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Renewable Energy M&A: Shell forms partnership to develop 1 GW offshore wind farm in the Philippines

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Founder, Enerdatics

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  • Nov 27, 2022
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The company has partnered with Alternergy, a Filipino-led renewable energy company, for prospective development at the Calavite Passage in Mindoro. Alternergy will hold a 60% stake in the JV, with Shell holding the remaining 40%. The partnership “has obtained a wind energy service contract from the Department of Energy to assess the feasibility of the project. The assessment is expected to be completed within a five-year stretch.

According to Alternergy Chairman Vincent Perez, stated that the site of their prospective offshore project, as well as its neighboring blocks, has the potential to host up to 5 GW of capacity. The chairman expressed confidence in the technological innovation currently sweeping across the sector, citing the potential of installing 15 MW turbines. Both companies are also optimistic that the Philippine government would act quickly to address certain barriers to offshore wind development in the country. These include port infrastructure, integration of offshore wind capacities into the grid; demarcating exclusion or security zones for the developed facilities, and financial incentives.

The move marks Shell’s second major renewables collaboration in the Philippines and expands its presence to include onshore and offshore clean energy facilities. In Jul’22, the company partnered with Nickel Asia Corp to develop 1 GW of projects, comprising utility-scale solar PV while also looking into onshore wind and energy storage systems. Shell currently operates a 100 MW solar farm in the country’s Bataan province and is working on pilot geothermal projects in Mindoro and Biliran.

As per Enerdatics research, offshore wind initiatives account for nearly 50% of Shell’s renewables activity since 2017, with a majority of its operational assets and mature development pipeline focussed on Western Europe and the United States. Recent moves include partnerships with fellow oil and gas majors and experienced power companies to develop large-scale projects in Norway, France, and Iberia. In Asia, Shell is developing the 1.4 GW project in collaboration with CoensHexicon and is also exploring other floating wind opportunities with Korea Southern Power (KOSPO).

The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.

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Sanskruti  Rajore's picture
Sanskruti Rajore on Nov 28, 2022

According to the World Bank’s Offshore Wind Roadmap, released in April 2022, the Philippines has a potential to deploy as much as 21 GW of offshore wind capacity by 2040 and 40 GW by 2050. The Department of Energy reported that there are currently 42 approved offshore wind contracts with an indicated capacity of 31 GW, with strong interest from the private sector, including developers from Denmark, Norway, and the UK. Electricity generated by these offshore wind farms will be used to produce alternative fuels such as green hydrogen, which then may be converted into ammonia.

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