Can the Philippines kickstart offshore wind?

Made up of 7,641 islands, the Philippines must contend with its topography if it is to move to a green electricity system.

Robert Malthouse
April 14, 2022
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This content is from our archive. Some formatting or links may be broken.
Can the Philippines kickstart offshore wind?

Made up of 7,641 islands, the Philippines must contend with its topography if it is to move to a green electricity system.

But it has huge potential: its coastlines measure 36,289km and the World Bank says it could host 178GW of offshore wind. Of this, floating wind would be the main driver, accounting for 160GW of the southeast Asian country’s potential. Fixed-foundation projects represent 18GW.

So how close is it to getting started?

On Wednesday 20th April, the country’s Department of Energy (DoE) is set to publish the results of a key study into its offshore wind potential.

The DoE commissioned the World Bank Group and BVG Associates in June 2021 to develop the nation’s first offshore wind roadmap, which would share advice on how to set short- and long-term goals, formulate strategies, and propose supportive government policies.

Moving to offshore wind is unlikely to be a straightforward shift.

The Philippines electricity system is made up of three grids -- Luzon, Mindanao and Visayas -- with most bulk generation based far from most energy-intensive areas. Most of its electricity generation comes from coal (47.5%), other fossil fuels (18%) and gas (10.5%), with under one quarter (24%) from hydro and other renewables.

Making the move will be all the more difficult given the country’s susceptibility to extreme weather, rising sea levels, and damage wrought on its agricultural systems by climate change. In 2019, think tank the Institute for Economics & Peace ranked it the most vulnerable country globally to climate change.

This lends tremendous urgency to the country’s green plans, and why it is set to follow nearby Taiwan and South Korea to establish its offshore market.

Decarbonisation desires

The Philippines gains around four-fifths of its electricity from imported fossil fuels, making power prices some of the highest in southeast Asia. With a rapidly-growing population of now over 111million people, combined with high economic growth, energy demand is rising fast. This could further raise prices.

Shifting away from coal, which is responsible for around 60% of the country’s power outages, will be crucial to reaching its target for renewables to make up 35% of its power mix by 2030, rising to 50% by 2040.

Demand for offshore wind in the Philippines has been strong despite the lack of a roadmap. The DoE has already awarded multiple 25-year offshore wind development contracts totalling 5GW as an appetiser for international players.

Spanish utility Iberdrola, in partnership with domestic developer Triconti and Swiss investor Stream Invest Holding, secured the rights to 3.5GW across five projects in January. The company said it would be using fixed foundations.

Southeast Asian developer The Blue Circle and Philippines independent power producer CleanTech Global Renewables also secured a contract for a 1.2GW project in January. They said it would consist of fixed and floating turbines.

And the DoE says it has received further applications and letters of intent for 12GW of offshore wind projects, which shows strong industry demand.

Favourable wind resources and the proximity to transmission grids and demand centres mean the northern and central parts of the Philippines would be well-positioned for offshore wind deployment.

Areas including northwest Luzon and the north and south of the island Mindoro have been identified as key areas for floating wind with strong wind speeds and deeper waters. The Guimaras Strait and the Manila area are shallow enough for fixed foundation projects.

Upcoming challenges

But the country faces hurdles to reach its potential, beyond the environmental issues we identified earlier.

Like many countries, its permitting processes are complex. A wind project’s pre-development stage in the Philippines typically lasts up to five years. This is costly and could prove to be a disincentive for developers to invest heavily in the market.

The government’s preferred off-take structures are also unclear, whether that is power purchase agreements or feed-in-tariffs (FiTs). While the Philippines does support renewables projects with FiTs, its use of them is declining.

And finally, there’s the supply chain, or lack of it. There is no domestic turbine manufacturing industry in the Philippines, but that does not need to be a major obstacle given the growth of offshore wind in some of its neighbours.

None of this is insurmountable and the potential is great.

Made up of 7,641 islands, the Philippines must contend with its topography if it is to move to a green electricity system.

But it has huge potential: its coastlines measure 36,289km and the World Bank says it could host 178GW of offshore wind. Of this, floating wind would be the main driver, accounting for 160GW of the southeast Asian country’s potential. Fixed-foundation projects represent 18GW.

So how close is it to getting started?

On Wednesday 20th April, the country’s Department of Energy (DoE) is set to publish the results of a key study into its offshore wind potential.

The DoE commissioned the World Bank Group and BVG Associates in June 2021 to develop the nation’s first offshore wind roadmap, which would share advice on how to set short- and long-term goals, formulate strategies, and propose supportive government policies.

