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The Philippines could install as much as 21 GW of offshore wind
capacity in the next three decades as the country's generation
stack is diversified as part of a decarbonization push, a new World
Bank report shows.
In the roadmap formulated by the World
Bank in partnership with the country's government, which was
released 20 April, a total of six development zones (see map below)
are identified for offshore wind that could be supplying as much as
21% of the Philippines's electricity by 2050.
The Philippines currently has no offshore wind turbines turning,
and if the roadmap's projections are to come to fruition, the World
Bank reckons "the right long-term vision, infrastructure
development, investment, and policies" will be needed. Such
ambition would, however, bring greater investment and cost
reduction, it added.
Source: World Bank
Coal-fired power represented almost 48% of the nation's power in
2019-2020, according to the Philippines Department of Energy
(DOE), and oil and natural gas contributed another 28%.
Renewables contributed 24%, of which a 90% share was hydropower.
Emissions from the burning of coal and oil comprised around 87% of
the Philippines' carbon emissions in 2021, according to the World
Bank.
The government has a two-pronged plan to change its generation
stack: increase gas-fired generation as a transitional fuel and
hike renewable output.
In October, the Philippines set targets of generating 35% of its electricity
from renewable sources by 2030 and 50% by 2040 to help counter
global warming.
Filipino waters have conditions that are well-suited to offshore
wind, Ndiamé Diop, World Bank country director for Brunei,
Malaysia, Philippines, and Thailand, said.
Jie Tang, World Bank energy practice manager for the East Asia
and Pacific Region, added that the Philippines has 178 GW of
technical offshore wind potential.
The report identifies six possible areas for development:
Northwest Luzon, Manila Area, Northern Mindoro, Southern Mindoro,
Guimaras Strait, and Negros/Panay West. Indeed, the combined
capacity of the six zones could reach 40 GW, which is 54% greater
than the Philippines' total generation capacity from all resources
in 2020 of around 26 GW.
Around 90% of the potential is found in waters deeper than 50
meters, which will require the use of floating offshore wind
turbines, the report said. This is not an uncommon challenge, some
80% of the world's offshore wind resource potential lies in waters
deeper than 60 meters, according to the Global Wind Energy Council
(GWEC), a trade association.
In the roadmap, the bank envisages two scenarios, a low-growth
scenario that sticks to the government's existing renewables plans,
and a high-growth option where it aims higher and takes a path that
gets closer to the 21 GW target.
To do so, the multilateral bank recommends establishing offshore
wind development zones through further marine spatial planning;
investment in transmission, port and other energy infrastructure
upgrades; and increasing collaboration with industry and other
relevant government agencies.
The roadmap was well received by the government. "The
Philippines has a rapidly growing demand for power," said DOE
Secretary Alfonso Cusi. "It is clear from this roadmap that
offshore wind can play a major role in meeting our country's energy
demand indigenously, while also accelerating decarbonization."
DOE has already awarded 30 wind energy service contracts
(WESCs), representing a cumulative offshore wind capacity exceeding
20 GW, according to the report. Many of these WESC areas coincide
with the zones identified in this roadmap, it said.
Floating projects to drive buildout
The high-growth scenario involves mainly floating projects,
following four years of installing fixed-bottom projects in the
lowest-cost sites. As the cost of floating offshore wind declines
and because of the low availability of locations suitable for fixed
projects, the market will transition to almost exclusively floating
projects, it said. Under the report's low growth and high growth
scenarios, the first floating projects would be operational in 2034
and 2030, respectively.
GWEC expects 16.5 GW of floating wind installations to be
operational globally by 2030 and it sees a clear opportunity for
floating wind in the Philippines, spotlighting the country's
potential in a March report.
The Philippines benefits from a few but "very decent sites" with
prospective wind conditions in close proximity to the largest load
center of the capital Manila, GWEC said. In this area, sites are
identified with wind speeds up to 10 to 211 meters per second and
less than 500-meter water depth, making it attractive for floating
wind (see World Bank map below), it said.
Source: World Bank
At least one industry giant agrees. In January, Iberdrola signed an agreement with Stream
Invest Holding, a Swiss renewable energy group, and Triconti ECC
Renewables, the Philippines' largest independent wind developer.
Through the deal, the Spanish company secured an option to take
part in five Filipino projects with a combined capacity of 3.5 GW.
All the projects have WESCs. Iberdrola said the deal opens the door
to a market with "strong growth potential over the coming
decades."
Renewables follow coal push
Any long-term buildout of offshore wind capacity and renewables
in general must be placed in the context of the two-pronged plan,
the paucity of onshore sites due to agriculture accounting for 22%
of Filipino employment, and prior decades' generation fleet
tendencies.
The Philippines had 7.62 GW of installed renewable capacity as
of the end of 2020, including 3.78 GW of hydropower and 1.93 GW of
geothermal power. Renewables' share of the generation pie fell to
21% in 2020 from 34% in 2008, with the country opting to expand
coal-fired generation to meet rising electricity demand in the
2010s.
According to the government's October pathway, the Philippines
needs to increase its installed renewable capacity by 21.9 GW by
2030, including 18.6 GW of solar power and nearly 2 GW of
hydropower.
New rules for green power auctions were announced in August 2021
and those rules came a few months after the nation updated its nationally
determined contribution (NDC) under the Paris Agreement. Prior to
that, a moratorium on new coal-fired
power plants was introduced in October 2020. The updated NDC would
see a 75% reduction in GHG emissions from a 2020 baseline by
2030.
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