Philippines seen as 1st in Southeast Asia to have offshore wind

MANILA, Philippines — Ongoing efforts by the government in the renewable energy sector have placed the Philippines in the best position to be the first nation in Southeast Asia to have offshore wind.

Mark Hutchinson, Global Wind Energy Council chair for South East Asia Task Force, said the Philippines could be the first country in the region to see an offshore wind project built.

He said an offshore wind project in the country may be operational by 2028 at the earliest.

“It takes a long time, but it will happen,” Hutchinson said.

He said there is strong interest among foreign companies to explore the offshore wind potential of the Philippines.

“So, all of these individual decisions by so many different companies are a vote of confidence that this market is moving forward. A lot of companies are looking to come here to have joint ventures and build,” he said.

Such strong interest is attributed to the efforts being undertaken by the government to improve investment climate in the country’s renewable energy sector.

“The foreign ownership restriction is gone, so you can bring in very experienced foreign developers who will partner with the domestic players,” Hutchinson said.

Foreign equity restrictions in the country’s renewable energy sector have been lifted following the Department of Energy (DOE)’s issuance of the amended rules of the RE Act of 2008.

With the amendment, the DOE said foreign citizens or foreign-owned entities may engage in the exploration, development, and utilization of the country’s RE resources such as solar, wind, biomass, ocean or tidal energy.

“RPS (renewable portfolio standards) is also now 2.5 percent instead of one percent. There is an auction this year and there’s going to be another one this year. It seems like there will be auctions every year,” Hutchinson said.

The RPS is a policy mechanism under Republic Act 9513 or the Renewable Energy Act of 2008 designed to increase the use of renewable energy sources for electricity generation.

It requires electricity suppliers, particularly the distribution utilities, to source or produce a specified fraction of their power supply from eligible renewable energy resources.

Meanwhile, the DOE last June awarded 19 contracts to various renewable energy developers after conducting the first round of the Green Energy Auction Program (GEAP).

GEAP was undertaken to support and facilitate immediate and timely investments in new or additional renewable energy capacities to ensure provision of adequate supply and competitive rates of electricity in the country.

President Marcos has approved the DOE’s proposal to explore and develop the country’s offshore wind potential as part of efforts to ensure energy security.

The agency is currently undertaking the review of the policies and guidelines of offshore wind projects to ensure their efficient and optimal development.

The DOE to date has awarded 42 offshore wind service contracts with an indicated 31.5 gigawatts (GW) of installed capacity.

The prime areas identified are in northern Luzon, Verde Island Passage, northern Mindoro and southern Mindoro.

The DOE said the current rule of thumb for offshore wind project investment is about $5 million per megawatt (MW), but this is expected to go down in the coming years with more deployment.

The DOE said average time span for offshore wind project to develop and see its first wind turbine erected could take anywhere from six years to nine years.

Energy Secretary Raphael Lotilla earlier said partnerships are a key strategy in harnessing the power potential of offshore wind resources as it requires intensive capital cost and highly skilled manpower resource.

He said these would not only expedite the development process but would also help in facilitating operational knowledge transfer and providing access to technologies as well as unlock job opportunities.

Source: https://www.philstar.com/business/2022/11/28/2226844/philippines-seen-1st-southeast-asia-have-offshore-wind