Philippines and CIP agree on first foreign-owned offshore wind farms

The Philippines recently lifted foreign ownership restrictions on renewable energy development. It is part of a program outlined by President Ferdinand Marcos Jr. to accelerate the development of renewable energy sources for the country. Niels Holst, partner at CIP and head of CINMF, said the lifting of restrictions on foreign ownership of renewable energy projects in the Philippines in 2022 is an important development for his company as it gives them positive signals to start investing in the country.

“We are excited about the arrival of CINMF, a dedicated fund manager with greenfield investments in renewable energy and one of the world’s leading providers of offshore wind energy,” said Energy Minister Raphael PM Lotilla. “They will bring financial strength and technological clout, working with Filipino partners during the construction and operational phases.”

The three projects are to be developed in Camarines Norte and Camarines Sur, off the coast of Northern Samar and off the coast of Pangasinan and La Union. Once implemented, the three projects are expected to create around 4,500 jobs during development and operation, generate enough electricity to power around one million households and offset around 2.9 million tons of CO2 emissions per year.

The Philippines and the Danish government have a long history of cooperation in developing wind power in the country. The 25 MW Bangui Bay wind power project, developed on land by Northwind Power Development Corporation in 2004 in Bangui, Ilocos Norte, was partially funded by the Danish government through the Danish International Development Assistance (DANIDA). It was a landmark project that paved the way for the development of onshore wind power projects in the country and region of Southeast Asia.

Danish Ambassador Melbin said the Filipino people deserve more reliable and cheaper electricity. Large-scale deployment of renewable energy is the quickest way to achieve this, he said.

The Philippines currently has no installed offshore wind farms. The World Bank estimates the potential for more than 178 GW of offshore wind in the country. In cooperation with the World Bank, the Philippine Department of Energy published an initial plan for offshore wind development last year.

One of the country’s largest energy suppliers, Aboitiz Power, is currently conducting a feasibility study examining the potential for up to 3 GW of offshore wind by 2040. They are expected to complete the study by mid-year.

The Philippine Department of Energy announced so far that 57 offshore wind service contracts with a total potential capacity of approximately 42,000 MW have been awarded to be developed. The DOE has set itself the goal of increasing the share of renewable energies in the electricity generation mix from the current 22 percent to 35 percent by 2030 and to 50 percent by 2040. The World Bank report puts a low estimate of just over 5 percent from offshore wind and high growth potential to reach 40 percent of the country’s electricity supply from offshore sources by 2050.