Republic of the Philippines

DEPARTMENT OF ENERGY
(Kagawaran ng Enerhiya)
DEPARTilENT CTRCULAR NO.0C2022- 0q -_!n!_a y
PRESCRIBING THE ADJUSTED ANNUAL PERCENTAGE INCREiIENT
TO BE IMPOSED ON ALL ilIANDATED PARTICIPANTS OF THE
REI{EWABLE PORTFOLIO STANDARDS FOR ON€RID AREAS

WHEREAS, Republic Act (RA) No. 7638, otheMise known as lhe "Depaftment of
Energy (DOE) Act of 1992,'declares as a policy of the State to, among others, ensure
the continuous, adequate and economic supply of energy through the integrated and
intensive exploration, production, management, and development of the country's
indigenous energy resources;
WHEREAS, RA No. 9136 otheruise known as the "Electic Power lndustry Reform
Act of 2001,' ot 'EPIRA," declares as a policy of the State to, among others, ensure
the quality, reliability, security and affordability of the supply of electic power;
WHEREAS, Section 37, Chapter lll of EPIRA mandates the DOE to encourage private
sector investrnents in the electricity seclor and promote the development of indigenous
and renewable energy (RE) resources;

WHEREAS, RA No. 9513, otheMise known as the'Renewable Energy Act of 2008"
or the 'RE Act" declares as a policy of the State to increase the utilization of RE by
institutionalizing the development of national and local capabilities in the use of RE
systems, and promoting their effcient and cost-effec{ive commercial application by
providing fiscal and non-fiscal incentives;
WHEREAS, Section 6 of the RE Act states that all stakeholders in the electric power
industry shall contribute to the growth of the RE industry of the country. Towards this
end, the National Renewable Energy Board (NREB) shall set the minimum percentage
of generation fom eligible RE resources and determine to which sectorthe Renewable
Portfolio Standards (RPS) shall be imposed on a per grid basis;
WHEREAS, Section 4(c), Paragraph (2), of the lmplementing Rutes and Regulations
(lRR) of the RE Act, states thatthe DOE shall, upon the recommendation of the NREB,
formulate and promulgate the RPS Rules which shall include, among others, the
annual minimum percentage increment required to be sourced from eligible RE
resources and which shall, in no case, be less than one percent (1%) of its annual
energy demand over the next ten ('10) years;

WHEREAS, the DOE promulgated Departrnent Circutar (DC) No. DC2017-12-0015
also known as the "RPS Rules for On-Gid A/Bas" or the "RPS On-Gnd Rutes,' on 22
December 201 7 and became effective on 31 December 2017, which placed upon the
Mandated Participants (MPs) the obligation to source or produce a minimum RE
percentage of their electricity requirements from eligible RE resources;

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WHEREAS, Section 7 of the RPS On-Grid Rules has set an aspirational target of
attaining 35% share of the RE in the generation mix by 2030, subject to regular review
and assessment by the DOE;
WHEREAS, Section 7 of the RPS On-Grid Rules also defines the Minimum Annual
lncremential RE percenlage (K.) as the incremental RPS percentage initially set by
the NREB at one percent (1%) at year m for MPs in Luzon, Visayas and Mindanao,
subject to annual review, such that the target RE share will be achieved (K is not
constant), which is expressed in the following formula:

RPS1,.1:ES1,"-r) *2*,,r7,: o
\A/here:
m

Year 0 to n, excluding the Transition Period

n

the Year of the RPS requirement starting at Year 1 and excluding
Transition Period

RPS1n1

RPS for the Year n for each MP starting at Year 1 (in MVVh,
rounded down to the nearest MWh)

lG = the percentage of total energy sales from plants under the Feedin Tariff System to the total energy sales of all MPs at Year 0

K.

Minimum Annual lncremental RE Percentage for all MPs at year
m

ES1n,r1

Net Electricity Sales in previous Year br each MP (in MVfi,
rounded down to the nearest M\/wr). For avoidance of doubt,
ESln-ry at Year 1 shall be the Net Electricity Sales of Year 0

WHEREAS, Section 9(b) of the RPS On-Grid Rules provides that the K. shall be
adjusted by the DOE, in coordination with the NREB, when the prevailing percentage
is deemed insufficient to attain the target RE share;
WHEREAS, the NREB in its proposed 2021-20/0 National Renewable Energy
Program (NREP), recommended the increase of lG from the initial one percent (1%)
to 2.52% starting 2023, to meet the aspirational target ofat least 35olo in the total power
generation mix by 2030 and more than 50% by 2040;
WHEREAS, the RPS Composite Team (RPSCT), through its Resolution No.
RPSCT2021-08 -27-OO1 , resolved to approve the conduct of public consultation on the
proposed upward adjustment of the K. from 1% lo 2.52o/o to be imposed on all MPs
under the RPS On-Grid Rules for planning period 2023-2040, as recommended by the
NREB.

