SHELL BUYS INTO ALTERNERGY’S 1,000-MW WIND FARM PROJECT IN MINDORO

Local renewable energy developer Alternergy Holdings Corp. and British oil giant Shell Group have partnered to undertake what it dubbed the first offshore wind project in the Philippines with a potential capacity of up to 1,000 megawatts (MW).

The partnership between Alternergy, through its unit Pililla AVPC Corp., and Shell Overseas Investment B.V. intends to develop the Calavite Passage Offshore Wind Project in Mindoro. Shell will get a 40 percent stake in the joint venture while Alternergy will retain 60 percent.

Joe Nai, general manager of Shell’s Offshore Power Asia Pacific, said it would typically take six to 10 years to complete the construction of such an offshore project.

“The speed of that—whether it will be five years or 10 years—really depends on the regulatory framework,” said Nai in a briefing held in Makati City, noting the process involves finding the right location, securing permits and making a final investment decision.

The Department of Energy had estimated the capital outlays needed for such an offshore project at $5 million or almost P287 million per megawatt.

Alternergy chair Vicente Perez Jr., a former energy secretary, said it would take a whole-of-government approach and “coordinated effort” for offshore wind projects to flourish in the country.

“Port infrastructure is a critical component to any offshore wind project,” said Perez. “We have to work hand in hand with NGCP (National Grid Corp. of the Philippines) and TransCo (National Transmission Corp.) to address how to allow the large-sized projects like an offshore wind project into the grid.”

NGCP operates the country’s transmission network while TransCo still owns the transmission assets of the state.

A World Bank study previously estimated that the Philippines has the potential to install 21 gigawatts of offshore wind power by 2040. This can cover 14 percent of the country’s electricity needs and create about $14 billion (P803.3 billion) in value added to the economy, according to Perez.

The Calavite offshore project spans about 78,000 hectares at the passage between northwest Mindoro and Lubang Island.