Feasibility concerns prompt Alternergy to return wind energy service contract

ALTERNERGY Holdings Corp. announced on Wednesday that it will return the wind energy service contract (WESC) for its Calavite Passage offshore wind power project in Occidental Mindoro to the Department of Energy (DoE) due to feasibility concerns.

“The WESC covering the Calavite Passage located offshore and onshore Occidental Mindoro will be returned to the DoE pursuant to our obligations under the WESC while the development of the three Tablas Strait WESCs will be further explored,” Alternergy President Gerry P. Magbanua said in a stock exchange disclosure.

The project was through the company’s joint venture with Shell Overseas Investment B.V., through its wholly owned subsidiary Pililla AVPC Corp. The deal was signed in November last year.

The Calavite Passage offshore wind project covers 78,000 hectares northwest Mindoro and Lubang Island.

The joint venture has concluded the preliminary studies and initial assessment on the technical feasibility of the four offshore WESCs awarded by the DoE.

Alternergy said that the study aims to initially screen possible locations and determine the best sites for the offshore wind development over the contract areas.

“As with any offshore wind development, preliminary studies are used to understand the complexity and feasibility of the contract areas to select the best sites for development,” Mr. Magbanua said. 

The results of the study for the Calavite Passage offshore wind project identified “several technical issues that could potentially make the development unfeasible at this time given the available technical innovations and market conditions,” the company said.

Mr. Magbanua said that the other three sites are found to be feasible for offshore wind development exploration. The projects are situated over the Tablas Strait which was issued to Tablas Strait Offshore Wind Power Corp.

In February, Alternergy said it was awarded the three separate WESCs for the wind projects which cover about 120,000 hectares.

At present, the Energy department has awarded a total of 82 offshore WESCs, with a potential capacity of 63.359 gigawatts.

Alternergy aims to develop up to 1,370 megawatts of renewable energy sources such as onshore and offshore wind, solar, and run-of-river hydropower.

On Wednesday, shares of the company closed at P0.71 apiece. — Sheldeen Joy Talavera