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NOW THEREFORE, in consideration of the foregoing, the DOE hereby issues and
promulgates the adoption of the adjusted Km.
Section 1. Tide. This Circular shall be known as "Prescribing the Adjusted Annual
lncremental RE Percentage (K,) under the RPS On-Gnd Ru/es" and shall hereinafter
be referred to as the "Adjusted Kn."
Section 2. Adjustnents in the Annual lncrcments. The adoption of the Adjusted
K^ of 2.52o/o starting 2023 is necessary to meet the aspirational target of more than
50% RE share in the country's power generation mix by 2040 expressed in MVVh,
subject to Section 5 of this Circular:

tinimum RPS
Year

Ko

Km

Requircment
(Ko + Km)

2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030

Target RE
Shars

3.34o/o

I .00o/o

4.34o/o

21 .240/o

3.34o/o

2.00o/o

5.340/o

20.12o/o

3.34o/o

3.00o/o

6.340/o

20.49Yo

3.34o/o

5.52o/o

8.86%

21 .87o/o

3.34o/o

8.Mo/o
10.56%

11.38o/o

3.34o/o

13.90%

3.34o/o

13.08o/o

16.42o/o

23.28o/o
24.73o/o
26.24o/o

3.34o/o

15.600/o

18.94o/o

27 .780/o

3.34o/o

18.12o/o

21 .460/o

29.37o/o

3.34o/o

23.98%

30.98%

3.340/o

xxx

20.640/o
23.160/o

26.50o/o

xxx

32.620/o

xxx

xxx

xxx

2040

3.34o/o

48.36o/o

51.700/o

51 .48o/o

Not€: This table is based on currenl simulalions, but may change or v8ry depanding on lhe annuel assessmenl
ofthe RPSCT as to the RPS compliance levels, Net Eleciricig Sales ofMPs, ind mseting th6 aspirational
target of more lhan 50% RE share in th€ powsr generation mix by 2040. The RE shar8 for year 2O2O is
based on DOE 2020 Pow€r Sblistics.

Section 3. Coverage. This Circular shall apply to all MPs under the RpS Rules for
On-Grid Areas only.

Secfion 4. Definition of Terms. This Circular hereby adopb, by reference, the terms
defined in the RE Acl and its lRR, the RPS On-Grid Rules, RE Market Rules, as well
as relevant DOE Department Circulars.
Section 5. Annual Review. As provided under Section 14 of the RpS On-Grid Rules,
the DOE, in coordination with the NREB and in consultation with the stakeholders,
shall review and set the K. for each succeeding year (m+1) no later than the 30th of
September of each year in consideration of the existence of service contracts and
change in criteria of eligible RE facilities, among others.

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The Adjusted Km shall be included as an integral part of Distribution Utilities' (DUs)
Distribution Development Plan (DDP), and shall form part of the NREP, the Power
Development Plan, and the Philippine Energy Plan.
Towards this end, the RPSCT may, based on the actual state of RE development,
particularly on the share of RE in the power generation mix and subject to technical
and economic considerations, recommend
necessary adjustments
(upward/downward) in the annual increment for RPS compliance.

the

Section 6. tandabd Perticapanb with Fult Contracted Capaclty and Energy.
Any MP, whose compliance with their RPS requirements shall result to over
contracting of power supply contracts, may apply for a provisional exemption tom the
DOE through the RPSCT, in accordance with Section 25 of the RPS On-Grid Rules.

The RPSCT shall evaluate and recommend to the DOE Secretary any provisional
exemption, upon validation and verification of the power supply agreements entered
by the MPs and other relevant data and information such as the DDP, RPS
Compliance Plan and status of power supply agreemenb filed before the Energy
Regulatory Commission.

All power supply contracts to be entered into by the MPs, particularly the DUs, after
the promulgation of the RPS On-Grid Rules, shall consider the RPS annual increments
and timelines prescribed in this Circular. Any MP which fails to comply with this
provision shall be deemed non-compliant and may be meted the corresponding
administrative and criminal sanctions under Sections 23 and 24 of the RPS On-Grid
Rules, in accordance with due process requirements.

Section 7. Separability. lf any provision in this Circular is declared invalid or
unconstitutional, the other provisions not afiected thereby shall remain valid and
subsisting.

Section 8. Repealing Clause. The provisions of other circulars, orders, issuances,
rules, and regulations, which are inconsistent with the provisions of this Circular are
hereby repealed, amended, superseded, or modified accordingly.

Section 9. Effectivity. This Circular shall take effect fifteen (15) days after publication
in two (2) newspapers of general circulation. Copies of this Circular shall be filed with
the University of the Philippines Law Center - ffice of the National Administrative
Register.

RA

lssued on

P.M. LOTILLA
Secretary

sEP23 2022
at Energy Center, Rizal Drive
Bonifacio Global City, Taguig City
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