Moving to offshore wind is unlikely to be a straightforward shift.

The Philippines electricity system is made up of three grids -- Luzon, Mindanao and Visayas -- with most bulk generation based far from most energy-intensive areas. Most of its electricity generation comes from coal (47.5%), other fossil fuels (18%) and gas (10.5%), with under one quarter (24%) from hydro and other renewables.

Making the move will be all the more difficult given the country’s susceptibility to extreme weather, rising sea levels, and damage wrought on its agricultural systems by climate change. In 2019, think tank the Institute for Economics & Peace ranked it the most vulnerable country globally to climate change.

This lends tremendous urgency to the country’s green plans, and why it is set to follow nearby Taiwan and South Korea to establish its offshore market.

Decarbonisation desires

The Philippines gains around four-fifths of its electricity from imported fossil fuels, making power prices some of the highest in southeast Asia. With a rapidly-growing population of now over 111million people, combined with high economic growth, energy demand is rising fast. This could further raise prices.

Shifting away from coal, which is responsible for around 60% of the country’s power outages, will be crucial to reaching its target for renewables to make up 35% of its power mix by 2030, rising to 50% by 2040.

Demand for offshore wind in the Philippines has been strong despite the lack of a roadmap. The DoE has already awarded multiple 25-year offshore wind development contracts totalling 5GW as an appetiser for international players.

Spanish utility Iberdrola, in partnership with domestic developer Triconti and Swiss investor Stream Invest Holding, secured the rights to 3.5GW across five projects in January. The company said it would be using fixed foundations.

Southeast Asian developer The Blue Circle and Philippines independent power producer CleanTech Global Renewables also secured a contract for a 1.2GW project in January. They said it would consist of fixed and floating turbines.

And the DoE says it has received further applications and letters of intent for 12GW of offshore wind projects, which shows strong industry demand.

Favourable wind resources and the proximity to transmission grids and demand centres mean the northern and central parts of the Philippines would be well-positioned for offshore wind deployment.

Areas including northwest Luzon and the north and south of the island Mindoro have been identified as key areas for floating wind with strong wind speeds and deeper waters. The Guimaras Strait and the Manila area are shallow enough for fixed foundation projects.

Upcoming challenges

But the country faces hurdles to reach its potential, beyond the environmental issues we identified earlier.

Like many countries, its permitting processes are complex. A wind project’s pre-development stage in the Philippines typically lasts up to five years. This is costly and could prove to be a disincentive for developers to invest heavily in the market.

The government’s preferred off-take structures are also unclear, whether that is power purchase agreements or feed-in-tariffs (FiTs). While the Philippines does support renewables projects with FiTs, its use of them is declining.

And finally, there’s the supply chain, or lack of it. There is no domestic turbine manufacturing industry in the Philippines, but that does not need to be a major obstacle given the growth of offshore wind in some of its neighbours.

None of this is insurmountable and the potential is great.

Made up of 7,641 islands, the Philippines must contend with its topography if it is to move to a green electricity system.

But it has huge potential: its coastlines measure 36,289km and the World Bank says it could host 178GW of offshore wind. Of this, floating wind would be the main driver, accounting for 160GW of the southeast Asian country’s potential. Fixed-foundation projects represent 18GW.

So how close is it to getting started?

On Wednesday 20th April, the country’s Department of Energy (DoE) is set to publish the results of a key study into its offshore wind potential.

The DoE commissioned the World Bank Group and BVG Associates in June 2021 to develop the nation’s first offshore wind roadmap, which would share advice on how to set short- and long-term goals, formulate strategies, and propose supportive government policies.

Moving to offshore wind is unlikely to be a straightforward shift.

The Philippines electricity system is made up of three grids -- Luzon, Mindanao and Visayas -- with most bulk generation based far from most energy-intensive areas. Most of its electricity generation comes from coal (47.5%), other fossil fuels (18%) and gas (10.5%), with under one quarter (24%) from hydro and other renewables.

Making the move will be all the more difficult given the country’s susceptibility to extreme weather, rising sea levels, and damage wrought on its agricultural systems by climate change. In 2019, think tank the Institute for Economics & Peace ranked it the most vulnerable country globally to climate change.

This lends tremendous urgency to the country’s green plans, and why it is set to follow nearby Taiwan and South Korea to establish its offshore market.

Decarbonisation desires

The Philippines gains around four-fifths of its electricity from imported fossil fuels, making power prices some of the highest in southeast Asia. With a rapidly-growing population of now over 111million people, combined with high economic growth, energy demand is rising fast. This could further raise prices.

