Alternergy Holdings Corp., through its wholly-owned subsidiary Pililla AVC Corp., and Shell Overseas 1 Investment B. V. (Shell) announced Tuesday their partnership to jointly explore offshore wind potential in the Philippines.
The companies have already obtained a Wind Energy Service Contract (WESC) from the Department of Energy (DOE) to assess the feasibility of an offshore wind project in the wind-swept Calavite Passage near Mindoro.
During a press briefing held Tuesday morning, Alternergy chairman and former Energy Secretary Vince Pérez said the project has a potential capacity of one gigawatt (GW).
The proposed project, with an estimated cost of $5 million per megawatt (MW), could take at least five years before actual construction starts. Officials said permitting process, transmission line concerns, and coordination with the local government unit (LGU) must be sorted out first.
“At least five years before we can say that we expect the first construction of the project. We need to work with NGCP [National Grid Corporation of the Philippines] and Transco [National Transmission Corp.] to resolve transmission issues. This will be a coordinated effort to allow offshore wind to be connected. We are also coordinating with DOE to assure we will build this project in areas without security,” added Perez.
The World Bank has estimated that the robust development of offshore wind could add 20 GW of installed capacity by 2040, accounting for 14 percent of the Philippines electricity needs and some $14 billion of value added to the economy.
“The Philippines’s offshore wind industry is promising and still at its nascent stage. Shell, as our strategic partner with 50 years of deep water offshore and over 20 years of offshore wind development experience, will bring in its global track record, supply chain access, and technical expertise in developing large-scale bottom-fixed and floating offshore wind projects,” said Perez.
Shell, for its part, looks forward to this new partnership to jointly explore the feasibility of one of the Philippines’s promising offshore wind projects. Aside from the Calavite Passage Wind Power Project, Alternergy and Shell are looking at other offshore wind sites for possible development.
“Alternergy is a pioneer in renewable energy and has successfully brought onstream the Philippines’ first onshore wind farm even before there was any enabling law,” said Sarah Rose Lim, Shell’s Head of Offshore Power for Philippines.
DOE Secretary Raphael P.M. Lotilla expressed his appreciation for the “enthusiasm” of the private sector in developing offshore wind (OSW) projects in the country.
“I thanked these local companies and their foreign partners for taking bold action in committing to deliver clean energy to the Filipino people. Harnessing the power potential of offshore wind resources requires intensive capital cost and highly skilled manpower resource, thus partnerships are a key strategy.
These will not only expedite the development process but will also help in facilitating operational knowledge transfer and providing access to technologies as well as unlock job opportunities for our people,” Lotilla said.
PetroGreen Energy Corp (PGEC) also recently formed three special purpose vehicles for its OSW projects in Luzon and the Visayas together with its foreign partner, Copenhagen Energy (CE).
Lotilla witnessed the signing of PGEC and CE for the Buhawind Energy Northern Luzon, Buhawind Energy Northern Mindoro, and Buhawind Energy East Panay with a total capacity of about 4 GW.
He said all those awarded contracts are still into research and exploration activities. Meanwhile, the government is undertaking a review and enhancement of the policies and guidelines that will ensure the efficient and optimal development of OSW projects in view of the serious interest it has been receiving.
“I am optimistic that with the recent amendment of the Implementing Rules and Regulations of the Renewable Energy Act of 2008, more foreign investors will come in to partner with our local companies.”