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Grace Kuo, Director of Technical Advisory for Offshore Wind Energy, discusses the technical support required for realising offshore wind projects in the Philippines
Offshore wind is moving closer toward becoming a reality in the Philippines, as recent developments show strong momentum from the government and private stakeholders in undertaking the renewable energy transition with vigour and urgency.
According to the Department of Energy (DOE), six identified offshore wind development zones in the country hold a potential capacity of 178 gigawatts (GW) spread across 876 prospective projects. It is expected that offshore wind will play an important role in the Philippine government’s target to have renewables account for 35% in the national power generation mix by 2030.
Despite this, key questions remain especially on how to plan, construct and operate offshore wind farms, along with how to integrate them into the national grid. Also as important is how to actually finance projects of this scale and complexity—all are unprecedented in the Philippine context.
Navigating this uncharted territory requires conversations—challenging, at times technical and complex ones. Yet these are essential to move forward. Such conversations were had at the 3rd Wind Energy Forum (WEF), organised by NIRAS and the Nordic Chamber of Commerce of the Philippines last May 28 to 29, bringing together stakeholders who shared updates, insights and experiences and explored avenues for collaboration.
With the Philippines gearing up for offshore wind in the coming years, the forum covered a wide range of topics:
Technical aspects of offshore wind projects, such as turbine foundations, cable installation and management and operation and monitoring of wind farms;
A robust supply chain crucial for wind farm construction and installation, ensuring the availability of resources from raw materials to a capable workforce;
Reliable integration of offshore wind output to the national grid, affected by factors such as variability due to weather, time misalignment with grid connection planning or the readiness of the Philippine grid spread across its islands;
Construction of infrastructure essential to offshore wind, such as ports that could handle the projects’ large components;
Updates on offshore wind port development, highlighting the necessity for interdepartmental collaboration within the government and the private sector;
Ensuring that environmental and social safeguards are in place on offshore wind projects through engaging with local communities and studying the project area to identify possible biodiversity conflicts.
A major part of this year’s WEF centred on financing, insurance and risk aspects associated with offshore wind projects. Described as the “elephant in the room”, representatives from financial institutions sought to spark discussions on how to best fund these projects, drawing from past experiences abroad and considering the local financial landscape.
We are still in the very early days. Every time you talk about bankers and loans—especially project finance—you have to think about security structure.
Matthew Carpio, Head of Transaction Advisory, Climate Smart Ventures
Given the large capital and complex nature of offshore wind development and with its offshore location challenging construction and operation logistics, risk-sharing is seen as an important aspect of offshore wind funding. Matthew Carpio, head of transaction advisory at Climate Smart Ventures, noted that stakeholders are still learning how to navigate regulatory and legal issues unique to offshore wind projects. For instance, applying existing regulations and risk-sharing mechanisms to offshore wind may be difficult.
The right policy environment and right project structuring, through proper stakeholder coordination and developing feasibility studies that would show that the projects are bankable, will be more enabling for the private sector to participate.
Rafael Badillo, PPP Center of the Philippines
Another is the potential for public-private partnerships (PPPs) to share financing between government and private sector. According to Rafael Badillo of the PPP Centre of the Philippines, offshore wind projects can be undertaken as PPPs if they fall under port infrastructure or power generation and distribution, either separately or bundled as one.
We need to create the environment where these conversations can be had on a collective level, avoiding the generalities and going to the nitty-gritty issues.
Stephen Phillips, BDO Unibank Inc
Extensive panel discussions delved deeper into insurance, from optimising costs and fostering partnerships to understanding regulations. Banking institutions also shared their experiences in financing offshore wind projects abroad—highlighting both successful and not-so successful outcomes, offering key lessons as offshore wind takes off in the Philippines.
Speakers at the forum agreed that, given the fact that this is a new territory for the Philippines, it is crucial for stakeholders to be on the same page on offshore wind development, learning from each other to measure appetite for risks, creating and understanding the intricacies of the market and identifying what still needs to be done.
2024 was hailed as the best year ever for the wind industry, with new onshore and offshore wind installations surpassing milestones. Global Wind Energy Council's Philippine Country Manager Ann Margret Francisco said the Asia-Pacific region continues to lead the global market in the installation and operation of wind farms, and there are key economic and environmental benefits that the Philippines stands to gain from its adoption.
With offshore wind representing only 7% of the global wind market share, or about 83.2 GW, the Philippines is set to become one of the pioneers in the region. As such, the Philippine government is committed to fostering a conducive environment for offshore wind development, but it cannot do it alone, said DOE Undersecretary Giovanni Carlo Bacordo. “It calls for a united coalition with the private sector, financial institutions, local government, port infrastructure developers, technology partners and the global community working together.”
Despite challenges and roadblocks, observers see a positive story in the Philippines—especially on recent developments in economic policy and reforms to ease doing business. With policy and financial support the country is being given, it is a matter of adopting a long-term strategy that supports the offshore wind industry.
We have seen great momentum building here. The vision set out by the key players, the dynamism and the great strides already made are exciting.
Lauren Beaufils, British Ambassador to the Philippines
Laure Beaufils, British Ambassador to the Philippines, hailed the Philippines’ potential in the offshore wind space as she drew parallels between the UK’s experiences in starting offshore wind and the Philippine situation today.
This was also echoed by Danish Ambassador to the Philippines Franz-Michael Skjold Mellbin, as he highlighted the diplomatic community’s continued confidence in the Philippines’ commitment to renewable energy.
"Within the energy sector, especially the wind sector, the Philippines has actually done remarkably well," he said. "As we speak here, the Philippines is the next best place in the world to do renewable energy projects."
As it is, the ongoing dialogue on offshore wind in the Philippines is essential in its journey toward sustainable energy.
“The breadth of the conversation reflects a shared commitment to advancing offshore wind energy, not only as a matter of technology and implementation but as a driving force for the energy transition in the Philippines,” said John Stasig Moerk, NIRAS’ Regional Director for Asia-Pacific.
