Investors from Denmark are eyeing to join the tender process for the propounded multi-billion power transmission projects that the government is targeting to offer via its Smart and Green Grid System (SGGS) development platform.

According to Denmark Ambassador to the Philippines Franz-Michael Mellbin, Danish companies have been setting their sights on the targeted development of a parallel grid that will underpin the massive-scale renewable energy (RE) installations in the Philippines, primarily for offshore wind.

“If this happens, there will be interest from the investors’ side. If the Philippines sets up an attractive system that will allow for investments, there will be Danish investors who are willing to go into these kinds of investments,” he stressed.

Mellbin noted that for Danish investors, “there’s a lot of expertise out there, including from many of these renewable energy companies and investors because they are used to working with variable energy inputs in this kind of systems.”

Nevertheless, the envoy qualified that the investors will be looking for a stable and predictable policy regime and regulatory frameworks for any capital infusion that they will pursue for these projects.

“What the Philippines need to do is provide an environment that will be comfortable for these investors to put up capital for these projects,” he emphasized.

As has been sounded off by the Department of Energy (DOE), the plan is to tap foreign investors for the SGGS development that may command up to P500 billion worth of investments; and that shall be offered via public-private partnership (PPP) arrangement.

The design of the parallel grid is currently being sorted with system operator National Grid Corporation of the Philippines (NGCP) because these facilities will need to be harmonized with the overall operations of power grids in the country.

Based on initial plans being cast by the energy department, it will be state-run National Transmission Corporation (TransCo) that will bid out the proposed contract for the SGGS project.

To allow investors to fully recoup the scale of capital funneled into these infrastructure development ventures, the PPP contract is targeted to be enforced for a duration of 25 years.

Under the updated Philippine Energy Plan (PEP), offshore wind capacity that shall be integrated into the energy mix could top 50 gigawatts by mid-century, and that will be part of the country’s overall decarbonization pathway as well as support to the RE development ramp up to 35% by 2030, then a higher magnitude of 50% by 2040.