Philippine Offshore Wind Initiatives Gain Momentum With President’s “Whole of Society, Whole of Gov’t Approach”

In a significant move to accelerate offshore wind (OSW) projects, Philippine President Ferdinand Marcos Jr. issued Executive Order No. 21 on April 19, 2023. Titled “Executive Order on the Development of Offshore Wind Projects in the Philippines,” it outlines a comprehensive approach to the development of offshore wind energy, emphasizing collaboration between government agencies and the private sector.

From the time that the EO was signed until today, the EO has made significant head way not only in the promotion of offshore wind projects, but also seeing momentum in the wind energy space with significant advances from private companies like BlueFloat Energy, Copenhagen Infrastructure Partners (CIP), Corio, Iberdola, GigaWind, SeaWind, Shell, and WindKraft entering the Philippine market either with partnerships or alone to harness some of the initial 22 GW total wind energy resource allocation which can be farmed along the Philippine archipelago.

European developers already have very strong experience and technical expertise in offshore wind. Spanish developer BlueFloat is top of the table with a 7.6 GW, four-project cluster in planning.

The Philippines has an estimated 178 GW of offshore wind resources, according to a World Bank study. The country is poised to harness clean energy for its growing needs, with offshore wind power leading the long term solution as it also offers the potential for producing alternative fuels like green hydrogen, driving further innovation in the country’s energy landscape.

Order Hastens Allocation

In just a span of five months since EO 21 was issued, the number of offshore wind energy service contracts (WESC) awarded to qualified investors went from 38 to 78. The biggest growth in terms of gigawatts and allocation happened between August to October when the number of rose from 63 to 78 contracts with a total of 61.6 GW.

The DoE reported that in August some 63 projects were allocated with a total of 50 GW. In September, Energy Assistant Secretary Mylene C. Capongcol said at the Energy Smart Forum organized by the European Chamber of Commerce of the Philippines that OSW projects “reached 77 with a potential capacity of 60 gigawatts.”

Just last week, that power potential rose to 61.6 GW with 78 projects in the turbine.

The recent announcements by the DOE prove the efficacy of EO 21 and signifies significant progress as the issuance of these service contracts lay the groundwork for acquiring the necessary permits and authorizations, with a useful life of up to a total 50 years — the first 25 years part of the contract, with the possibility of an additional 25-year extension.

Task Distribution

These offshore wind service contracts encompass two key stages: pre-development, which involves feasibility studies and permitting, and project development, initiated after the Department of Energy approves a declaration of commercialism. These agreements grant developers exclusive rights to explore, develop, and utilize offshore wind resources in specified areas.

The order initially tasked the Department of Energy (DOE) with creating a Policy and Administrative Framework within 60 days of issuance. This framework aims to simplify permitting processes and offshore wind leasing fees, utilizing the Energy Virtual One-Stop Shop (EVOSS) System to coordinate with relevant government agencies and bureaus.

Moreover, the executive order mandates all permitting agencies to provide the DOE with a complete list of required permits, including fees and procedures, within 60 days. This proactive approach seeks to identify and resolve potential bottlenecks in the permitting process.

Additionally, the order directs the DOE to coordinate with the National Grid Corporation of the Philippines (NGCP) and the National Transmission Corporation (TRANSCO) to ensure timely grid interconnection for OSW projects. This collaborative effort includes support from national government agencies, government-owned or -controlled corporations (GOCCs), and local government units (LGUs).

The “whole-of-government” approach is vital for the successful development of OSW projects in the Philippines, considering the complexities involved. These projects have the potential to address the country’s growing energy needs and reduce reliance on fossil fuels, with an estimated offshore wind total potential of 178 gigawatts (GW).

Developing just 10 GW could result in substantial job creation and over $1 billion in annual investments, as per the World Bank.

Parallel Work

In parallel, the Philippine Department of Environment and Natural Resources (DENR) is collaborating with the DOE to integrate offshore wind and floating solar guidelines into the National Expenditure Program (NEP) for the upcoming year. This move aligns with the country’s commitment to transition toward renewable energy sources.

The DENR’s convergence budgeting, supported by climate tagging, facilitates collaboration among government departments and agencies to drive climate change adaptation and mitigation projects. As the DENR takes on a more significant role in the Climate Change Commission (CCC), it is poised to present the National Adaptation Plan during the 2024 budget deliberations.

Proactive Measures

With these proactive measures and the increased interest from investors in renewable energy projects, the Philippines is positioning itself to unlock its offshore wind potential and make substantial strides towards a greener energy future.

The Executive Order and related initiatives are integral to achieving the country’s renewable energy goals, which include a target of 35% renewable energy in the energy generation mix by 2030 and 50% by 2040. Currently, renewables account for 22% of the Philippines’ electricity supply.