DoE circular on energy efficiency projects out soon

THE DEPARTMENT of Energy (DoE) said that it is set to finalize this week a department circular on how energy efficiency (EE) projects will be endorsed to the Board of Investments (BoI) for fiscal incentives.

“The DoE has collaborated with other government agencies to stimulate investment through the use of energy efficient technologies in designated establishments. The culmination of our partnership with the Board of Investments will be in the finalization of the department circular on the recommendation of energy efficiency projects to the BoI… later this week,” Undersecretary Jesus Cristino P. Posadas said Monday during the Energy Efficiency Day 2021 virtual event.

Mr. Posadas delivered Energy Secretary Alfonso G. Cusi’s speech during the event, which was organized by the Philippine Energy Efficiency Alliance.

“We have seen that with any EE&C (Energy Efficiency & Conservation) Act-initiated program in other countries, the government is taking the lead by granting fiscal and non-fiscal incentives alike,” Mr. Posadas said.

The DoE has been soliciting comment on a draft circular that detailed the application process and criteria for evaluating EE projects for fiscal incentives. The draft also sought to define EE projects, and classify them based on complexity.

In the draft, qualified EE projects can avail of an income tax holiday (ITH), provided that they “meet the minimum 15% project boundary.” This boundary refers to the “percentage range of energy savings to avail of an ITH.”

On Monday, Mr. Posadas said that the BoI has “determined that a healthy ITH must be put in place to lower the cost of capital-intensive projects which are being built during a global economic slump.”

He said EE&C projects promise lower costs and reduced emissions.

“Pioneers… stand to reap greater rewards, especially in terms of immediate lower operational costs, (and) the possibility of short-term cost recovery for upgrading systems with energy efficient technology. Industry-wide participation can greatly reduce greenhouse gas emissions especially when done at a large scale,” he said.

To date, the DoE has registered 44 energy service companies (ESCOs) which have “shown their enthusiasm in promoting EE&C projects and practices across the country.” Mr. Posadas said the department expects more ESCO applications once more firms realize the potential of EE projects.

An ESCO develops, installs, and funds projects designed to improve energy efficiency, and reduce operations and maintenance costs for its customers’ facilities. — Angelica Y. Yang