Alternergy, Shell partner to jointly develop offshore wind potential in Philippines

Renewable energy company Alternergy Holdings Corp. and Shell Overseas Investment B.V. have forged a partnership to jointly explore and develop the country’s offshore wind energy potential.

“This is a partnership of combined competencies and experiences towards the goal of boosting the Philippines’ renewable energy target,” Alternergy chairman and former Energy Secretary Vince Perez said in a statement provided during the ceremonial partnership signing in Makati City on Tuesday.

"The Philippines' offshore wind industry is promising and still at its nascent stage. The World Bank estimates that robust development of offshore wind could add 20 GW (gigawatts) of installed capacity by 2040, accounting for 14% of the Philippines electricity needs and some $14 billion of value added to the economy,” Perez said.

The Alternergy chairman said Shell, as the company’s strategic partner, “will bring in its global track record, supply chain access, and technical expertise in developing large-scale bottom-fixed and floating offshore wind projects.”

The partnership between Alternergy and Shell has secured a Wind Energy Service Contract (WESC) from the Department of Energy (DOE) to assess the feasibility of an offshore wind project in the Calavite Passage near Mindoro.

Apart from the Calavite Passage Wind Power Project, Alternergy and Shell will be looking at other offshore wind sites for possible development.

Asked how much investment is needed to develop offshore wind power, Shell head for offshore power-Philippines Sarah Rose Lim said, "Based on the DOE’s rule of thumb, it’s about $5 million per megawatt… but, of course, the figure will be fine-tuned as we [move forward]."

Perez, meanwhile, said Alternergy is targeting to produce one billion kilowatt-hours of renewable energy in the next five years, “in terms of solar, wind, hydro, and hopefully offshore wind.”

“This is equivalent to 500,000 Philippine households as much as in the city of Manila,” Perez said.

The DOE is crafting an executive order “in view of huge interest” in the offshore wind potential in the country.

The Energy department is tweaking policies, framework and guidelines governing the administration of WESCs to cover the technical, financial, operational, and administrative risks and challenges of OSW development.

To date, the DOE said it awarded 42 offshore wind service contracts with an indicated 31.5 GW of installed capacity.

The Energy department also amended the Implementing Rules and Regulations (IRR) of the Renewable Energy (RE) Act of 2008 to allow the 100% participation of foreigners in the exploration, development, and utilization of the country’s renewable energy (RE) resources. 

Perez said that Alternergy welcomes the lifting of foreign ownership limits in renewable energy investments as it is “good for the country and Alternergy.” —KG/VBL, GMA Integrated News