The Department of Energy announced that they are planning to revise the investment package offered to potential wind farm operators in the country. Based from what I’ve seen, they seem to be more inclined to seek foreign investors to build wind farms rather than get local companies. This is because they’ve said that the main drawback to investors is the constitutional provision that prevents foreign ownership of properties in the Philippines. I doubt it if they can change that, they need a Constitutional Assembly to change that or a 3/4 vote by Congress[source].
When I saw however the list of potential investors, they sure looked “local” to me as some of them are known “local” brands:
PNOC-EDC, Transnational Diversified Corp., Asia One Power Corp., Cammon Windsolar Energy Inc., First Gen Renewables Inc., Benguet Corp., Nation Petroleum Corp., Trans-Asia Renewable Energy corp. and Coastal Power Development Corp. [source]
I guess that meant that that was what was preventing foreign investors from investing. Not that that has ever been a notable hindrance to foreign companies ever investing in the country.
The DOE had intially offered rights to the development of 16 sites as a Wind Farm in:
Carmen and Oslob in Cebu; Bago City and Cauayan in Negros Occidental; Allen-Lavesares and Calbayog City in Northern Samar; Siquijor; Pasuquin, Ilocos Norte; Bantay, Ilocos Sur; Bani and Bolinao in Pangasinan; Maconacon, Isabela; Tagaytay, Cavite; San Andres, Quezon; and Mercedes and Daet in Camarines Norte.[source]
Looking at the sites, I’d say some of them are in the typhoon prone areas. Investors must ensure that their Wind Farms are well equipped enough to handle the 20+ average no. of typhoons that visit the Philippines yearly.
While browsing through the archives of the DOE, the 16 sites above are said to have a potential to produce about 345 MW of power.
According to the dated article the incentives offered were:
Waiver of production bonus on the first project and payment of production bonus to the Government only after the project has fully recovered pre-operating expenses as stated under Executive Order 462, the law encouraging private sector participation in the exploration and development of ocean, solar and wind energy resources. As well as income tax holiday, reduced duty rates for imported capital equipments and other Board of Investments (BOI) mandated incentives.[source]
Financial assistance offered at that time:
- From the Development Bank of the Philippines: Wind Energy Financing Program, RE Project Preparation revolving Fund, Rural Power Project for Type A Beneficiaries, Rural Power Project for Type B Beneficiaries and CDM Initiatives.
- The United Nations Development Programme-Global Environment Facility (UNDP-GEF) offered help in project preparation and loan guarantee for the project.
- Philippine Export and Import Bank (PhilEXIM) gave loan guarantees to some select wind projects
According to a study conducted by the US Dept of Energy. The Philippines has a 76,000 MW wind potential capacity in an area of 11,000 sq. km. From the provinces surveyed, 47 of them have a potential to produce at least 500 MW while 25 can produce at least 1000 MW.
A different study conducted by the WWF said that the Philippine potential is 7404 MW in 1038 surveyed sites. The results in that study showed the potential capacity for the 3 major islands in the Philippines:
- 4900 MW capacity in 686 wind potential sites in 28 provinces in Luzon island.
- 2168 MW in 305 potential wind sites in Visayas chain of islands.
- 336 MW in 47 potential sites in the Mindanao island.
Even though Mindanao has the least energy generating potential based on the report, the good thing about it is that it is a known typhoon free area. The downside however is that it is also the food basket of the country known for its agriculture. You would most likely be competing against farm lands (which you have to convert to industrial land to be exempted from land reform.) If the potential site is in the coastal area, you would most likely be competing against commercial fish growers and their fish ponds.
Update: List of Philippine Wind Power Projects can be found here.
Category: Wind
April 22nd, 2007 at 12:31 am
Hmmm, that competition thing sounds odd. Since only 2-5% of the land within a wind farm’s outer boundary actually needs to be used for the turbines, access roads, etc., it should be possible to combine it with agricultural production. If you are correct about the law, I think it needs to be changed.
Regards.
Thomas O. Gray
American Wind Energy Association
www.awea.org
risingwind.blogspot.com
April 22nd, 2007 at 12:58 am
Hi Tom! Competition in a sense for exclusive use. But if you could get to partner with existing farms for joint land use I am assuming that would be swell.
Foreign land ownership in the Philippines is a sensitive issue, the previous president tried to reverse the land ownership rule and was met with public outcry and opposition.
Thanks for dropping by
April 22nd, 2007 at 1:07 am
Hi Marc! Glad I caught you. In the U.S., it is pretty common for wind farms to be built on land that is used for farming or ranching. It’s a terrific deal for farmers, who can realize income of $2,000 to $4,000 US per year or more per megawatt (MW) of wind power capacity installed (typical turbine sizes here are 1.5 to 2.5 MW at present. We have a few photos showing furrows that have been plowed right up to the base of the turbines. It is also typical for the wind farm development company to NOT own the land, so foreign ownership, at least in theory, shouldn’t be too much of a problem.
Regards,
Tom
April 23rd, 2007 at 2:03 am
Thanks Tom! That’s very good insight you brought to this post… that way land owner and the wind farm can jointly prosper and save the earth while they’re at it
But I think that might be more easier said than done. In terms of land ownership in the Philippines, from what I know, whoever owns the property owns all the structures on it. So even with a long term lease on the land, once it expires, all those wind mills will go to the land owner. Unless of course they take it down and its stipulated in the lease contract that the lessee owns the non fixed structures. But all that can be solved if the windfarm operator buys the land itself.
:D
April 27th, 2007 at 9:41 am
Marc,
I came across this information during one of my subjects here in the Australian National University (subject name: Commercialisation of R&D). I thought it was pretty nifty and might be of great value to the Philippines. Unfortunately, I do not have the right connections, so perhaps you might make better use of this information (if you don’t know it yet!).
There is a technology business incubator here in Canberra, AUS that presently has, as one of its tenants, a start-up company called Windlab Systems which was founded by a couple of PhD-holding physicists. The technology that Windlab have is interesting as it makes use of a multitude of atmospheric data to generate a highly accurate “wind model” of a particular area. Based on this model, they can recommend the best configuration and position of turbines that allows it to make the most of the wind in that area.
April 28th, 2007 at 1:54 am
I wonder how much data they have to get to plug into the system? I’m assuming that it should be about a year longs worth of data in order to cover all the seasons
April 28th, 2007 at 3:30 pm
From what I got during the presentation, traditional measuring systems take a year. Windlab says it can do it in much less time and with higher accuracy.
http://www.windlabsystems.com
April 30th, 2007 at 5:08 am
Wow, that’s truly ground breaking results if you can cut down site selection time