Eco-Business talks to wind energy developer Theo Sunico of Triconti ECC, which has entered the nascent Philippine wind energy market. Wind has the potential to fulfill growing consumer energy demand, but will policy stop growth stalling?
As the Philippines builds its offshore wind capability, its developers are turning to their Asian counterparts on which policies to push for and which to avoid to successfully drive the sector’s growth within the archipelago.
Triconti ECC, an alliance between Filipino, German and Swiss clean energy private sector experts, has been conducting pre-feasibility studies from the start awarded rights to construct wind farms off the coast of the Southeast Asian country in March 2020. Wind farms with a complete maximum capability of about 1.2 gigawatts (GW) are earmarked for development in Aparri Bay within the north of the country and the Guimaras Strait within the central Philippines.
Like its Asian neighbors: Taiwan, Vietnam, Japan, South Korea, India and China; The Philippines is using floating wind power – turbines attached to tethered floating structures – to fulfill growing energy demand and meet climate goals.
The country’s Department of Energy estimates that approx additional 43.7 GW of latest generation capability might be needed by 2040 – current peak demand estimated will amount to fifteen.6 GW. The government goals to realize 35% clean energy within the energy mix by 2030, with over 2 GW expected from the wind sector.
The Philippines is certainly one of eight global emerging markets that might speed up the event of floating wind projects with the potential to generate 160 GW in coastal areas inside 200 kilometers of its coast, study finds. report published by the World Bank in 2019
[Foreign] developers are curious about the Philippines because they need to realize synergies across the region over the following decade. We can reap the benefits of economies of scale by bringing these supply chains here to our country.
Theo Sunico, Vice President of Operations, Triconti ECC
Unlike other countries within the region, the Philippines still doesn’t have the chance to construct its own wind turbines, importing technology from European corporations.
“It’s actually to our advantage,” said Theo Sunico, vp of operations for Triconti ECC. “In Taiwan and other parts of Asia, they require developers to use some local equipment and services to build their projects. This drives up prices because suppliers are not yet prepared to meet all the demand.”
Such local content conditions in other parts of Asia have gotten an obstacle for developers, prompting them to maneuver more of their operations to the Philippines, which doesn’t have such requirements, Sunico told Eco-Business.
While the local industry doesn’t at all times wish to be depending on international developers, the transfer of skills should be gradual, said a Filipino wind energy developer.
A 2019 World Bank study shows that the Philippines, at 160 GW, has certainly one of the best floating wind potentials among the many emerging countries surveyed. Source: World Bank
Another advantage of importing technology is that the country doesn’t have to begin from scratch in attracting the identical international developers constructing wind farms off the coast of Taiwan, South Korea, Vietnam and Japan, he noted.
“Developers are interested in the Philippines because they want to achieve synergies across the region over the next decade. We can benefit from economies of scale by bringing these supply chains to our country,” he said.
He added that China is an “outlier” amongst Asian markets since it has such huge local demand that it doesn’t should worry about selling its offshore wind power abroad.
Unclear rules may hinder the event of offshore wind energy
While government announcements corresponding to a coal moratorium and a push for a 35% clean energy goal have encouraged the local clean energy industry, there remains to be no clear policy on the best way to achieve the country’s renewable energy goals, Sunico said.
“The governments of Taiwan, Vietnam, South Korea and Japan have been able to communicate very clear policy direction on how much renewable energy – including offshore wind – they want to produce each year over the next decade. This is something that developers are looking for, but the Philippines does not have it,” he said.
He cited a “political disconnect” amongst regulators, whereby energy developers were forced to bid on projects based on price somewhat than how a given clean energy technology might fit into the industry. As a result, imported fossil fuels proceed to prove more competitive because their inflationary costs are hidden within the bidding process.
However, wind industry players are hopeful that the primary renewable energy auction within the Philippines will happen starting in June. This is a competitive process for purchasing renewable energy supplies with an initial capability of two GW, called the Green Energy Auction program.
Sunico, nonetheless, said wind power developers remain concerned that this system will go to a different price-based tender, with cheaper technology corresponding to solar winning a lot of the contracts, with the chance that an excessive amount of of it should find yourself being built. one type of generation that does not actually meet demand.
He said local clean energy players like himself are fighting for a “technology-specific auction” that will allow each technology to compete with similar projects in order that the market rewards more efficient developers and costs are favorable to consumers.
“We have hope for the program, but we still do not have market mechanisms. We would like to see this happen, but we are not sure how it will be implemented. This is something that everyone in the renewable energy industry is following closely,” he said.
By Hannah Alcoseba Fernandezeco-business.com
