Out-Law News 1 min. read

Philippines awards offshore wind contracts for potential 50GW capacity

The Philippines to date has awarded 63 offshore wind contracts with potential capacity of 50 gigawatts (GW) - enough to supply its full electricity demand in future, according to a Xinhua report. 

Last month, the Philippines’ president signed an executive order directing the Department of Energy (DOE) to set up a policy and administrative framework within 60 days to speed up the issuance of offshore wind related permits, licenses and clearances. By doing this, the DOE wants the country to reach its target of 35% and 50% renewable energy contribution to the energy generation mix by 2030 and 2040 respectively.

The framework will be made applicable to all permitting agencies including the Department of Environment and Natural Resources, which is currently in the process of issuing its own regulatory framework for approval of offshore wind projects; the Biodiversity Management Bureau; the Department of Trade and Industry; the Philippine Coast Guard; and the Energy Regulatory Commission.

According to the order, all permitting agencies will need to submit to the DOE a complete list of permits by relevant permitting agencies, including all requirements, fees, and procedures for issuing these.

The DOE had earlier this year released a draft circular updating the contracting process of awarding offshore wind energy service contracts. The public consultation period was completed at the end of February.

Philippines energy secretary Raphael P.M. Lotilla said that with increased investor interest in energy projects, particularly renewable energy projects, it is vital that a clear framework is in place to accelerate the development of offshore wind and expedite the necessary permit approvals, according to a local report.

In April 2022, the Philippines government and the World Bank Group published the Offshore Wind Roadmap (330-page/8MB PDF), which said that the country’s total technical potential offshore wind resources is estimated at 178GW. However, it said that around 90% of the resource is found in waters deeper than 50 metres, which will require the use of floating offshore wind turbines. The World Bank Group projected two development scenarios: offshore wind reaching around 3GW by 2040 based on a low growth scenario; and offshore wind reaching over 20GW by 2040 based on a high growth scenario.

Renewables expert James Harris of Pinsent Masons MPillay, the Singapore joint law venture between MPillay and Pinsent Masons, said: “The Philippines has a comparatively high wind energy potential compared to other countries in South East Asia but is prone to severe typhoons and the World Bank has noted this means it is likely that typhoon class wind turbines will be needed in many locations, and that extreme wind speeds may make development in the North and East of the country too expensive and high risk.”

“The above developments follow the removal by the Philippines of its foreign ownership restrictions for renewable energy projects in November 2022, which has subsequently seen increased interest from foreign investors into the sector,” Harris said.

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