Alternergy Holdings Corp.’s wholly-owned subsidiary Pililla AVC Corp. and Shell Overseas Investment B.V. said Tuesday they formed a partnership to explore the vast offshore wind potential in the Philippines.
The Alternergy and Shell venture obtained a wind energy service contract from the Department of Energy to assess the feasibility of an offshore wind project in the windswept Calavite Passage near Mindoro.
The Calavite area has a potential of 5 gigawatts of wind power. Alternergy and Shell’s service contract has a potential capacity of 1 gigawatt.
The development of offshore wind requires investments of about $5 million per megawatt, based on the DOE estimates.
“This is a partnership of combined competencies and experiences towards the goal of boosting the Philippines’ renewable energy target,” Alternergy chairman and former Energy Secretary Vince Pérez said.
He said the Philippines’ offshore wind industry is promising and still at its nascent stage.
The World Bank estimates that robust development of offshore wind could add 20 GW of installed capacity by 2040, accounting for 14 percent of the Philippines electricity needs and some $14 billion of value added to the economy.
“Shell, as our strategic partner with 50 years of deep water offshore and over 20 years of offshore wind development experience, will bring in its global track record, supply chain access, and technical expertise in developing large scale bottom-fixed and floating offshore wind projects,” Perez said.
He said Alternergy was looking forward to working with Shell and jointly shape, with stakeholders, the policies for sustainable offshore wind industry in the country.
“The Philippines is moving towards a low-carbon future and offshore wind is well positioned to support this energy transition. As Shell has powered progress for the Philippines for over 100 years, we will continue to support the country by providing more and cleaner energy solutions to meet the needs of our consumers today and in the decades to come,” said Shell companies in the Philippines country chair Lorelie Osial.
Aside from the Calavite Passage Wind Power Project, Alternergy and Shell are looking at other offshore wind sites for possible development.
The partnership is an opportunity to provide integrated value to customers through power generation as well as exploring synergies with retail electricity supplier Shell Energy Philippines Inc. and Green Energy Supply Solutions Inc.
Energy Secretary Raphael Lotilla thanked the local companies and their foreign partners for taking bold action in committing to deliver clean energy to the Filipino people.
“Harnessing the power potential of offshore wind resources requires intensive capital cost and highly skilled manpower resource, thus partnerships are a key strategy. These will not only expedite the development process but will also help in facilitating operational knowledge transfer and providing access to technologies as well as unlock job opportunities for our people,” Lotilla said.
He said the government is undertaking a review and enhancement of the policies and guidelines to ensure the efficient and optimal development of OSW projects.
“I am optimistic that with the recent amendment of the implementing rules and regulations of the Renewable Energy Act of 2008, more foreign investors will come in to partner with our local companies,” Lotilla said.