DOE Prescribes Policies and Programs to Promote the Development of Biomass Waste-to-Energy Facilities

Pursuant to the mandate of the Department of Energy (“DOE”) to promote the development of indigenous and renewable energy (“RE”) resources, the DOE promulgated Department Circular No. DC2022-02-0002 which prescribes the policies and programs aimed to enhance the development of biomass waste-to-energy (“WTE”) facilities. The circular applies to RE Developers, local government units, distribution utilities (“DU”) (including Electric Cooperatives), Philippine Electricity Market Corporation and the Independent Market Operator, the National Grid Corporation of the Philippines, National Transmission Corporation, Energy Regulatory Commission, concerned government agencies and entities, and other entities which may be later created or identified as relevant to the implementation of the circular

The DOE recognizes biomass WTE resources as a class of renewable energy resource as defined under the Renewable Energy Act or Republic Act No. 9513 (“RE Act”). Under the RE Act, interested RE Developers must enter into a service or operating agreement (“RE Contract”) with the Philippine Government, through the President or the DOE Secretary. RE Contracts are awarded through (a) an Open and Competitive Selection Process or (b) Direct Application. Holders of RE Contracts are entitled to receive incentives provided for in the RE Act and its implementing rules upon issuance of a Certificate of Registration by the DOE. To be eligible for the benefits under this circular, Biomass WTE facilities must be duly registered with the DOE pursuant to the RE Act and must be compliant with pertinent related laws. 

Under this circular, Mandated Participants, who are electric power industry participants required to comply with the Renewable Portfolio Standards annual requirement, shall be issued one (1) Renewable Energy Certificate (“REC”) for every 1-MWh generation sourced from duly registered eligible Biomass WTE facilities. Generation shall be properly metered as basis for the issuance of RECs. The provisions of the Renewable Energy Market Rules (“REM Rules”) or DC No. DC2019-12-0016 on the issuance of RECs shall apply. For more information regarding the REM Rules, please refer to this issuance.

For eligible Biomass WTE facilities embedded to a DU with capacity within the DU’s uncontracted electricity supply, the power supply agreement between the Biomass WTE facility and the DU is recommended to be for a minimum of twenty (20) years. Lastly, unlike other RE Developers, eligible Biomass WTE facilities embedded to a DU shall be exempt from the conduct of Competitive Selection Process.

The necessary rules and regulations for the implementation of the circular shall be promulgated by the Energy Regulatory Commission at a later date.