOE, in consultation with the NREB, will establish the program and formulate the implementing rules and regulations (IRR).

The Energy Regulatory Commission, on the other hand, will issue the necessary regulatory framework following the objectives of the program. Moreover, parties, such as the National Transmission Corp., its concessionaire, distribution utilities  (DU) and the Philippine Electricity Market Corp. are mandated to provide the mechanisms for the physical connection and commercial arrangements in support of the program.

Meanwhile, for end-users who will enroll under the program, the IRR states that they will be provided with information through their monthly electric bill on how much of their energy consumption and generation charge is provided by RE facilities.

The Green Energy Option and the RE Trust Fund are among the priorities that the board is pursuing to fully realize the benefits of Republic Act (RA) 9513, or the Renewable Energy Act of 2008.

Under the law, the said fund shall be sourced from proceeds from the emission fees collected from all generating facilities consistent with RA  8749, or the Philippine Clean Air Act.

Other sources include 1.5 percent of the net annual income of the Philippine Charity Sweepstakes Office; 1.5 percent of the net annual income of the Philippine Amusement and Gaming Corp.; 1.5 percent of the net annual dividends remitted to the National Treasury of the Philippine National Oil Co. and its subsidiaries; and 1.5 percent of the proceeds of the government share collected from the development and use of indigenous non-RE resources, among others.

The creation of the RE Trust Fund Rules is meant to enhance the development and greater utilization of RE. It shall be administered by the DOE as a special account in any of the government financial institutions that shall be exclusively used to finance the research, development, demonstration and promotion of the widespread and productive use of RE systems for power and nonpower applications.

The fund shall also support the development and operation of new RE resources to improve their competitiveness in the market.

Layug said an endorsement from the DOE for these two programs could be processed within three to five months. “The DOE will issue a circular on the rules. Usually, it’s just a yes or no after we have approved it,” he added.

The two programs, Layug said, could be implemented this year. “It is the target that these are up for implementation within the year.”

Layug also added that NREB is currently working on the rules on renewable portfolio standards (RPS), which requires DU to source a portion of their power supply from eligible RE sources.

RPS is intended to contribute to the growth of RE industry. If implemented, this will help the agency attain its goal of maintaining the RE share in the national energy mix to at least 35 percent by 2030.

The scope of proposed RPS rules include the following: types of RE sources; yearly minimum RPS requirement; annual minimum incremental percentage of electricity sold by each mandated participant, which is required to be sourced from eligible RE resources and which shall, in no case, be less than 1 percent of its annual energy demand over the next 10 years; and means of compliance by the mandated participant set by the government to meet the RPS requirements.

The following entities would be mandated to participate in the program: DUs, licensed retail electricity supplier, directly connected customers (DCCs), supplier of last resort, entities authorized as distributors within the economic zones and generating companies only to the extent of their actual supply to their DCCs.

A composite team will determine the minimum annual RPS requirement per mandated participant.

The members of the said team will be composed of representatives from the NREB, Electric Power Industry Management Bureau, Renewable Energy Management Bureau, Legal Services and Energy Policy and Planning Bureau.

Meanwhile, the minimum annual increment in the RPS level shall be initially set at 2.15 percent to be applied to the actual total supply portfolio of the mandated participant in each grid for the previous year, the draft circular stated.

RE sources include biomass, waste-to-energy technology, wind, solar, run-of-river, impounding hydropower sources that meet internationally accepted standards, ocean, hybrid systems, geothermal and other RE technologies that may be later identified by the DOE.

“We will probably forward our endorsement to the DOE sometime July or onward,” Layug added.

While the DOE, according to Director Mario Marasigan, cannot commit on the approval of the Green Energy Option and RE Trust Fund since “these are priority policies of DOE.”