Philippines’ President Sets Country’s Offshore Wind Development In Motion

Authorities

April 27, 2023, by Adrijana Buljan

The Philippines’ President, Ferdinand R. Marcos Jr., issued Executive Order No. 21 on 19 April, directing the country’s Department of Energy to put together a policy and administrative framework for offshore wind development and to commence work related to grid development.

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63 Awarded Offshore Wind Service Contracts (and What These Contracts Entail)

The Department of Energy (DOE) says the Executive Order is expected to accelerate offshore wind development in the Philippines and contribute to reaching the country’s targets of 35 per cent of renewable energy in its energy generation mix by 2030 and 50 per cent by 2040. Currently, the Philippines has 22 per cent of renewables feeding electricity into its grid.

Under the Executive Order, the DOE has two months to formulate and issue a policy and administrative framework for the optimal development of the country’s offshore wind resources.

The framework will be made applicable to all permitting agencies which include, among others, the Department of Environment and Natural Resources, the Biodiversity Management Bureau, the Department of Trade and Industry, the Philippine Coast Guard, and the Energy Regulatory Commission.

The permitting agencies are instructed to submit a complete list of relevant permits required by each agency to the DOE, also within 60 days from when the Order was issued.

The Department of the Interior and Local Government (DILG) will also submit a complete list of appropriate permits required by local government units. The DILG will then share the standard list of permits for offshore wind development activities with local governments 15 days from the confirmation by the DOE that the list is complete and suitable for integration into the country’s Energy Virtual One-Stop Shop (EVOSS) platform.

After the DOE receives the lists, the agency will review them and decide whether to initiate the full integration of the applicable permits into the EVOSS platform or require a permitting agency to remediate or supplement a deficient or incomplete submission.

The Philippines’ EVOSS platform is a web-based monitoring system for energy applications and a repository of project-related information which allows a coordinated submission and synchronous processing of all required data and information, and provides a single decision-making portal for actions on applications for permits or certifications.

The Department of Energy said the Executive Order would provide clarity and streamline permitting processes and offshore wind leasing fees under a whole-of-government approach and fully implement the EVOSS System to cover all relevant government agencies and bureaus.

“With heightened investor interest in energy projects. especially in renewable energy, it is crucial to have a clear framework that would speed up the development of OSW and speed up approvals of necessary permits. We will work together with the concerned government agencies. local government units, and the transmission concessionaire to implement the President’s directive”, Energy Secretary Raphael P.M. Lotilla said.

63 Awarded Offshore Wind Service Contracts (and What These Contracts Entail)

In a press release issued on 23 April, the DOE said that it had awarded 63 offshore wind contracts so far, with a total potential capacity of 49.928 GW, which is enough to supply the country’s future electricity demand.

This is an increase of almost 8 GW from 30 March, when the DOE said there were 57 Offshore Wind (OSW) Service Contracts (SCs) with a total potential capacity of about 42 GW awarded to that date.

The information from last month was shared as the DOE announced the agency signed three 25-year Offshore Wind Service Contracts with Copenhagen Infrastructure Partners (CIP), through its New Markets Fund, for three offshore wind farms totalling 2 GW in capacity.

Prior to CIP, these agreements were also signed with PetroGreen Energy Corporation and wpd Philippines, among others.

The Service Contracts in the Philippines are the basis for securing other necessary permits and authorisations, and are signed for a period of 25 years, with an option to extend them for another 25 years.

The service agreements relate to two stages of a project’s development and operation.

The first five-year stage is pre-development and involves feasibility studies and securing all necessary permits, licenses, and authorisations, as well as other work leading up to a final investment decision (FID) and a declaration of commercialism (DOC).

The second stage concerns project development and goes into effect once a developer submits a DOC to the Department of Energy after completing the first stage. Once the DOC is approved by the DOE, a Service Contract remains in force for the rest of the 25-year period and a developer can start the development, construction, and commercial operation of an offshore wind farm.

According to the World Bank’s The Philippines Offshore Wind Roadmap, the Service Contracts grant developers exclusive rights to explore, develop and utilise offshore wind resources over a specific contract area, including access to lands, offshore areas, and seabed, identified by the developer.

“The WESC, by itself, is sufficient legal right to the developer. Under existing DOE guidelines, there is no separate agreement or permit required for the lease of OSW areas approved by the DOE under
the WESC”, the roadmap’s chapter on leasing and permitting reads.

The roadmap estimates the Philippines’ total technical offshore wind potential at 178 GW, with most of that capacity being in areas that are most suitable for floating wind technology.

“Large areas around the country’s coast have technically extractable wind resources. Around 90 percent of the resource is found in waters deeper than 50 meters, which will require the use of floating offshore wind turbines”, World Bank states in the roadmap document.

In November 2022, the Philippines’ DOE Secretary Raphael P.M. Lotilla said that, in addition to addressing the country’s energy needs, electricity generated by offshore wind farms could be used to produce alternative fuels such as green hydrogen, which then may be converted into ammonia.