# DC2022-09-0030 — Adjusted Annual RPS Percentage Increment (Km) ## Department Circular No. DC2022-09-0030 **Prescribing the Adjusted Annual Percentage Increment to be Imposed on All Mandated Participants of the Renewable Portfolio Standards for On-Grid Areas** Signed: 23 September 2022 by DOE Secretary Raphael P. M. Lotilla Effectivity: 15 days after publication in two newspapers of general circulation --- ## WHEREAS RECITALS 1. RA 7638 (DOE Act of 1992) declares State policy to ensure continuous, adequate, and economic energy supply through intensive exploration, production, management, and development of indigenous energy resources. 2. EPIRA (RA 9136) declares State policy to ensure quality, reliability, security, and affordability of electric power supply; EPIRA Section 37 mandates DOE to encourage private sector investments and promote RE development. 3. RE Act (RA 9513) declares State policy to increase RE utilization. 4. RE Act Section 6 mandates NREB to set the minimum percentage of generation from eligible RE resources and determine to which sector RPS shall be imposed on a per grid basis. 5. RE Act IRR Section 4(c)(2) states DOE shall promulgate RPS Rules including the annual minimum percentage increment, which shall in no case be less than one percent (1%) of annual energy demand over the next ten years. 6. DOE promulgated DC2017-12-0015 (RPS On-Grid Rules) effective 31 December 2017, placing on Mandated Participants (MPs) the obligation to source or produce a minimum RE percentage of their electricity requirements. 7. RPS On-Grid Rules Section 7 set an aspirational target of 35% RE share in the generation mix by 2030, subject to regular review. The Minimum Annual Incremental RE Percentage (Km) is defined as the incremental RPS percentage at year m for MPs in Luzon, Visayas, and Mindanao, initially set by NREB at 1% per year, subject to annual review. The RPS formula is: RPS(n) = ES(n-1) × (Ko + ΣKm), where Ko is the percentage of total energy sales from FIT plants to total energy sales of all MPs at Year 0, Km is the Minimum Annual Incremental RE Percentage at year m, and ES(n-1) is Net Electricity Sales in the previous year for each MP (in MWh). 8. RPS On-Grid Rules Section 9(b) provides the Km shall be adjusted when the prevailing percentage is deemed insufficient to attain the target RE share. 9. NREB's proposed 2021–2040 National Renewable Energy Program (NREP) recommended increasing Km from 1% to 2.52% starting 2023, to meet at least 35% RE share by 2030 and more than 50% by 2040. 10. RPS Composite Team (RPSCT) Resolution No. RPSCT2021-08-27-001 approved public consultation on the proposed upward adjustment of Km from 1% to 2.52% for planning period 2023–2040. --- ## SECTION 1. TITLE "Prescribing the Adjusted Annual Incremental RE Percentage (Km) under the RPS On-Grid Rules" — referred to as the "Adjusted Km." --- ## SECTION 2. ADJUSTMENTS IN THE ANNUAL INCREMENTS The Adjusted Km of **2.52%** 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 MWh. **RPS Minimum Requirement Schedule (Ko + Km):** | Year | Ko (base) | Km (increment) | Minimum RPS Requirement | Target RE Share | |------|-----------|----------------|------------------------|-----------------| | 2020 | 3.34% | 1.00% | 4.34% | 21.24% | | 2021 | 3.34% | 2.00% | 5.34% | 20.12% | | 2022 | 3.34% | 3.00% | 6.34% | 20.49% | | 2023 | 3.34% | 5.52% | 8.86% | 21.87% | | 2024 | 3.34% | 8.04% | 11.38% | — | | 2025 | 3.34% | 10.56% | 13.90% | 23.28% | | 2026 | 3.34% | 13.08% | 16.42% | 24.73% | | 2027 | 3.34% | 15.60% | 18.94% | 26.24% | | 2028 | 3.34% | 18.12% | 21.46% | 27.78% | | 2029 | 3.34% | 20.64% | 23.98% | 29.37% | | 2030 | 3.34% | 23.16% | 26.50% | 30.98% | | 2040 | 3.34% | 48.36% | 51.70% | 51.48% | *Note: Table based on current simulations; may change depending on annual RPSCT assessment of RPS compliance levels, Net Electricity Sales of MPs, and meeting the aspirational target. RE share for 2020 is based on DOE 2020 Power Statistics.* --- ## SECTION 3. COVERAGE This Circular applies to all Mandated Participants under the RPS Rules for On-Grid Areas only. --- ## SECTION 4. DEFINITION OF TERMS This Circular adopts, by reference, terms defined in the RE Act and its IRR, the RPS On-Grid Rules, RE Market Rules, and relevant DOE Department Circulars. --- ## SECTION 5. ANNUAL REVIEW As provided under Section 14 of the RPS On-Grid Rules, DOE (in coordination with NREB and in consultation with stakeholders) shall review and set the Km for each succeeding year (m+1) no later than 30 September of each year, considering the existence of service contracts and change in criteria of eligible RE facilities. 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. The RPSCT may, based on actual state of RE development (particularly RE share in the power generation mix and subject to technical and economic considerations), recommend necessary adjustments (upward/downward) in the annual increment for RPS compliance. --- ## SECTION 6. MANDATED PARTICIPANTS WITH FULL CONTRACTED CAPACITY AND ENERGY Any MP whose RPS compliance would result in over-contracting of power supply contracts may apply for a provisional exemption from DOE through the RPSCT, per Section 25 of the RPS On-Grid Rules. The RPSCT shall evaluate and recommend provisional exemptions to the DOE Secretary, upon validation of power supply agreements and relevant data including DDP, RPS Compliance Plan, and status of power supply agreements filed before ERC. All power supply contracts to be entered into by MPs after promulgation of the RPS On-Grid Rules shall consider the RPS annual increments and timelines in this Circular. Failure to comply shall result in non-compliance and corresponding administrative and criminal sanctions per RPS On-Grid Rules Sections 23 and 24. --- ## SECTIONS 7–9. FINAL PROVISIONS **Section 7. Separability Clause.** **Section 8. Repealing Clause.** Provisions of other circulars, orders, issuances, rules, and regulations inconsistent with this Circular are hereby repealed, amended, superseded, or modified. **Section 9. Effectivity.** 15 days after publication in two newspapers of general circulation; copies filed with UP Law Center-ONAR.