Alternergy Holdings Corporation, a Filipino-led pioneer renewable energy (RE) company via its subsidiary Pililla AVPC Corporation (PACO) and Shell Overseas Investment B.V. have formally sealed their "investment marriage" for prospective offshore wind farm development at the Calavite Passage in Mindoro.
Alternergy Chairman and former Energy Secretary Vincent S. Perez indicated that the take-off point of this trailblazing tie-up will be on measuring the commercially-viable potential of their awarded service contract plus undertaking feasibility study that will eventually merit final investment decision (FID) on the project.
Under the current partnership agreement, 60-percent equity in the Mindoro offshore wind venture is placed under Alternegy's charge and Shell for the balance of 40 percent.
When asked if there will be changes in the shareholder-arrangement between the partner-firms following the Philippine government's issuance of a policy allowing 100-percent foreign ownership on RE projects, Joe Nai, general manager for Offshore Power Asia Pacific-Renewables and Energy Solutions, noted that their priority at this point will be to gauge first the prospective capacity generation of their initial offshore wind farm development in Mindoro.
Alternergy, in particular, emphasized that their partnership "has obtained a wind energy service contract (WESC) from the Department of Energy to assess the feasibility of an offshore wind project in the wind-swept Calavite passage near Mindoro."
"Currently we don't have final investment decision, this is still early stage," albeit he stressed that "as development progresses, we can have the commercial decision going forward," said Perez.
He qualified that the site of their prospective offshore wind farm project as well as its neighboring blocks have colossal potential of up to 5,000 megawatts of capacity.
And from that prospect, the Alternergy-Shell tandem would be looking at prospective energy generation of at least 1,000MW - and that will be the scale that they are targeting to get affirmed in the feasibility study that could be completed within five-year stretch.
"That particular site in Mindoro has potential of 5.0 gigawatts. We need a large project - 1.0GW potential for that area. That's what we will finalize as we reach final investment decision," Perez stressed.
Nai underscored that offshore wind typically has long lead time of 6 to 10 years before any project could reach commercial operations phase, but the silver lining for the industry is the maturing technology on this RE development space - that per turbine could now yield capacity of 15MW and the siting will not also be in competition with land use for the food chain.
And while the duo will be advancing on their feasibility study phase, they also sounded off optimism that the government will step up collaboration on addressing the critically-needed fixes in the OSW development sphere, including those on setting up a cavernous port infrastructure facility in Mindoro that will eventually cater to the movement of goods and delivery of equipment when the targeted projects would finally reach commercial development phase.
There are also other hurdles that the government via the DOE would need to address. These include the integration of offshore wind capacities into the grid; demarcating exclusion or security zones for the developed facilities; addressing dilemmas on water rights and the concerns of the fisheries sector, project financing, as well as the other environmental and social impacts.
Lorelie Quiambao-Osial, country chair of Shell companies in the Philippines, asserted that as the Philippines "is moving towards a low-carbon future and offshore wind is well-positioned to support this energy transition...we will continue to support the country by providing more and cleaner energy solutions to meet the needs of our customers today and in the decades to come."
Sarah Rose Lin, Shell's head of Offshore Power for Philippines, further said with Alternergy's pioneer-investor stature in the country's RE investment milieu, "Shell looks forward to this new partnership to jointly explore the feasibility of one of the Philippines' promising offshore wind projects."
Onward, the newly-minted partners similarly hinted that beyond the Calavite passage prospect, they will be "looking at other offshore wind sites for possible development."