DOJ opinion sought on DOE-DENR MOA for offshore wind projects

At a glance

  • The foreshore and seabed lease agreements are among the tricky policies that have been distressing investors in the nascent offshore wind sector of the country.

A legal opinion is being sought from the Department of Justice (DOJ) on a targeted memorandum of agreement (MOA) that shall be signed by the Department of Energy (DOE) with the Department of Environment and Natural Resources (DENR) to sort out the concerns of investors on foreshore and seabed leases that shall be enforced for offshore wind (OSW) projects.

Energy Undersecretary Sharon S. Garin disclosed that “there’s already a draft MOA between the DENR and DOE; and we just have queries with the DOJ on our recommendations in the MOA – so that’s already in the works.”

The energy official had not provided the specific policies to be integrated in the MOA of the two agencies, but she stated that there are already firm recommendations from the DOE that shall also be instituted in a Department Order that the agency will be issuing soon.

“I don’t want to preempt because we’re trying to fix the issues; and the MOA hasn’t been signed yet by the two Secretaries…but what we’re trying to address are those on foreshore and the seabed utilization agreements for offshore wind,” she stressed.

The energy official added “we have a proposal of making it easier and feasible for the developers, but the sensitivity of the seabed and foreshore concerns, we have to make sure that legally, our recommendations are feasible, so we just need to make sure that this is backed by a legal opinion; and it’s better that we course it through proper channel, which is the DOJ.”

On the foreshore lease arrangement, she indicated that “what we’re proposing is if: there’s due delegation of power and if we’re not violating the Constitution, so those are the things that we’re asking the DOJ to provide us an opinion on.”

Foreign investors who signed up for 100-percent service contracts in their offshore wind projects are in a bind when it comes to foreshore lease agreement, because it is being proposed that they will need to tap a local partner for just a negligible parcel of land that will be traversed eventually by their facilities.

As prescribed under prevailing rules, the salvage zone for foreshore land extends 20 meters from the interior limit of the shoreline which is determined between the highest and lowest tide. Typically, that is covered with a 25-year foreshore lease agreement with the DENR.

Apart from foreshore lease deal, OSW investors are also seeking regulatory and policy clarifications on seabed lease arrangement because that could inflate the scale of investments that the sponsor-firms will be coughing up for their respective offshore wind projects.

“These are the concerns of investors because they would be using the seabed for some components of their offshore wind projects, but they will not be extracting from underneath, instead they would be harnessing wind for electricity generation, so those are the questions that we need to settle,” Garin noted.

She asserted that what the energy department will be lodging with the DOJ “is a long letter stating all the issues raised by investors, but we have yet to submit it.”

The energy official stressed “once we secure that legal opinion from the DOJ, then we can fine-tune or we can already proceed with the signing of the MOA with DENR, and then we also issue the corresponding Department Order to support the policies.”