Philippines: North Wind Bangui Bay Project - Phase I
(Prototype Carbon Fund)
UNFCCC Reference No.: 0453
2 Project Documents The Philippines is taking a major and innovative step into a new renewable energy era with the signing of the first greenhouse gas emission reductions purchase agreement (ERPA) for a wind farm project in the ASEAN region, under the Clean Development Mechanism (CDM) of the Kyoto Protocol. The wind farm project has a total cost of about US$35 million, with almost 90 percent funded by the Danish International Development Agency (DANIDA). The project is expected to be operational by mid 2005. The NorthWind Bangui Bay Project will be located in the foreshore of Bangui Bay in Ilocos Norte Province at the northern tip of Luzon. It is being built at a remote part of the Luzon grid which is plagued by expensive but unreliable power supply, mainly due to the long-distance transmission of power from various generation sources. The project consists of 15 state-of-the-art wind turbines, totaling 24.75 megawatts. Annual energy production is estimated to be about 74.48 gigawatt hours. The project sponsor is a local private company, NorthWind Power Development Corporation (NWPDC). The Philippines 2001 Electric Power Industry Reform Act (EPIRA) stressed the development and utilization of indigenous and renewable energy resources, to tackle the country’s dependence on imported oil and coal for power generation. According to Environment Secretary, Michael Defensor, “Projects such as this will help the Philippines achieve its commitment to reduce GHG emissions and benefit through its participation in the CDM under the Kyoto Protocol.” NWPDC will construct a 50-kilometer, 69 kilovolts overhead transmission line to deliver the power to the switchyard of the off-taker, in Laoag City. All power produced will be sold to the Ilocos Norte Electric Cooperative (INEC) which has the exclusive franchise to distribute electricity in the area. Niels Jacobsen, NWPDC President and Chief Executive Officer said, “We are very happy to be a part of this groundbreaking endeavor. The first of its kind not just in the Philippines but in the whole ASEAN region as well, this priority project will not only provide clean, reliable, new and renewable energy to the communities covered but will also provide job opportunities for the locals, generate business from tourism, and attract industries to set up their business in the area.” The electricity produced by the Project will be exported to the Luzon grid and will displace highly polluting diesel-based power generation at the margin, thereby reducing emissions of GHG and other air pollutants. The emission reductions (ERs) generated by the project will be purchased by the Prototype Carbon Fund (PCF), a public/private partnership, made up of six governments and 17 private companies, which authorizes the World Bank, as Trustee, to purchase ERs from projects on behalf of the participants of the fund. Over 10 years of project life, the PCF will purchase a total amount of ERs targeted at 356,000 tons of carbon dioxide equivalent (CO2e). This vote of confidence in wind power could not have come at a better time. In 2002, the World Bank published the Air Quality Monitor showing that air pollution in the Philippines is causing serious health problems and lower productivity, severely impacting the Filipinos’ quality of life. Moreover, there are global warming concerns arising from increasing greenhouse gas emissions. The shift from fossil fueled power generation to renewable energy like the NorthWind Bangui Bay Project is a key step to achieve greenhouse gas emission reductions, which would contribute to better air quality.
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