Philippines’ Department of Energy to advance wind power and other renewables

The DOE signed 68 mini-hydroelectric, 5 geothermal, and 17 wind energy contracts amounting to US$1 billion, the Department of Energy reported. For biomass projects, the DOE approved 22 service contracts amounting to about US$500 million.

The new contracts signed on hydropower, geothermal and wind turbines projects will generate about 2,000 megawatts of electricity, government reports indicate.

The DOE, through its Renewable Energy Management Bureau, signed the Renewable Energy Service Contracts (RESCs) in a follow up to the two signings held on Sept. 14, 2009 and Oct. 23, 2009 with seven contracts (US$983 million) and 87 contracts (US$2 billion) respectively.

With the passage of the RE bill in December 2008, the DOE expects to raise around US$9 billion to US$10 billion from renewable energy projects in the next 10 years. The DOE said this target will effective raise the RE sources capacity to 9,000 MW or double the existing 4,500 MW.

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. Jacobsen, however, says the U.S. $50 million investment could take years to yield significant profits.

Niels Jacobsen, President and CEO, Northwind Power Development Corp.: “It is a profitable venture. But it’s a long-term investment. It’s not where you get the returns after a year. It takes a long time for you to recover your investment.”

Wind turbines are a clean source of energy, but wind farms encounter resistance in many countries because some consider them an eyesore. Residents of Bangui have grown to like their towering neighbors.

Anthony Campanano, Town Official: "It takes some getting used to. If you look at it, there are modern structures built on the beach. But contrary to what we expected, a lot of people visit our place to look at the windmills." 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.

Perez-led Alternergy bags 6 wind power projects. Alternergy Philippines Holdings Corp. (APHC) has signed six service contracts with the Department of Energy (DOE) for its proposed wind projects worth an estimated $85 million.

With a $14.1-million project cost each, the wind power facilities will be put up in Pilillia, Rizal; Kalayaan, Laguna; Abra de Ilog, Occidental Mindoro; Sta.Ana, Cagayan: Sta Praxedes and Cagayan and Pagudpod, Ilocos; and Aparri, Cagayan.

Two of the wind farm projects will run on 40 megawatts (MW) capacity while the capacities of the other four have yet to be determined.

The wind power projects of APHC, headed by former Energy Secretary Vincent Perez, form part of the over $300 million worth of wind power service contracts that were signed by the DOE recently.

Perez is a staunch supporter of renewable energy use and actively participated in the passage of the law in Congress. After his stint in the Energy Department, Perez formed Alternergy, a renewable energy company for emerging Asia.

APHC aims to have strong presence in at least six countries in the Asia Pacific Rim in the next five years, with more than 500 megawatts in generating capacity from wind, small hydro, biomass, biogas, geothermal and solar resources.

APHC has investments on the 33-MW Bangui Bay wind farm in Ilocos with NorthWind Power Development Corp. Last year, APHC entered into a joint venture with Eurus Energy Japan Corp. and Korea East West Power Co. (EWP) to develop renewable energy projects in the Philippines. Both companies will invest a total of $100 million into the company.

EWP is a subsidiary of Korea Electric Power Corp. (Kepco) while Eurus Energy is a subsidiary of Eurus Energy Holdings Corp. of Japan which, in itself, is owned by Tokyo Electric Power Co., Inc. and Toyota Tsusho Corp. EWP has prior experience in energy generation as it owns six power plants in Korea generating 9,500 MW.

Eurus Energy Holdings, meanwhile, owns and operates wind and solar renewable energy power plants worldwide.