A whopping investment of $3 billion (approximately P165 billion) will be injected by Danish firm Copenhagen Offshore Partners (COP) for the first 1,000 megawatts San Miguel Bay offshore wind project in Camarines Sur that it is targeting to bring on commercial stream by 2028.

On prevailing rule of thumb cost for offshore wind projects, COP Co-CEO Rune Damgaard indicated that the capital outlay for their blueprinted wind farm development in the Bicol region could top $3.0 billion on a full development cycle – and that scale of project financing would likely be a split of at least 70% loan and 30% equity.

COP, which is the  exclusive offshore developer of Copenhagen Infrastructure Partners (CIP), has more than 2,000MW of development pipeline in the offshore wind sector that will command aggregate investment of $5.0 billion once all of its projects would be concretized -- including two other ventures in Samar Norte at 650MW and Dagupan site in Pangasinan for 350MW; while targeted onshore wind development in San Jose, Nueva Ecija is at 300MW.

For the San Miguel Bay installation, Rune conveyed that they already filed their application for pre-development environmental compliance certificate (ECC) with the Department of Environment and Natural Resources (DENR); while also preparing for other targeted project milestones – including the completion of wind measurement at their awarded site as well as the green energy auction (GEA) being slated by the Department of Energy (DOE) next year and the repurposing of ports that is being advanced with the Philippine Ports Authority (PPA); plus  ensuring grid connectivity of their generated capacity through the network of system operator National Grid Corporation of the Philippines.

“The pre development activities is everything up until financial close on COCO (certificate of confirmation of commerciality),” he said, referencing on the final outcome of wind assessment that will be drawn from their deployment of LIDAR, an equipment used in gathering wind data at their project site in Camarines Sur.

“We've deployed two different LIDARs - we have deployed vertical LIDARs and we have deployed scanning LIDARs. Scanning LIDAR is a new technology. Basically, it measures at the inception point of a laser. And these are quite accurate, as well as vertical LIDARs, which has been deployed for years. And since we are not too far away from shore, we're confident that our wind measurements are accurate to the extent,” Damgaard narrated.

To date, CIP Partner Robert Helms noted that the magnitude of investment funneled so far in their pre-development activities already topped $30 million, with him stressing that “a good part of that has already been sort of contractually committed.”

He expounded “we are still relatively early stage in terms of the capex (capital expenditures) because we have only started the procurement work behind these numbers. But so far, we anticipate a capex of roughly $5 billion for the two gigawatts of offshore wind, and then onshore wind would maybe a tiny little bit cheaper per megawatt. But it's also quite a significant number - maybe half a billion dollars or so, something like that.”

CIP Associate Partner Przemek Lupa relayed to key government officials during the inauguration of their Manila office that in their current wish list would be the approval of their pre-development ECC; the conduct of GEA as earlier sounded off by the DOE as well as the warranted repurposing of ports that will be needed for the country’s robust pipeline of offshore wind projects.

“Philippines is a key market for CIP because of the strong fundamentals and the high growth. But then importantly also, the Philippines is a liberalized market. The power sector is liberalized, which as you know in this region, is a very, very unique feature,” he stated.

Lupa highlighted “the most important that we see here is that renewables and the energy transition get tremendous support from the government. And this is really particularly felt during this Marcos administration.”

He primarily cited that on their entry in the renewable energy (RE) sector of the Philippines, “what we found in the DOE and in the government in general - because we do business in many countries - and what we found here is the sincerity of the entire administration to push for renewable energy and to push for energy transition.”

He added “governments like to talk, but here I think we do find sincerity and that really encourages us to focus on the Philippines as one of our key markets. And of course the DOE has been, and I'm sure, will continue to be extremely supportive to us and all the developers -- particularly to find solutions to things like grid access, which is of course very important for offshore wind.”

For their San Miguel Bay wind farm venture, COP will need to secure large grid connection that will traverse Naga for its targeted commercial operations date (COD) by 2028.

Relative to that, the Danish firm reportedly sought the assistance of the DOE on securing the approval of the Energy Regulatory Commission (ERC) for a substation upgrade and reinforcement work on the 500-kilovolt (kV) Naga transmission line - preferably prior to next year’s GEA process.

Also in the roll of investor-challenges yet to be resolved by the government would be the concerns on foreshore lease and onshore land rights, primarily for foreign developers; seabed lease concerns and the bankability or financial viability of tariffs to be offered under GEA that will also be the basis of the Renewable Payment Agreement (REPA) to the winning developers.

When asked if COP would be tapping partner for its Philippine projects, Helms said they can pursue the projects on their own at this point, although he qualified that “we certainly do not exclude the opportunity to find a really good and capable local partner along the way. I mean, we would welcome the discussion, if there's anyone out there.”