New and renewable energy programme (Exec. Order 462)

The policy aims to: a. To accelerate the exploration, development, utilization and commercialization of ocean, solar, and wind (OSW) energy resources which are indigenous, renewable, environment-friendly and of such abundance that can provide the Philippines self-sufficiency in energy and possibly surpluses for export in the future despite high energy demand due to rapid economic growth; b. To enable and enhance private sector participation in the exploration, development, utilization and commercialization of OSW energy resources; c. To ensure the proper management of OSW energy resources, consistent with the countrys goals of energy self-sufficiency, affordability, and sustainable development. Executive Order 462, promulgated in 1997, strengthened the private sector?s involvement in new and renewable energy development by allowing them to launch alternative energy projects. Along the same lines as when exploration rights for fossil energy sources are awarded, in the case of renewable energies, too, a contract must be concluded with the state according to which a share of the net profits is paid to the state ("production sharing contract"). In 2000 the Programme was modified so that projects with a capacity below 1MW are exempt from the levy on net profits, and the levy is limited to 15%. The Department of Energy has also pledged to support project development and ficing, for example in the form of drawing up feasibility studies and location development. Included under the New and Renewable Energy Programme are Area-based Energy Programmes (ABEPs), to promote the development and use of renewable energy sources in the provinces. Local energy supply concepts are being drawn up under this programme, which is implemented by partner institutions, such as universities.

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