Shifting away from coal, which is responsible for around 60% of the country’s power outages, will be crucial to reaching its target for renewables to make up 35% of its power mix by 2030, rising to 50% by 2040.

Demand for offshore wind in the Philippines has been strong despite the lack of a roadmap. The DoE has already awarded multiple 25-year offshore wind development contracts totalling 5GW as an appetiser for international players.

Spanish utility Iberdrola, in partnership with domestic developer Triconti and Swiss investor Stream Invest Holding, secured the rights to 3.5GW across five projects in January. The company said it would be using fixed foundations.

Southeast Asian developer The Blue Circle and Philippines independent power producer CleanTech Global Renewables also secured a contract for a 1.2GW project in January. They said it would consist of fixed and floating turbines.

And the DoE says it has received further applications and letters of intent for 12GW of offshore wind projects, which shows strong industry demand.

Favourable wind resources and the proximity to transmission grids and demand centres mean the northern and central parts of the Philippines would be well-positioned for offshore wind deployment.

Areas including northwest Luzon and the north and south of the island Mindoro have been identified as key areas for floating wind with strong wind speeds and deeper waters. The Guimaras Strait and the Manila area are shallow enough for fixed foundation projects.

Upcoming challenges

But the country faces hurdles to reach its potential, beyond the environmental issues we identified earlier.

Like many countries, its permitting processes are complex. A wind project’s pre-development stage in the Philippines typically lasts up to five years. This is costly and could prove to be a disincentive for developers to invest heavily in the market.

The government’s preferred off-take structures are also unclear, whether that is power purchase agreements or feed-in-tariffs (FiTs). While the Philippines does support renewables projects with FiTs, its use of them is declining.

And finally, there’s the supply chain, or lack of it. There is no domestic turbine manufacturing industry in the Philippines, but that does not need to be a major obstacle given the growth of offshore wind in some of its neighbours.

None of this is insurmountable and the potential is great.

Made up of 7,641 islands, the Philippines must contend with its topography if it is to move to a green electricity system.

But it has huge potential: its coastlines measure 36,289km and the World Bank says it could host 178GW of offshore wind. Of this, floating wind would be the main driver, accounting for 160GW of the southeast Asian country’s potential. Fixed-foundation projects represent 18GW.

So how close is it to getting started?

On Wednesday 20th April, the country’s Department of Energy (DoE) is set to publish the results of a key study into its offshore wind potential.

The DoE commissioned the World Bank Group and BVG Associates in June 2021 to develop the nation’s first offshore wind roadmap, which would share advice on how to set short- and long-term goals, formulate strategies, and propose supportive government policies.

Moving to offshore wind is unlikely to be a straightforward shift.

The Philippines electricity system is made up of three grids -- Luzon, Mindanao and Visayas -- with most bulk generation based far from most energy-intensive areas. Most of its electricity generation comes from coal (47.5%), other fossil fuels (18%) and gas (10.5%), with under one quarter (24%) from hydro and other renewables.

Making the move will be all the more difficult given the country’s susceptibility to extreme weather, rising sea levels, and damage wrought on its agricultural systems by climate change. In 2019, think tank the Institute for Economics & Peace ranked it the most vulnerable country globally to climate change.

This lends tremendous urgency to the country’s green plans, and why it is set to follow nearby Taiwan and South Korea to establish its offshore market.

Decarbonisation desires

The Philippines gains around four-fifths of its electricity from imported fossil fuels, making power prices some of the highest in southeast Asia. With a rapidly-growing population of now over 111million people, combined with high economic growth, energy demand is rising fast. This could further raise prices.

Shifting away from coal, which is responsible for around 60% of the country’s power outages, will be crucial to reaching its target for renewables to make up 35% of its power mix by 2030, rising to 50% by 2040.

Demand for offshore wind in the Philippines has been strong despite the lack of a roadmap. The DoE has already awarded multiple 25-year offshore wind development contracts totalling 5GW as an appetiser for international players.

Spanish utility Iberdrola, in partnership with domestic developer Triconti and Swiss investor Stream Invest Holding, secured the rights to 3.5GW across five projects in January. The company said it would be using fixed foundations.

Southeast Asian developer The Blue Circle and Philippines independent power producer CleanTech Global Renewables also secured a contract for a 1.2GW project in January. They said it would consist of fixed and floating turbines.

And the DoE says it has received further applications and letters of intent for 12GW of offshore wind projects, which shows strong industry demand.

Favourable wind resources and the proximity to transmission grids and demand centres mean the northern and central parts of the Philippines would be well-positioned for offshore wind deployment.

