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THE PHILIPPINE WIND POWER RESOURCE POTENTIAL

The Department of Energy (DOE) and the U.S. National Renewable Energy Laboratory (NREL) declared 25 regions in the Philippines as Competitive Renewable Energy Zones (CREZ) with a total of:

94,000 MW Wind Energy
Gross Capacity Potential

The CREZ is a stakeholder-driven planning process chaired by the DOE with financial support from the United States Agency for International Development (USAID) and technical support from the U.S. National Renewable Energy Laboratory (NREL).

This is in accordance with the DOE’s issued DC 2018-09-0027, “Establishment and Development of CREZs in the Philippines.” This initiative aims to encourage the transmission upgrades and expansion towards the optimal utilization of the country’s indigenous RE resources. The CREZ involves a proactive transmission planning approach, which aims to connect CREZ to the power system. Thus, these zones open the opportunities for private sector development and reduce investment barriers by directing transmission development and RE developers to the country’s most promising Renewable Energy opportunities.

The indicative CREZ includes two zones in the  Negros Island with a total gross potential capacity of 9,400 MW or 10% of the total national gross capacity.  The Negros CREZ covers the Bago Windfarm and other neighboring cities and municipalities within the area.

Source: Philippine Energy Plan 2018-2040

Wind Energy Service Contracts

Awarded by the Philippine Government as of September 2021
(91 Projects Including the Bago Windfarm)

Indicative Capacity*

%

7000 MW

Installed Capacity

%

443 MW

For Development

%

6557 MW

*Out of  91 awarded projects only 31 has indicative potential capacities presented aggregating to 7000MW.

Fiscal Incentives

For Renewable Energy Projects and Activities in the Philippines

In accordance with the provisions of Republic Act 9513, otherwise known as the “Renewable Energy Act of 2008”, Renewable Energy (RE) developers of renewable energy facilities, including hybrid systems, in proportion to and to the extent of the RE component, for both power and non-power applications, as duly certified by the DOE, in consultation with the BOI, shall be entitled to fiscal incentives which include, among others, the following:

  • Income Tax Holiday (ITH) for the first seven (7) years of its commercial operations, the duly registered RE developer shall be exempt from income taxes levied by the national government.
  • Duty-free Importation of RE Machinery, Equipment and Materials within the first ten (10) years upon the issuance of a certification of an RE developer, the importation of machinery and equipment, and materials and parts thereof, including control and communication equipment, shall not be subject to tariff duties.
  • 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 RE Developer actually and exclusively used for RE facilities shall not exceed one and a half percent (1.5%) of their original cost less accumulated normal depreciation or net book value.

  • Net Operating Loss Carry-Over (NOLCO). – The NOLCO of the RE Developer during the first three (3) years from the start of commercial operation which had not been previously offset as deduction from gross income shall be carried over as a deduction from gross income for the next seven (7) consecutive taxable years immediately following the year of such loss.
  • Corporate Tax Rate. – After seven (7) years of income tax holiday, all RE Developers shall pay a corporate tax of ten percent (10%) on its net taxable income.
  • Zero Percent Value-Added Tax Rate. – The sale of fuel or power generated from renewable sources of energy such as, but not limited to, biomass, solar, wind, hydropower, geothermal, ocean energy and other emerging energy sources using technologies such as fuel cells and hydrogen fuels, shall be subject to zero percent (0%) value-added tax (VAT).