Wind power in Philippines – Trans-Asia pursues wind farm project

Based on studies conducted by the US National Renewable Energy Laboratory and the Department of Energy, the country has vast renewable energy potential, including 76,000 MW of wind capacity and 170,000 MW of ocean energy capacity.

This potential capacity exceeds the projected 4,350 MW in additional capacity that the country would need in the next six years.

Wind is one of the energy resources that will benefit from the passage of the Renewable Energy Bill, which has been pending in its various forms for almost two decades now.

It almost became a law in the 13th Congress, having passed at third reading at the House of Representatives. Although certified “urgent” by Malacañang in February last year, it only reached committee level approval at the Senate. Now in the 14th Congress, 18 versions of the bill had been filed. The Legislative-Executive Development Advisory Council again listed the RE Bill as one of the 28 priority bills for this Congress.

The Philippines is going full speed ahead with a minimum of six wind power projects in 2009. The best wind sources in the country have been identified as Babuyan Island, Mindoro, Leyte, Batanes, Ilocos Norte, Samur, Negros, Panay, Palawan, and Cebu. The country is looking at approximately 200 MW of energy from wind power projects spread across the nation.

According to the World Wide Fund, a survey of the country has indicated a possible 7,404 MW of wind energy possible through 1,038 various sites that were surveyed. The Department of Energy (DOE) has at least three companies who are interested in installing wind power facilities. The three companies are Northern Luzon UPC Asia Corporation, Energy Development Corporation, and Constellation Energy Corporation.

Energy Development Corporation (EDC) already has an application pending with the Government of the Philippines to establish wind energy resources in Ilocos Norte, Nasurot, and Pagudpud. Another firm is studying the potential to establish a 140 MW wind power station in Illocos Norte as well.

UPC Asia has intentions of developing two locations in Pagudpud and Ilocos Norte, with one being capable of producing 100 MW of energy. UPC Asia is part of the highly successful UPC Group, which has installed more than 650 MW of wind turbines on the island of Sardinia and in southern Italy. UPC Group is a conglomerate in Europe.

Constellation Energy Corporation is a U.S.-based firm that is interested in projects in Negros, Bayawan, and Tanjay. Constellation Energy Corporation is also a highly successful and profitable corporation with interests in all types of renewable energy sources.

According to Trans-Asia president and chief executive Francisco L. Viray, it may take at least three months to finish the planned feasibility studies, after which they plan to apply for a service contract for the project by end-2009.

Viray said in an interview that the company planned to infuse an initial $20 million for its wind farm project to cover the development of an initial 8 megawatts in wind power capacity. As a rule of thumb, the company needed to spend as much as $2.5 million per megawatt for the wind farm project, he added.

Viray disclosed that they plan to scale up the capacity to its full potential as soon as the Energy Regulatory Commission approves the feed-in tariff mechanism for renewable energy. “We want to wait for the rules on feed-in tariff because we don’t want to risk the regulatory aspect of the wind project,” he explained.

The feed-in tariff is a regulated incentive structure which typically pays a premium for electricity generated from renewable energy sources and has been successfully used in Europe to accelerate the development and use of renewable energy. It also serves as an assurance to potential investors of a stable pricing mechanism.

Ideally, the feed-in tariff system should be developed within six months after the signing of the implementing rules and regulations governing the Renewable Energy Act of 2008.

Trans-Asia Oil and Energy Development Corp. is exploring 37 potential sites to build wind farms in the Philippines. Some of the areas include parts of Cagayan province, Panay Island and the Bicol region.

The Philippines intends to double its renewable energy (RE) capacity in 10 years after the government approved rules covering the implementation of the Renewable Energy Act (Republic Act 9513).

In a decade, Manila intends to produce 9,000 megawatts of power, twice its current levels, Department of Energy Secretary Angelo T. Reyes said.

The country resource is estimated to produce some 4,531 MW from geothermal energy; 13,097 MW from hydropower, 5.1 kilowatt hours per square meter a day from solar, 76,600 MW from wind, and 170,000 MW from oceanic waves.

The agency is currently examining 15 projects, mostly undertaken by local groups with foreign partners, DOE director Mario Marasigan said. The projects cover wind, hydro, biomass, solar, and ocean projects, he added.

Besides state-owned PNOC-Renewables Corp., companies interested in renewable energy projects include Lopez-led First Gen Corp., Aboitiz Power Corp., Trans-Asia Power, Energy Development Corp., Suweco, Constellation Corp., Oriental Energy, Green Power Philippines, Deep Ocean Philippines, Norasian Corp., and Philcarbon.

Philippine Department of Energy Director, Mario Marasigan, said that there are already 6 Wind Farm Projects in the Philippines in Development. Total investment in these projects would reach about $1B with 1 MW of power costing about $2.5 Million to harvest.

The Six Projects Are :
-PNOC-Energy Development Corp. (PNOC-EDC) 140 megawatt in Ilocos.
-UPC Asia (100 MW)
-Energy Logics (40-60 MW)
-A Spanish firm in Burgos province (10-15 MW)
Aklan project (10-15 MW)
Bulalacao project (40 MW)

Last year, the DOE was offering 16 sites in the Philippines to investors which were ideal locations for windfarms. These locations were: Carmen and Oslob in Cebu; Bago City and Cauayan in Negros Occidental; Allen-Lavesares and Calbayog City in Northern Samar; Siquijor; Pasuquin, Ilocos Norte; Bantay, Ilocos Sur; Bani and Bolinao in Pangasinan; Maconacon, Isabela; Tagaytay, Cavite; San Andres, Quezon; and Mercedes and Daet in Camarines Norte.

The DOE has often said that one of the hurdles faced in getting investors to invest in the wind power generating sector is the slow passage of the Philippine Renewable Energy Bill (RE) which is languishing in the Philippine Congress.

RE will give incentives to investors and will also allow the shortened documentation and processing of RE projects through creation of a one-stop-shop.

According to a study conducted by the US Dept of Energy, the Philippines has a 76,000 MW wind potential capacity in an area of 11,000 sq. km.

Amid continued volatility in world crude oil prices, the Philippine government has identified wind-based power as one of the alternative sources of energy it can tap and hopes to duplicate the Bangui project in other parts of the country.

The Bangui wind farm, which cost 50 million dollars to build, became operational in June 2005. It was the first large-scale wind power plant in the Philippines and South-East Asia. The windmills were built by Northwind Power Development Corporaton, a private firm headed by a Danish engineer, with the help of a 30-million-dollar soft loan and 10-million-dollar grant from the Danish International Development Agency.

According to Northwind, the wind farm supplies up to 40 per cent of the electricity requirement of Ilocos Norte. It also sells the supply to the Ilocos Norte Electric Cooperative at a discounted rate. Since the turbines harness the natural force of the wind to produce electricity, they do so without emitting greenhouse gases.

Due to the wind farm’s clean energy system, Northwind has earned carbon credits that it plans to sell to the World Bank, which manages a carbon credit fund as part of the Kyoto Protocol to reduce greenhouse gases.

The country’s top geothermal energy producer, the Philippine National Oil Company-Energy Development Corporation, will invest 75 million dollars for the Burgos windmill project.

The department said its goal is to install wind-based power projects with a capacity of at least 417 megawatts in the next 10 years as part of efforts to reduce the country’s dependence on imported fuel and boost self-suffiency.

Energy Secretary Raphael Lotilla said the Bangui wind farm has proven the viability of these wind power projects, adding, ‘I hope that the commercial operations of the Bangui wind farm will usher in new developments in our wind resources.’