DOE sees P9-T investments from offshore wind service contracts
By Myrna M. Velasco – November 17, 2022, 3:29 PM
from Manila Bulletin
The Department of Energy (DOE) expects up to P9.0 trillion worth of investments if all prospective projects in the offshore wind (OSW) development sector will reach commercial operations phase.
According to Energy Secretary Raphael P.M. Lotilla, there are already 42 service contracts (SCs) awarded for offshore wind projects with aggregate capacities topping 31,500 megawatts.
The prime areas identified to have vast offshore wind capacity potential include Northern Luzon, Verde Island Passage, Northern Mindoro and Southern Mindoro, which are also the sites covered by the SCs of the “first mover” project-sponsors.
On a rule of thumb investment cost of $5.0 million per megawatt, the potential investments the government can corner from these clean technology deployments could each as much as $157.5 billion or P8.9 trillion based on the prevailing Philippine peso-US dollar exchange rate.
“Definitely, there’s been special interest. Last time, the Danish group was here and we expect another foreign company to be coming in and meeting with us in a week or so,” Lotilla said.
Lotilla further qualified that the whetted appetite of investors on this renewable energy investment sphere has been “from all over, whether it is directly from the companies themselves or through their Embassies that have called on the department, there have been various expressions of interest.”
There are various nationalities, including Europeans who have had experience on offshore wind. “So, in this particular area, such expression had been made by such companies,” Lotilla said.
The DOE previously announced that an Executive Order will be issued by President Ferdinand Marcos Jr. primarily to streamline permitting processes for offshore wind projects, which is treated as a “new frontier” when it comes to RE capacity installations in the country.
Relative to the needed policy fine-tuning for this nascent sector, the department conveyed that it will be carrying out a “review and enhancement of the policies and guidelines governing the sub-sector.”
Lotilla, in particular, noted that “the refinements to the existing policies, framework and guidelines governing the administration of wind energy service contracts (WESCs) cover the technical, financial, operational and administrative risks and challenges of OSW development.”
He specified that “the existing OSW service contractors are still bound to comply with their obligations under their contracts.”
On that score, the DOE secretary asserted that the OSW service contract-holders “will have to continue to work on their commitments based on their approved work programs.”
