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Business

PetroEnergy betting big on offshore energy

Danessa Rivera - The Philippine Star

MANILA, Philippines — PetroEnergy Resources Corp. (PERC) is betting big on offshore wind and the synergies within the Yuchengco Group of Companies (YGC) with the 500-megawatt (MW) expansion of its renewable portfolio in the next five years.

PERC is eyeing to add 100-MW of new solar projects in the next two years and 300-400 MW in the next three to four years, PERC vice president Francisco Delfin said during the Rizal Commercial Banking Corp. Sustainability Forum on Wednesday.

But in the long term, the company sees massive opportunities in offshore wind as it has no limitation on size and accessibility versus solar, and more areas available for development unlike geothermal, he said.

“We are betting on offshore wind not just for PetroEnergy but also for the country because of the advantages that offshore wind brings to scaling up renewable energy generation,” the company official said.

The company also believes large scale offshore wind can also boost the energy security of the country.

“So, we believe and we support the Department of Energy’s action to promote large-scale offshore wind development,” Delfin said.

PERC believes it is uniquely positioned to invest and exploit opportunities in offshore wind given its involvement in offshore energy operations in Gabon with partner US-based Vaalco Inc. and its experience in power development.

The company has the entire YGC to back it up in developing offshore wind projects, Delfin said.

“We think we have the resources and the opportunities not just within PetroEnergy but within the wider YGC Group to profit from these long-term investments,” Delfin said.

He cited construction firm EEI Corp., which is “fairly well known for large-scale construction;” Mapua University which can provide technical skills and manpower; Malayan Insurance Co. Inc. to mitigate risks; and RCBC to provide financing for such scale of project.

PERC sits as a member of a steering committee to develop rules and a roadmap for offshore wind development, which could reach parity in five years’ time.

“Both the private sector and the government through the DOE are working with the World Bank and other international donors to capture rules to govern this emerging market. It’s very important to get the institutions right to make sure that private investments will be attracted,” Delfin said.

While rules are being formed, PERC and other offshore wind developers are given a window to undertake five-year pre-feasibility works – which include technical and commercial studies – before going on full-scale construction and development.

Offshore wind is competitive in Europe, US and parts of Asia.

“Right now, in the international market, (cost) has lowered to about $3 million to 4 million per MW. Bloomberg Finance predicts that it will be reduced over the next five to 10 years. So, it’s too early to make actual cost comparison with the Philippines,” Delfin said.

The DOE recently cleared PetroGreen Energy Corp. (PGEC), the renewable energy arm of PERC, to proceed with grid impact studies for a 2,000-MW offshore wind project in Ilocos Norte, a 1,000-MW offshore wind project in Occidental Mindoro and Batangas, and a 500-1,000-MW offshore in Iloilo and Guimaras.

Renewable energy now accounts for 85 percent of PERC’s business and revenue from its 140-MW portfolio. This consists of the 20-MW Maibarara-1 and 12-MW Maibarara-2 Geothermal Power Plants in Batangas, the 36-MW Nabas Wind Power Plant in Aklan, the 50-MW Tarlac-1 Solar Power Plant in Tarlac, and the 20-MW Tarlac-2 Solar Power Plant.

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