The new contracts involved five conversions from existing service contracts and agreements on geothermal and 17 on hydropower. Recently, the DOE awarded 87 renewable energy contracts to 18 companies for development of biomass, geothermal, solar, hydropower, ocean and wind energy resources.
The contracts were made pursuant to Republic Act 9513, otherwise known as Renewable Energy Act of 2008. "We are still in the process of completing the list of contracts. We’re looking at the same number if not more,” assistant secretary Mario Marasigan said.
After initially keeping its eye on potential wind power development, Korea East-West Power Co. Ltd. (EWP) is exploring to expand investment foray in the Philippines to prospective mini-hydro and liquefied natural gas (LNG) projects. As far as the wind projects are concerned, EWP is cornering majority equity of 45% in the corporate vehicle that will eventually bring the prospect wind farms to development. Another partner, Japan’s Eurus Energy will corner the other 45%, while local partner Alternergy assumes the minority stake.
But Mr. Lee credited Alternergy for steadfastly preparing the groundwork for such investment opportunity — that when proven for commercial development may yield 260 megawatts of renewable energy capacity for the country.
Alternergy was the one awarded by the Department of Energy (DOE) with six service contracts to conduct exclusive wind assessment/studies in areas such as Ilocos Norte, Cagayan, Mindoro, Rizal and Laguna.
Based on documents submitted to the agency, Alternergy’s wind farms will be located in Kalayaan, Laguna; Pilillia, Rizal; Aparri, Cagayan; Santa Ana, Cagayan; Pagudpod, Ilocos Norte; and Abra de Ilog, Occidental Mindoro. The facilities will entail investments of $14.1m each for a total of $84.6m. Two of the company’s proposed wind farms will carry a 40 MW capacity each while the capacities of the other four have yet to be determined.
The Energy department has already given Alternergy the green light to pursue the projects as part of more than $300m worth of wind service contracts the government approved recently. The government is banking on the development of indigenous renewable energy sources such as wind power to secure the country’s supply.
Energy Secretary Angelo Reyes earlier said that "studies by the US National Renewable Energy Laboratory shows that the Philippines has a total wind resource of 76 600 MW." Alternergy is a renewable energy firm headed by former Secretary Vince Perez. The company has investments in the 33-megawatt Bangui Bay wind farm in Ilocos, along with NorthWind Power Development Corp.
In September, Alternergy tied up with Eurus Energy Japan Corp. and Korea East West Power Co. (EWP) for a $100m investment to develop renewable energy projects in the Philippines. EWP is a subsidiary of Korea Electric Power Corp. (Kepco) while Eurus Energy Japan is a subsidiary of Eurus Energy Holdings Corp. of Japan. The latter is a joint venture between by Tokyo Electric Power Co. Inc. and Toyota Tsusho Corp.
20 wind turbines stand along a 6-mile strip on a beach in Bangui, to harness the strong winds from the South China Sea. The Northwind Bangui Bay Project, now provides 40 percent of the power needs in Ilocos Norte province of the Philippines via its connection to the national grid.
The project is an important step towards developing alternative sources of energy, especially with a growing clamor to reduce carbon emissions. The wind farm harnesses 33 megawatts of electricity without emitting greenhouse gases.
Its developers say a wind farm is economical because wind is not only renewable but free. Niels Jacobsen, President and CEO, Northwind Power Development Corp.: “We’re not using any fuel. Fuel is for free, while any other fossil fuel, power plant need to buy their coal, gas, or bangor or diesel, whatever. And that makes it in the long run, as we say, a feasible plant.”
The downside is that wind farms are not 100 percent reliable. The amount of electricity they generate depends on how the wind blows, and wind strength can vary from zero knots to storm force. Northwind earns from selling carbon credits through a mechanism provided by the Kyoto Protocol.
The Kyoto agreement allows projects based in developing countries to sell its emission offsets to a government or firm in an industrialized country.
Wind turbines are a clean source of energy, but wind farms encounter resistance in many countries because some consider them an eyesore. The growing number of tourists stopping to look at Bangui’s windmills has increased business opportunities in the area. Northwind is conducting wind studies at two more sites in the northern Philippines for possible wind farms.
New renewable energy projects composed the remainder of the contracts, which altogether are expected to generate a total of 4,042 MW of electricity, of which 1,257 MW accounts for additional electric power capacity. The projects entailed investments in the total amount of around PHP90.4 billion.
"Without rushing things we can make an announcement by next week, within the National Energy Consciousness Month,” Marasigan said. According to Marasigan, they are reviewing the contracts to improve them. He said the developers are asking the DOE to look at some provisions that may need some revisions.
Marasigan said the DOE is also seeing to it that the commitments that these renewable energy companies made will be implemented.