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16 November 2022

Philippines produces 31 GW offshore wind out of a hat, India also

It was something of a double take earlier this week when the Philippine government suggested it might authorize 31 GW of offshore wind development. The Indian government then promptly announced a draft tender for 4GW of offshore wind tender off the country’s south coast in Tamil Nadu.

The trigger for the Philippines government was the idea that it could spawn a green hydrogen industry that might export to surrounding Asian economies.

The Department of Energy said that the Philippine President had 42 approved offshore wind contracts which the private sector would now lap up, including developers from Denmark, Norway, and even the UK.

This shows perhaps how much influence that the World Bank has in ASEAN as a 300 page report it produced in April identified as much as 178 GW of total offshore wind potential in the Philippines, and recommended developing something like 21 GW urgently. That report suggested that 90% of the 178 GW was in deep water, so this will require floating platforms, which may take a while longer to arrange, but that around 18 GW was in water only 50 meters deep. It looks like the Philippine government will develop even more floating platforms sooner than the World Bank anticipated.

The World Bank suggested 6 clear zones and said that a high growth scenario would lead to 20 GW of installed capacity by 2040. The lure of being part of the global hydrogen market seems to have accelerated this considerably. Currently the total Philippines generation capacity is only around 26 GW. We would assume that the World Bank would be prepared to subsidize something close to 20 GW to some extent, just enough to ensure private companies have confidence that they will make a profit.

Currently 80% of Philippine electricity comes from fossil fuels much of it coal and oil as well as natural gas, but with coal on the rise, as it seems to be the cheapest resource for Philippines with little land mass available for renewables.

For a country made up of over 7,000 islands the floating wind route is the right way to go, but the Philippine government has been consistent in stating that it has no money to develop such things. So these auctions will have to be dosed with some World Bank money in order to take root and for any amount of this wind capacity to actually happen, and even then it will take a lot of belief in the Philippine economy going forwards to take on such investments.

Meanwhile the Indian government has issued a tender for its first ever offshore wind auction on the south coast ion Tamil Nadu for 4GW of offshore and is now seeking feedback before the end of November for the industry. India’s entire renewables progress has been hampered by slow transmission build out, and any non-Indian companies will have to have strong assurances about connectivity before they will commit to building out offshore in India.

The government plans to offer five blocks from 655MW to 912MW, sitting between 10 km and 39 km off the coast, where they can all have fixed foundation structures. That coastline boasts average wind speeds of over 10 MPS which is key for prime wind sites.