Manila Bay and 2 other places in the Philippines are suitable sites for offshore wind development, a market research firm said Thursday. Join ANC PRESTIGE to get access to perks: https://www.youtube.com/channel/UCvi6hEzLM-Z_unKPSuuzKvg/join For more ANC Interviews, click the link below: https://www.youtube.com/playlist?list=PLm34qRgqWBU4AT2G3LWF27_RErcz0GVd9 For more Business Outlook videos, click the link below: https://www.youtube.com/playlist?list=PLm34qRgqWBU6TBYVPvgHTQWI2lYLCwbTM For more ANC Highlights videos, click the link below: https://www.youtube.com/playlist?list=PLm34qRgqWBU4cKXctfaRZsLEHahqOc9dQ Subscribe to the ANC YouTube channel! https://www.youtube.com/user/ANCalerts Visit our website at https://news.abs-cbn.com/anc Facebook: https://www.facebook.com/ancalerts Twitter: https://twitter.com/ancalerts #ANCAlerts #LatestNews #ANC

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Nice senior associate. Hi, Paula. Welcome to Market Edge.

Hi, good morning, Stanley.

It's good to have you here. Now, really, it's amazing that the Philippines has, what, over 36,000 kilometers of coastline

with a total technical potential of 178 gigawatts from offshore wind alone.

Now, tell us just how much that potential can ease the current and even the future power supply situation in the country.

So, as we've seen in the last report, we have yellow and red alerts in the Philippines right now, especially during the summer months.

It's because of the high demand for electricity and, again, the scheduled and unscheduled shutdowns of our coal power plants.

So, with this, the Department of Energy is really aiming to reach 35% renewable energy by 2030.

And since we have a moratorium on coal,

that means no new coal power projects other than those that are already in the pipeline.

There is more push for more bigger and larger renewable energy installations, one of which is offshore wind.

So, if we get these offshore wind developed in this decade,

then it will really provide that ease for us and will provide more reserves for electricity in the country.

All right, Paula, you mentioned decade.

Now, it's really an understatement to say,

now is a good time to be talking about additional energy sources and even improving the country's power mix,

given the power crisis we're experiencing right now.

But time is really not on our side when you talk about decades now.

Offshore wind and other large-scale renewable energy development projects may take more years to provide really a sizable supply.

Is there a way to hasten our progression towards these options?

What do you think? What do we need? Investments?

That is correct.

That is correct.

That is correct.

So, actually, the main purpose of our study is to pinpoint which of the sites in the Philippines has the most potential in the near-term development.

So, not all sites are made equal.

So, some of them can be easier developed than the others.

So, we conducted pre-visibility study in the areas of Manila Bay, Tayabas Bay, and the water surrounding Guimaras Island.

And the study focused on the zones that accommodate fixed-bottom installation to support the government's 2030 renewable energy targets.

So, with this one, we are looking at the sites, they have wind speeds of greater than 7 meters per second, proximity to major load centers in southern Luzon and western Visayas, areas with relatively shallow water depths of 50 meters, which would allow fixed-bottom foundation wind turbine generation designs, and access to deeper areas for floating in the near future.

So, the reason why this is such the case is because 90% of the countries offshore...

wind potential is actually for floating solar, and the technology for floating solar is not yet readily available.

So, for the available technology, which is fixed-bottom foundation, it's already available, but the areas that will allow it are very limited.

So, these are Manila Bay, Tayabas Bay, and the ones that we have surrounding Guimaras.

But for these areas, for example, for Manila Bay and Tayabas Bay, we have already interconnection points available.

Okay.

Ports available for assembly.

So, these are good sites, actually.

But for example, for Guimaras, higher capacity is available, but it would require more infrastructure, especially in transmission and ports.

So, as we all know, Panay Island faced power shortage earlier this year due to temporary maintenance shutdown of one of their power plants.

So, connecting Panay Island to Negros and Cebu with bigger transmission lines will help solve this power issue, and at the same time, will allow absorption.

And exchange of large-scale renewable energy.

Okay.

So, you mentioned, well, Manila Bay, Tayabas Bay, and Guimaras.

I thought for a moment, this was chosen strategically because of the power crisis in the Visayas where Guimaras can, of course, respond to those needs.

And then you have Luzon.

But really, its capacity, it is the type of areas that can provide, you know, maximum potential in terms of harnessing wind energy.

It is quite surprising.

But we don't have a lot in the Philippines.

Are you looking at other areas as well, still?

We have actually a lot in the Philippines, but the issue with our country is, again, we have really deep waters.

So, for deep waters, the technology is not yet as mature as the ones that can be done in shallow waters.

So, for example, we have good areas in Ilocos Norte.

So, right now, we have onshore waters.

So, we have a lot of wind in the Burgos-Bangui area.

But once you go further offshore, then it will be deeper waters and it would require more floating, similar to the other areas in Guimaras.

I think the issue why we didn't include Ilocos is because they have small ports.

And if you have small ports, that means that more infrastructure investment is needed in that area.

So, the nearest port in that area where you can assembly is not that ready for big wind.

So, the biggest problem is that the port is not ready for big wind.

So, the biggest problem is that the port is not ready for big wind.

So, the turbines that we're looking at is around 150 to 250 meters in length.

