Spanish firm plans gigantic 7.6GW offshore wind investments in PH

Aggregate investment could command trillions-pesos worth of capital

At a glance

  • The initial offshore wind capacity it is targeting to advance to commercial stream will be by the turn of the decade and it shall be sited close to the load center of off-taker power utilities.

Madrid-headquartered Bluefloat Energy announced plans for gigantic 7.6-gigawatt (7,600 megawatts) offshore wind power projects in the Philippines, the biggest in its portfolio, with a target  to bring the initial development onto commercial operation by the turn of the decade.

In a briefing with the media, Bluefloat Energy Chief Executive Officer Carlos Martin emphasized that the offshore wind project buildup in the Philippines will be the biggest in its portfolio. Martin said the Philippine projects would even be more expansive than the company's existing core markets, such as those in Australia, Italy, Scotland, Colombia, Wales and England, New Zealand, Spain and Taiwan, among others.

The Philippine venture, which will likely lean more on deployment of floating offshore wind farm installations, is also expected to serve as a landmark undertaking in the Southeast Asian region.

If based on the current development cost of offshore wind installations, each megawatt could command $3.0 million to $5.0 million capital outlay, Bluefloat's 7.6GW project will require $22.8 billion to $38.0 billion, approximately P1.276 trillion to P2.128 trillion, in investments.

Martin qualified “the general rule is that, for every 1.0MW of offshore wind, it requires investment of $3 million, $4 million to $5 million…but that is just a fraction of the investment, there will be additional investment in the supply chain. We need to train a lot of people – engineers, technicians and highly qualified field workers, so the total investment in all of these can be two to three times the value of the project.”

The four OSW service contracts cornered by the company straddle sites in Northern Luzon, Central Luzon, South Luzon and Southern Mindoro, which are resource-rich domains identified by a World Bank study.

“Bluefloat Energy has been actively exploring the development of offshore wind in the Philippines since 2021. Following a comprehensive site assessment exercise, four offshore wind energy service contracts have been secured,” he narrated.

Nevertheless, since the investment will be implemented on a multi-year basis, the Spanish firm executive indicated that with efficiency in project development as well as technology innovation, the final development cost can go down in the years ahead and the levelized cost of energy (LCOE) drawn from offshore wind would eventually end up more affordable for the Filipino consumers.

The current turbines deployed for ongoing offshore wind projects are at 15MW configuration, while the next technology breakthrough could break into 18MW per turbine, and further-ahead innovations could be in the 25MW territory.

Martin sounded off excitement on the investment plan for the Philippines, it being strategically linked to the goal of the Marcos administration to turn the country into a "mecca of green energy" as underpinned by the Renewable Energy Development Roadmap of the Department of Energy.

“We are thrilled to bring Bluefloat Energy’s expertise and experience in offshore wind energy to the Philippines,” he stressed, emphasizing that “by tapping into the country’s vast clean energy potential, we can make a significant contribution towards reducing carbon emissions and fostering a sustainable future for generations to come.”

He highlighted that “offshore wind is the only technology that can deliver the scale of renewable energy required to meet the Philippines’ decarbonization goals” – primarily on the targeted 35-percent RE share in the power mix by 2030; and its mandated ramp up to 50-percent by 2040.

But like all the other investors in the nascent offshore wind industry in the Philippines, the company also has long "wish list" when it comes to policy and regulatory enforcements as well as warranted infrastructure development and improvements – because all these elements would be required in ensuring the long-term successes of projects in the sector.

Top of these concerns include developing a strategic grid extension planning to accommodate new capacity, especially the gigawatt-scale installations for offshore wind; to plan and support port upgrades and the need to firm up a regulatory framework that will make OSW ventures financeable – and such may warrant feed-in-tariff (FIT) for ‘pathfinder’ or pilot projects both for fixed bottom and floating offshore wind developments with a starting point of 200 to 300MW capacity.

“We are proposing to develop first what we call ‘stepping stones’ for development of offshore wind, that’s what we’ve been observing in other markets - that’s what had been the case of success in markets like Spain, Portugal, Scotland in Europe and all markets like Taiwan, Japan, and China,” he conveyed.

On the policy pillars of the industry, he emphasized that “Bluefloat Energy has been actively engaging with the Philippine Department of Energy to provide support in shaping the future offshore wind regulatory framework, leveraging on the expertise gathered from other markets.”

In terms of project siting, Martin noted that the company “will work closely with the local communities, government entities and other stakeholders to ensure that its projects comply with environmental regulations, respect local cultures and provide long-term benefits for the communities in which it operates.