Philippines needs $50 billion for offshore wind projects

MANILA, Philippines — The Philippines needs $50 billion to install as much as 21 gigawatts (GW) of offshore wind projects by 2040, based on the new roadmap released by Department of Energy (DOE) and the World Bank Group (WBG) yesterday.

The Philippines Offshore Wind Roadmap charts out the potential for developing a robust offshore wind industry in the Philippines in two potential scenarios.

The low growth scenario provides a roadmap for installing offshore wind at levels in line with the DOE’s national renewable energy program (NREP), and the high growth scenario provides a roadmap for installing much higher levels that could be sufficient to drive competition, investments and more cost reduction.

In the low growth scenario, the roadmap details that the Philippines has the potential to install three GW of offshore wind by 2040, which would make up three percent of the country’s electricity supply. This capacity requires a capital expenditure of about $7.5 billion.

For the high growth scenario, the country has the potential to install 21 GW by 2040, accounting for 21 percent of its total electricity supply and requiring a massive $50-billion capex to realize.

By 2050, the Philippines can have as much as 40 GW of offshore wind installations, which could make up 45 percent of the country’s electricity supply, DOE undersecretary Felix William Fuentebella said during the launch yesterday.

“This could help offset fossil fuel generation by 42 percent by 2040, helping our country to accelerate decarbonization and achieve greater energy security and independence,” he said.

“This amount of offshore wind energy would also bring our country significant benefits, adding $30 billion in cumulative benefit to the local economy,” Fuentebella said.

In total, the country has a potential of developing 178 GW of technical offshore wind projects, WB Energy Practice Manager for East Asia and Pacific Region Jie Tang said.

“Our analysis of the high growth scenario suggests that offshore wind power could create thousands of jobs by 2040, as well as provide billions in local gross value added to the economy in the Philippines,” he said.

The roadmap identified six potential development zone for OSW, namely northwest Luzon with two to five GW, Manila area with up to three GW, northern Mindoro with three to 10 GW, southern Mindoro with 20 to 36 GW, Guimaras Strait with up to one GW, and Negros/Panay area with two to three GW.

“The Philippines has a rapidly growing demand for power. It is clear from this roadmap that offshore wind can play a major role in meeting our country’s energy demand indigenously, while also accelerating decarbonization,” DOE Secretary Alfonso Cusi said.

To achieve these scenarios, the roadmap provides guidance on actions that must be taken by the government, putting in place a long-term plan for offshore wind until 2050 as part of a decarbonized energy mix; establishing offshore wind development zones through further marine spatial planning; investment in transmission, port and other energy infrastructure upgrades; increasing collaboration with industry and other relevant government agencies; among others.

“While there may be challenges along the way, continuing forward with this collaboration and dialogue between the DOE and all stakeholders, and setting a long-term vision for industry growth will help overcome these challenges and deliver significant benefits to the country for decades to come,” WBG Offshore Wind Development Program co-lead Mark Leybourne said.

Fuentebella said the DOE has already received numerous interest and applications in offshore wind from the private sector.

To support and help translate these applications into actual projects, the DOE is looking to do a high-level technical study on a representative offshore wind project that could be delivered before 2030.

“It describes all of the main activities that a developer will need to undertake to develop and construct a project and more importantly, how these actions relate to government actions and the roadmap’s recommendations,” Fuentebella said.

“It highlights the priority actions and need for these to be completed to enable the project development to proceed as planned. This study will be important to help pave the way and set best practices to accelerate the development and construction of offshore wind projects in the Philippines,” the DOE undersecretary said.

The roadmap allows the Philippines to take its first step towards building an offshore wind industry and contribute to national energy security and the global efforts to mitigate climate change, said Ndiamé Diop, World Bank country director for Brunei, Malaysia, Philippine and Thailand.

“The Philippines’ waters have conditions that are well-suited to offshore wind. This abundant, indigenous energy resource offers an opportunity for the Philippines to boost energy security, reduce greenhouse gas emissions, and increase renewable energy supply,” he said.

This roadmap is one of a series of offshore wind roadmap studies commissioned by the WBG under the joint Energy Sector Management Assistance Program-International Finance Corporation (ESMAP-IFC) Offshore Wind Development Program.

It has been prepared with the consultation of more than 150 stakeholders from a wide range of public and private representatives from across the global offshore wind industry.