The Department of Energy (DOE) will start crafting the regulation framework for billion-dollar investments in offshore wind industry development.
According to a Manila Bulletin report, Energy Secretary Raphael Lotilla said that President Ferdinand Marcos Jr. has given the approval to proceed with securing the regulatory framework of the said investments.
Lotilla emphasized that the Marcos administration is invested in attracting massive investments for offshore wind farms in order for the country to maximize the 178-gigawatt (GW) potential of wind power plant installations in the Philippine renewable energy (RE) sector.
The DOE has yet to provide specific details on the tenor of regulation it will be setting out for offshore-wind projects, including possible add-on incentives to investors.
Looking back, the initial integration of emerging RE capacities into the Philippine energy mix was first incentivized with feed-in-tariff (FIT) incentives from 2014 to 2019. The expanded market of RE also received market incentives via the Renewable Portfolio Standards (RPS) policy.
So far, the order from RPS is seen as a market risk mitigation mechanism for RE investments as it will guarantee revenue stream of project-sponsors by mandating industry participants, like sourcing 2.52% of Distribution Utilities’ (DUs) supply from RE-generated capacities.
As for the offshore wind, there are no specifics on the starting point of the incentive scheme whether to start with FIT or the installation will automatically be part of the RPS policy enforcement.
For now, the DOE will follow the issuance of an Executive Order (EO) by President Marcos to streamline the permitting processes for offshore wind projects.
The DOE has issued amendments to the implementing rules and regulations (IRR) of the Renewable Energy (RE) Act of 2008, which allows 100% foreign ownership, as sanctioned by a legal opinion issued by the Department of Justice (DOJ).