Philippine Energy Efficiency Alliance (PE2) considers 2024 a momentous year for the country, as it called for further regulatory advancements and improved market conditions to amplify the effectiveness of the Energy Efficiency and Conservation Act.
In a statement, PE2 president Alexander Ablaza emphasized that the surge in cooling and refrigeration demand during the transition from January 2023’s cooler climate to the hotter summer months of April and May necessitated an extra 3,340 megawatts (MW) of generation and transmission capacity to maintain energy reliability.
“Why are we planning additional generation and transmission capacities ahead of peak demand management? We should aspire to flatten our daily and annual peak demand curves, especially through permanent peak shaving through cooling efficiency or load-shifting to off-peak hours through energy storage systems,” said Ablaza.
PE2 suggested that permanent reductions in mid-day peak demand could be achieved by enhancing cooling efficiency, which could be facilitated through a large-scale replacement of inefficient air conditioners, upgrading chiller plants using the energy service company (ESCO) business model, or by establishing and operating district cooling systems.
Improvements can also be made by enhancing key components such as motors, drives, compressors, lighting systems, controls, and various other commercial and industrial systems.
Additionally, Ablaza said that the CREATE MORE Act (Republic Act 12066) is poised to drive greater private sector participation in energy efficiency (EE) initiatives, reinforcing the objectives of the Energy Efficiency and Conservation Act (Republic Act 11285) and unlocking new opportunities for sustainable development.
Meanwhile, the Board of Investments (BOI) clarified that under the CREATE MORE Act, domestic market enterprises undertaking energy efficiency (EE) projects and registered with an investment promotion agency like the BOI can now choose between a four to seven-year income tax holiday with a 10-year enhanced deductions regime (EDR) or a 14- to 17-year EDR, thereby enhancing the commercial viability of EE investments.
The BOI also said that Energy Service Companies (ESCOs) and Third-Party Project Developers (TPPDs) are eligible for Income Tax Holiday (ITH) incentives for both simple and complex energy efficiency (EE) projects, provided they achieve at least 15% energy savings within the specified project boundary.
PE2 is also commending the DOE for its initiatives to broaden the reach of the Energy Efficiency and Conservation Act, ensuring that smaller-scale commercial, industrial, and transport businesses are now recognized as designated establishments (DEs) with responsibilities to adopt energy efficiency measures.
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