Fair Winds blow for Ilocos Norte’s Wind Farms

Sep 8, 2014

by By Mike Baños, Editor-at-Large Photos by Mike Baños & Alaric Yanos, PGIN


There’s a fair wind blowing for the windmills of Ilocos Norte as investors rush to fill the gap in electricity supply for the Luzon grid and make a pretty penny besides with feed-in tariffs from the government.


The DOE estimates electricity demand in Luzon grid would increase at an average annual growth rate (AAGR) of 4.13 percent, to 10,693 MW in 2020 and further to 16,477 MW by 2030.


EDC President and Chief Operating Officer Richard Tantoco (5th from left) leads the groundbreaking ceremony of a $300 million (P12.3 billion) wind power project, located in the town of Burgos, Ilocos Norte. Also in photo are officials of its partner-companies, Vestas and First Balfour, Ilocos Norte provincial officials led by Board Member Mariano Marcos II (4th from right), Director of Renewable Energy Management Bureau of the Department of Energy Mario Marasigan, and Burgos Mayor Cresente Garcia. (photo courtesy of EDC)


Besides committed power projects, the grid still needs an additional 8,100 MW (6,000 MW baseload and 2,100 MW peaking) to meet the electricity demand and the required reserve margin of the grid. A total of 869 MW committed projects are expected for commissioning this year until 2015. Of these, 113 MW will be from renewable energy.


“Lately the weather pattern has returned to the Pacific and middle area of the archipelago,” Ilocos Norte Gov. Imee Marcos noted in an exclusive interview with reporters from Cagayan de Oro and Cebu during a recent familiarization tour of the province coordinated by provincial tourism office, Cebu Pacific Air and JG Summit Holdings. “The wind people have been studying it and sabi nila that’s the kind of wind that they need and secondly I think there’s a lot of financing available for renewable energy.”


A mere hour and a half drive from the capital city of Laoag, the Bangui Windmills started with 15 wind turbines in June, 2005 following an extensive wind resource analysis and mapping study by the National Renewable Energy Laboratory (NREL) in 1996.


Northwind Power Development Corp. (NWPDC) developed, maintains and operates the project, while Vestas Wind Systems, a Danish firm, supplied the wind turbine-generator units (WTGs) for the site.


In 2006, the project produced a five percent discount of the weighted average price in the wholesale electricity spot market (WESM) or a generated savings of approximately USD1.4 million (PhP 70 million) for electricity consumers of the Ilocos Norte Electric Cooperative (INEC).


Phase II added 5 more wind turbines to raise total capacity to 33MW in 2008, increasing the project’s power contribution to Ilocos Norte from 40 to 50 percent. NWPDC expects to complete Phase III with 6 new wind turbines adding a total of 18 MW installed capacity by year end.  


The first in Southeast Asia, the $75-million Bangui wind farm has become one of the main sources of electricity as well as a major tourist attraction for Ilocos Norte.


Two additional installations are now under construction: Energy Development Corporation (EDC) targets 150MW by 2015 in Burgos, and the National Renewable Energy Corp. (formerly UPC Renewables) aims for 81MW in Pagudpud, one of Ilocos Norte’s major tourism destinations.


Once operational, EDC’s Burgos Wind Project will be the largest wind farm in the Philippines. It is being installed on a 600-hectare site covering three barangays: Saoit, Poblacion and Nagsurot, in Burgos town. 


“I think their opening investment was at US$300-million and that’s times three now,” Gov. Marcos noted. “And there are four more approved but we’re also hopefully opening up the solar shortly and  we’ve now activated a small hydro for 2 MW.”


In a disclosure to the Philippine Stock Exchange, the country’s largest geothermal producer said it will install an additional 21 wind turbines in the 87-megawatt (MW) wind farm.


“This raises the total project investment cost to $450 million from $300 million, and once fully completed, increases the total generating capacity to 150 MW from 87 MW,” the Lopez-owned EDC said. 


Aside from the wind farm, the BWP also includes a 115 kV transmission line connecting the wind farm from the Burgos substation to the Laoag substation of the National Grid Corporation of the Philippines (NGCP), as well as the expansion of the switchyard/substations.


A closer look at the EDC wind farm under construction in Burgos, Ilocos Norte


It will augment the Luzon grid’s dependable capacity which needs an additional 4,200 MW in the next ten years due to the projected 4.5 per cent annual increase in electricity demand. It is designed to generate at least 230 gigawatt-hours of electricity a year, enough to supply a million households. It will displace the equivalent of 129,000 tons of carbon emissions or roughly half a million barrels of oil to help mitigate the effects of climate change.


Department of Energy records as of July 31, 2014 show another firm, Energy Logics Phils. of the Delgado Group, has been awarded a service contract for a 120-MW wind power project at Pasuquin East. The firm plans to put up wind farms that can generate a total 420 MW over the next seven years, and a solar power portfolio that can produce more than 250 MW in additional capacity.


Wind power in the Philippines makes up a small percentage of the total energy output of the Philippines. The country’s wind energy sector has significant potential and could provide up to 76GW of power.


The approval of these RE projects is to fulfill the Renewable Energy Act of 2008 which mandates that the government develop the country’s renewable energy resources to promote a shift to more sustainable, reliable and affordable energy.


The approved RE developers are now aggressively pursuing the construction of their projects to benefit from the feed-in-tariff (FiT) rates put in place by the Department of Energy (DOE) to encourage investments in RE power projects. FiT rates are guaranteed fixed prices for RE energy applicable for 20 years that assure the RE developers they will earn and recover their investments.


Engr. Ernesto B. Pantangco, EDC executive vice president and vice chairman (private sector) for the National Renewable Energy Board, said investor interest in the Ilocos Norte wind power projects are driven by expected shortfall in electricity supply in Luzon over the next few years.


 “However, we still need the FiT rates to make the projects viable,” Mr. Pantangco added. The current Feed-in Tariff rate approved by the Energy Regulatory Board (ERC) for wind power projects has been set at P8.53 per kilowatt hour (kWh) and P9.68 for solar.


“Wind power has been our lynchpin because we have it as a natural resource,” said Gov. Marcos. “Unfortunately unlike the extractive industries, the local government and local communities don’t necessarily benefit, so it’s very important to us that corporate social responsibility, the development of supply and value chains, the exploitation first of local resources and compliance with environmental codes be upheld.”  Energy Regulation No. 1-94 stipulates the required assistance to local communities by power developers.


A semi trucks a section of the 90 meter towers for the new EDC wind farm in Burgos, Ilocos Norte.


But the construction boom brought by the RE projects in the province hasn’t been without its issues.


“We’ve been having so much trouble with that because it’s all in the beach and daming nasisirang corals and it’s very, very difficult to work with some of these large corporations because they’re immensely powerful, they go straight to Manila and the local concerns are overturned,” Gov. Marcos said. “It’s really been an issue but there’s so much money being thrown at renewables and a lot of them are here.”


With the Bangui windmill farms and the soon Currimao solar park, Ilocos Norte will soon generate 50 percent of its power requirement from renewable energy. The province’s local energy needs are provided by the INEC whose service area covers the whole of Ilocos Norte which is composed of 2 cities, 21 municipalities and 557 barangays with 135,019 households as of 31 December 2010.


“It’s really important for us because we like to maintain in Ilocos Norte, we’re beyond clean and green and towards zero carbon footprint. I think we’re beyond zero now,” Gov. Marcos said.


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