Areas including northwest Luzon and the north and south of the island Mindoro have been identified as key areas for floating wind with strong wind speeds and deeper waters. The Guimaras Strait and the Manila area are shallow enough for fixed foundation projects.

Upcoming challenges

But the country faces hurdles to reach its potential, beyond the environmental issues we identified earlier.

Like many countries, its permitting processes are complex. A wind project’s pre-development stage in the Philippines typically lasts up to five years. This is costly and could prove to be a disincentive for developers to invest heavily in the market.

The government’s preferred off-take structures are also unclear, whether that is power purchase agreements or feed-in-tariffs (FiTs). While the Philippines does support renewables projects with FiTs, its use of them is declining.

And finally, there’s the supply chain, or lack of it. There is no domestic turbine manufacturing industry in the Philippines, but that does not need to be a major obstacle given the growth of offshore wind in some of its neighbours.

None of this is insurmountable and the potential is great.

Made up of 7,641 islands, the Philippines must contend with its topography if it is to move to a green electricity system.

But it has huge potential: its coastlines measure 36,289km and the World Bank says it could host 178GW of offshore wind. Of this, floating wind would be the main driver, accounting for 160GW of the southeast Asian country’s potential. Fixed-foundation projects represent 18GW.

So how close is it to getting started?

On Wednesday 20th April, the country’s Department of Energy (DoE) is set to publish the results of a key study into its offshore wind potential.

The DoE commissioned the World Bank Group and BVG Associates in June 2021 to develop the nation’s first offshore wind roadmap, which would share advice on how to set short- and long-term goals, formulate strategies, and propose supportive government policies.

Moving to offshore wind is unlikely to be a straightforward shift.

The Philippines electricity system is made up of three grids -- Luzon, Mindanao and Visayas -- with most bulk generation based far from most energy-intensive areas. Most of its electricity generation comes from coal (47.5%), other fossil fuels (18%) and gas (10.5%), with under one quarter (24%) from hydro and other renewables.

Making the move will be all the more difficult given the country’s susceptibility to extreme weather, rising sea levels, and damage wrought on its agricultural systems by climate change. In 2019, think tank the Institute for Economics & Peace ranked it the most vulnerable country globally to climate change.

This lends tremendous urgency to the country’s green plans, and why it is set to follow nearby Taiwan and South Korea to establish its offshore market.

Decarbonisation desires

The Philippines gains around four-fifths of its electricity from imported fossil fuels, making power prices some of the highest in southeast Asia. With a rapidly-growing population of now over 111million people, combined with high economic growth, energy demand is rising fast. This could further raise prices.

Shifting away from coal, which is responsible for around 60% of the country’s power outages, will be crucial to reaching its target for renewables to make up 35% of its power mix by 2030, rising to 50% by 2040.

Demand for offshore wind in the Philippines has been strong despite the lack of a roadmap. The DoE has already awarded multiple 25-year offshore wind development contracts totalling 5GW as an appetiser for international players.

Spanish utility Iberdrola, in partnership with domestic developer Triconti and Swiss investor Stream Invest Holding, secured the rights to 3.5GW across five projects in January. The company said it would be using fixed foundations.

Southeast Asian developer The Blue Circle and Philippines independent power producer CleanTech Global Renewables also secured a contract for a 1.2GW project in January. They said it would consist of fixed and floating turbines.

And the DoE says it has received further applications and letters of intent for 12GW of offshore wind projects, which shows strong industry demand.

Favourable wind resources and the proximity to transmission grids and demand centres mean the northern and central parts of the Philippines would be well-positioned for offshore wind deployment.

Areas including northwest Luzon and the north and south of the island Mindoro have been identified as key areas for floating wind with strong wind speeds and deeper waters. The Guimaras Strait and the Manila area are shallow enough for fixed foundation projects.

Upcoming challenges

But the country faces hurdles to reach its potential, beyond the environmental issues we identified earlier.

Like many countries, its permitting processes are complex. A wind project’s pre-development stage in the Philippines typically lasts up to five years. This is costly and could prove to be a disincentive for developers to invest heavily in the market.

The government’s preferred off-take structures are also unclear, whether that is power purchase agreements or feed-in-tariffs (FiTs). While the Philippines does support renewables projects with FiTs, its use of them is declining.

And finally, there’s the supply chain, or lack of it. There is no domestic turbine manufacturing industry in the Philippines, but that does not need to be a major obstacle given the growth of offshore wind in some of its neighbours.

None of this is insurmountable and the potential is great.

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Not a member yet?

Become a member of the 6,500-strong A Word About Wind community today, and gain access to our premium content, exclusive lead generation and investment opportunities.