Philippines’ oil & gas company proposing to build three gigawatt-scale offshore wind projects

PetroGreen Energy Corporation, a renewable energy arm of the Philippines’ oil and gas company PetroEnergy – which unveiled last year that it was in collaboration with a foreign partner to expand its footprint into offshore wind – is proposing to build three gigawatt-scale offshore wind projects in the country.

The Philippines’ Department of Energy cleared the projects for system impact studies with the National Grid Corporation of the Philippines (NGCP) last month, allowing the NGCP to assess their impact on the national transmission system.

In 2021, the Department of Energy issued the same clearance for 14 other offshore wind developments. Of the 17 offshore wind proposals listed, PetroGreen’s three projects are among the five that are in the gigawatt range. The other two offshore wind farms of this scale are being proposed by companies Giga Ace 7 and Gigawind5.

The largest of PetroGreen’s developments is the Norther Luzon Offshore Wind Power Project which is planned to have an installed capacity of 2,000 MW. The Norther Luzon wind turbines would spin offshore the Province of Ilocos Norte, in waters off the coasts of the Burgos, Bangui, and Pagudpud municipalities.

The company is also proposing to build a wind farm off the Provinces of Occidental Mindoro and Batangas. Dubbed Northern Mindoro Offshore Wind Power Project, the offshore wind farm would have a capacity of 1,000 MW.

The third project PetroGreen is planning, East Panay Offshore Wind Power Project, would be located in waters offshore the Provinces of Iloilo and Guimaras and would have a capacity of between 500 MW and 1,000 MW.

PetroGreen Energy Corporation already has an onshore wind farm in its portfolio, the 50 MW Nabas Wind Power Project (NWPP), in Nabas-Malay in the Province of Aklan, in which it holds a 40 per cent stake. The first, 36 MW phase of the project has been in operation since 2015 and the company, together with its project partners, is developing its second phase through which it will install 14 MW more.

The parent company, PetroEnergy, is part of the conglomerate of Yuchengco Group of Companies (YGC) and was founded in 1994 to undertake upstream oil exploration and development. In the oil and gas sector, the company is part of a consortium operating several fields offshore Gabon, together with Vaalco and Addax Petroleum, and also has oil projects in the Philippines’ Province of Palawan.

Since its founding, PetroEnergy has diversified into renewable energy and established its subsidiary PetroGreen Energy in 2010, through which it is investing in wind, solar, geothermal and now offshore wind.

Last year, in the outlook segment of its 2020 annual results, PetroEnergy said it had teamed up with a foreign partner for offshore wind: “For the medium term, we are in collaboration with a foreign partner to further expand our footprint into offshore wind power in the country”.

“While volatile global oil conditions in 2020 brought extreme challenge to our oil exploration and development activities, these same conditions validated renewable energy (RE) ventures as important and long term solution to the country’s energy needs”, the company said in the annual report. “Not only is RE less susceptible to supply chain disruptions, but it reduces atmospheric pollution and promotes a healthy environment, which is going to be one of the top priorities across societies, moving forward”.

According to the results, 87 per cent of PetroEnergy’s 2020 revenue came from electricity sales and 13 per cent was brought in by its oil business.

When it comes to the Philippines and offshore wind, the country is now moving forward with tapping into its wind resource at sea, after the first projects emerged at the beginning of 2020 with Triconti Windkraft Group announcing the award of a Service Contract for Offshore Wind Energy by the Department of Energy for two of its projects: Guimaras Strait and Aparri Bay.

The company has now partnered with the Spanish renewable energy giant Iberdrola to develop five offshore wind projects with a combined capacity of up to 3.5 GW. All projects have secured the wind energy service contracts, according to the partners.

In June 2021, upon launching a Philippine Offshore Wind Roadmap project, the Department of Energy said it had awarded five wind energy service contracts by that time.

Along with the Guimaras Strait and Aparri Bay, the government also gave the same rights to the 600 MW Guimaras Strait II, the 450 MW Frontera Bay, and the 600 MW San Miguel Bay offshore wind projects.

These contracts give the developers exclusive rights to undertake studies for the development of offshore wind projects in the country.

According to the list of the projects cleared for the NGCP’s system impact study, the project companies behind the last three offshore wind farms are Jet Stream Windkraft Corporation (Guimaras Straight II), Ivisan Windkraft Corporation (Frontera Bay), and Sitex Windkraft Corporation (San Miguel Bay).

The Philippines are among the eight emerging markets in the World Bank’s report from 2019, which identified 18 GW of fixed-bottom and 160 GW of floating wind potential within 200 kilometres off the country’s coasts.

The government launched the roadmap project together with the World Bank in June last year, in order to establish short and long-term offshore wind targets, formulate strategies to successfully integrate offshore wind in the government’s renewable energy portfolio, and put forth recommendations on policies that are necessary to foster a conducive business environment for offshore wind investors.

The following month, the Department of Energy announced its plans to also collaborate with the Carbon Trust and the Global Wind Energy Council (GWEC) to unlock the country’s offshore wind potential.