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CE-Yuchengco JV to invest P740 B for offshore wind projects

Published May 01, 2023 06:14 am  |  Updated May 01, 2023 06:14 am
COPENHAGEN- The joint venture of Danish firm Copenhagen Energy A/S (CE) and Yuchengco-led PetroGreen Energy Corporation under corporate vehicle Buhawind Energy will be investing €8.0 billion to €12 billion, approximately P493.8 billion to P740.8 billion, for three offshore wind projects in the Philippines. The projects are expected to add 4,000 megawatts of renewable energy (RE) capacity to  Philippine power supply upon completion. In an interview, Copenhagen Energy Chief Executive Officer Jasmin Bejdic indicated that the first offshore wind project in Ilocos Norte with capacity of 1,650 to 2,000 megawatts is slated for its start of construction in 2027 and full commercial operation date (COD) by 2030 while the next phases will follow after that with 1,000 megawatts in Northern Mindoro and 1,000MW in East Panay. He explained that the capital expenditure (capex) required for the offshore wind facilities per megawatt-installation shall be at €2.0 million to €3.0 million. “That would be 8 to 12 billion euros for the entire 4.0-gigawatt projects, it will be a big infrastructure investment, and this will be among the biggest investments in the Philippines,” said Bejdic. Bejdic qualified that the targeted completion of the projects could be realized once key policies as well as infrastructure support facilities for offshore wind projects have been concretized by the government as well as the other relevant stakeholders in the sector. “There are four critical enablers as we call them in order to reach maturity of the projects where we would start the construction – one should be grid connection so we can get the power into the system; then there’s the offtake; and the infrastructure in terms of port infrastructure which is very important; and the last one is the permitting process that has to be streamlined,” he stressed. On the sphere of grid integration, the CE chief executive raised concern that “there is a backlog for many offshore wind projects that are waiting for the outcome of the system impact study. What we have been appealing to is: for this backlog to be cleared and the priority projects are prioritized because we can help to deliver the power required by the country.” In terms of off-take that will address market risk of the OSW-generated electricity, Bejdic opined that an auction system, similar to the green energy auction (GEA) for the other RE technologies, could also be done for the nascent offshore wind sector. Improvement and re-purposing of port facilities so they could ably serve the needs of the offshore wind industry is also a major concern that Buhawind Energy has been batting for; and this is an area that they would want to see firm and tangible actions moving forward to underpin the continued development of all proposed projects in the offshore wind industry. When it comes to permitting, he stated that the recent issuance of Executive Order No. 21 by President Ferdinand Marcos Jr. on the streamlining of OSW permitting is a very positive development that the investors can latch on to. Nevertheless, he specified that they are still waiting for the more specific details on how that Presidential directive could be operationalized by the government, especially by the Department of Energy (DOE) which is the lead agency in the integration of all warranted permits via the Energy Virtual One-Stop Shop (EVOSS) platform. “We have had dialogues with authorities about introducing a one-stop shop, basically, if we would have to deal with one authority, the DOE – that authority will then both deal with local levels; regional levels; with environmental agencies – so it’s really about streamlining the process because once you get a service contract, you still have to get all permits in parallel. And I think that has been a positive development with the Executive Order, so that’s really good – so from that, it’s about implementing the system to speed up the processes,” he asserted. At present, Bejdic conveyed that “along with our partner PetroGreen, through Buhawind, we are in the process understanding the port infrastructure; and we are working on understanding the soil conditions, that’s very important for the design of the platforms.” Additionally, he emphasized that the JV company is in the process of comprehensively measuring the potential of the wind resource across its project sites, “and we are also looking into the offtake possibilities, basically, how can we have secure offtake for a long term that can make the project financially viable.” He emphasized that the Northern Luzon project will serve as the ‘flagship project’ of the CE-PetroGreen tandem; and if all the warranted support policies and infrastructure facilities are set in place as they are needed, then the company can start injecting generated electricity into the grid by 2028 from the first batch of connected wind turbines. “We have actually made the feasibility studies already, so basically, the Northern Luzon project in Ilocos Norte is our flagship project…we have done also local consultations and we are looking into environmental impacts,” he shared, adding that “during the feasibility study, we have studied the whole of Philippines; when we look into wind resource constraints, we assessed where are the environmental sensitive areas, so we tried to stay away from those and we tried to identify these areas that are some of the best locations in the Philippines.”



Related Tags

offshore wind Department of Energy (DOE) PetroGreen Energy Corporation Renewable energy (RE) Renewable energy and community development EVOSS RE auction
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