So, it would require really big ports.

Yeah. I was wondering too, Paula, why no selection in areas like the eastern seaboard, if you will?

I mean, you know, we have a very long coastline there.

Possibly, the wind potential is also encouraging.

Why is that not included in the selection?

And even areas in Mindanao?

So, there could be a lot of potential there as well.

Are we looking at those right now?

So, for the areas in Mindanao, they actually don't have enough wind resource.

It's not as abundant as the ones that we have in the northern areas of the country and also in western Visayas.

For the case of the eastern seaboard, it was avoided because one of the deep waters, but also two,

because it's where the typhoons are strongest.

So, this is where the typhoons come in and they're so strong.

That it might actually damage the turbines.

So, it's not recommended that we put them in those areas.

Okay. Now, Paula, it is said that, you know, 90% of the Philippines' offshore wind technical potential is in deep waters.

So, really, long-term offshore wind market in the Philippines will need to focus on, you know, the floating foundation turbines.

Now, what factors must we consider to tap into this potential knowing how costly this type of project can be?

I mean, is it possible through public-private partnership or foreign investors?

What's the direction there?

So, the DOE actually is currently looking at different types of investment opportunities.

So, right now, we're DOE studying the ports and what types of upgrades can be done to the ports near offshore wind development sites.

Another one is transmission upgrades.

Other than ports and transmission upgrades,

most will be done like on-site studies like the geotechnical, geophysical studies of these sites

to make sure that we're not installing in areas that are protected.

So, these are marine protected areas.

But also, the Philippines opened 100% foreign ownership for renewable energy projects.

So, this actually attracts investors.

So, I think the investment issue that we're looking at right now,

is more on the transmission side and the port side of things.

But on the development side of things,

there is a lot of interest coming in from other countries and international financing institutions

as well as commercial banks for offshore wind.

Okay.

You know, one of the assumptions of your study at Rocky Mountain Institute

also points to the Philippines as having, you know, promising wind potential and high electricity costs.

These are factors making us an ideal market to catalyze.

Are there other countries here that are in a similar situation as ours

that was able to capitalize on wind energy and what was their experience like, if you can share with us?

For the rest of Southeast Asia, not yet.

For example, countries like Vietnam and Indonesia are looking at it as well.

But I think the success stories that we can share, the ones probably in Taiwan.

So, there are a lot of countries that are looking at it as well.

But I think the success stories that we can share, the ones probably in Taiwan.

So, Taiwan has more shallow waters and they have more consistent wind speeds.

So, if you think about Batanes, the wind speeds of Taiwan is similar to the ones in Batanes.

So, they really have good environment for them to install offshore wind.

There's also a lot of interest coming in from foreign companies in Taiwan

to make their case and build a pilot in Taiwan

to show the rest of the region.

What the potential could be for them.

All right. Now, we know that government has, of course, mandated

to prioritize renewable and sustainable energy moving forward now.

Are policies to push this shift adequate?

What's your view?

I mean, how do you think policymakers and regulators should perform?

Do they do more to accelerate offshore wind energy use in the country?

Is there enough encouragement for us to really shift in that direction soon?

Mm-hmm.

So, President Marcos actually signed Executive Order No. 21

to direct the establishment of the policy and administrative framework

for offshore wind development in the country.

And after that, EO21, the DOE and DNR has been working closely

to work on permitting requirements and other policies needed to make this happen.

I think what we need to do is to make sure that these policies are in place.

I think what we need to do is to make sure that these policies are in place.

I think what we need to do is to make sure that these policies are in place.

But one of the things that needs to be done, will be more push on the DOE side

to give NGCP more nudge, to upgrade the transmission lines

because regardless if you have these offshore wind zones or not,

if there's no place or if there's no line to connect it to,

then it won't go to the consumers.

It's a challenge, I would imagine.

the Philippines, maybe a scale of 1 to

10, 10 being

optimized, and

1 being just starting.

Where are we right now?

I think we

are around 4 or 5

right now, so we're laying all the

foundations, all the ground. That's already a

considerable score

at 5, don't you think?

Yes.

Maybe I'm being optimistic, but

maybe also because I see

how hard DOE

and PNR and the other

government agencies have been working on this one.

But

they're laying

all the foundation, they're laying all the

groundwork, they're accepting

all the help they can get

from different CSOs and

even foreign government just to

really prepare ourselves for offshore wind

development. And it's a matter of

identifying, okay,

which ports do we invest on first?

Which transmission line do we

expand first?

All right.

Finally, you know, offshore wind is just

one of the many options the government

is looking into right now. In fact,

a mix of renewable energy, clean

energy, and even nuclear energy.

They're even considering

those possibilities. Now, if you were to make

a pitch now for offshore wind,

what would be your best case

argument for this?

I believe that

offshore wind

is one of the best types of

renewable energy available because

it provides us with

economies of scale that

would provide us with

more electricity over the

course of many years in the

Philippines. It is capital

intensive, yes, but

the return would be much

greater once we have done the

investments early on.

All right. On that note, we end

this conversation. Again, thank you so much for joining

us today. Paula Valencia,

Rocky Mountain Institute,

Senior Associate. It was great talking

to you. Thank you so

much, Daniel.