October 20th, 2022
House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) called on the Department of Energy to release amendments to the Renewable Energy Law, allowing full foreign equity in solar, wind, hydro, and other “kinetic” sources of renewable energy ‘without delay,’ following the issuance of a Department of Justice opinion that the sector can be opened to 100% foreign ownership.
“I urge Secretary Lotilla to release amendments to the Renewable Energy Law to allow full foreign ownership of renewable energy projects without undue delay. It is crucial for our fight to conserve foreign currency reserves and defend the peso, protect economic recovery, and make power cost cheaper in the country.”
“It’s make or break. We need some USD 121 billion in investments into renewable energy to achieve a clean energy scenario by 2040. And we need significant surpluses of renewable energy supply to lower power costs and accelerate industrialization,” Salceda emphasized.
“We need some 74,000 MW of additional renewable energy capacity to achieve clean energy and make our power system less dependent on oil price volatility. It’s a matter of the highest national interest, for now and for the long term. I am confident Secretary Lotilla appreciates the gravity and urgency of the situation.”
Salceda’s call reiterates a recent statement by top economists in the Foundation for Economic Freedom urging the DOE “under the leadership of Secretary Raphael Lotilla, [to] immediately issue a revised Implementing Rules and Regulations of Republic Act 9513 or the Renewable Energy Act to clarify the rules on foreign investments in RE and usher in an influx of investments in RE.”
Salceda adds that lifting foreign ownership restrictions will address a “self-imposed constraint in the EPIRA Law limiting the investments local players can make towards renewable energy.”
The EPIRA Law limits any single power sector player to just 25% of the market share of the national grid.
“Some players are already very near that threshold, since the power sector is severely concentrated in three players. Any further investments towards RE from these players will already break the law. So, until we amend that provision, with all its attendant risks, new foreign players will be the best alternative,” Salceda said.
Salceda also called upon the DOE to work with the Department of Interior and Local Government to work on accelerating local government approvals necessary for RE projects.
“Solar and wind projects tend to be land-intensive. And land conversion requires Sangguniang Bayan or Sangguniang Panlunsod approval. That can take time, and depending on the local government, it can even be a source of corruption. So, I strongly suggest that the IRR amendments to the RE Law include provisions simplifying the approval process for land conversion to RE.”
“Section 27 of the RE Law also gives the National Renewable Energy Board (NREB) the mandate of ‘promotion and dissemination of RE benefits to the national and local levels.’”
“That should include making Local Government Units understand the benefits of approving RE projects quickly.”