Laguna Lake’s floating solar farm in limbo

📷 amazonaws.com

DEVELOPERS behind what is supposedly the country’s biggest floating solar farm are seriously considering backing out of the project amid the government’s failure to give clear direction as to the manner by which they could possibly secure an environmental compliance certificate (ECC) required by foreign lenders.

In its most recent advisory, the Department of Energy (DOE) hinted at a tedious process of securing two-tiered ECCs from the Department of Environment and Natural Resources (DENR).

Under this process, the sponsor firms of the offshore wind farm projects would first have to secure an interim ECC during the pre-development phase; then an enhanced ECC at the commercial development stage of the projects.

Not So Soon

According to Energy Undersecretary Sharon Garin, the guidelines for the application process as well as warranted issuance of ECCs to offshore wind installations will be firmed up before the end of this year.

“For now, we are just setting what we need to do and what we will require from the developers during the pre-development stage… that’s an environmental impact assessment, instead of studies and evaluation to be done at ECC, this is a mere checklist that they have to submit as documents. By submitting those documents, we can issue them an interim ECC,” she explained.

Then when the outcome of their wind resource assessments would warrant commercial development, she conveyed that the next step for the project developers will be to apply for enhanced ECC.

“That (enhanced ECC) will require a new set of requirements from the DENR… we are scheduling talks for the enhanced ECC which will be required once you start on the development stage. Hopefully, we will have it within the year,” Garin averred.

First Time

Interestingly, Garin admitted that the DOE has yet tried the two-tiered ECC to be enforced on the offshore wind developers.

“In other technologies, there’s no interim ECC, so you are only required in the development stage and they require that for financing,” she noted, while specifying that with the interim guidelines issued under DENR Administrative Order. No 2024-02, the State is hoping that the entire process will end up beneficial to the investors and the requirements for the ECC would be streamlined.

Garin emphasized that for the interim ECC, consultations with the local government units (LGUs) will not be required yet — that will only happen when the investor will already seek ECC for commercial development.

“We do not require LGU consultation in the interim ECC. In the enhanced ECC, that’s when the hard work starts.”

The idea however doesn’t sit well for the industry players who felt more uncertain if the absence of public consultation would do them good – business-wise.

Easing Doubt

The DOE official clarified that the stiff process should not be seen as a bureaucratic red tape or anything to that effect.

“We are scheduled to do an orientation workshop with the developers, especially the developers who signified they want to have their first kilowatt by 2028…, it’s not like we’re trying to make it difficult for the developers but our country will need to protect its resources also,” Garin further stated.

She admitted that the government has yet to decide whether to stick with the ‘programmatic ECC’ or diverge from that permitting model given the hurdles being encountered by floating solar developers in the ECC being applied by the Laguna Lake Development Authority on behalf of the contractors.

“For now, there are many ideas. We have also learned from the LLDA system which is programmatic. We have seen problems in the programmatic (ECC), but we still need to review how we assess on the offshore side,” she stressed.

DOE also sought clarification from the LLDA which has been applying a singular ECC for all the floating solar farm developers.

Looking Back

Previously, Philippine Solar and Storage Energy Alliance Chairperson Tetchi Cruz-Capellan expressed concerns over the project finance-raising activities amid what they claimed as uncertainty on the aspect of ECC issuance.

According to Capellan, their inability to secure an ECC has been preventing them from securing funds from financial lenders, with special mention of the foreign banks.

She also took a swipe at the so-called “Certificate of Conformity” that the government wanted to issue in lieu of the ECC.

“Our dilemma is: the banks might not accept that – because a ‘certificate of conformity’ by its very nature is not an ECC, so that’s our hurdle with a programmatic ECC,” she lamented.

For local banks, she conveyed that the solar project sponsors already had discussions with the Board of Investments (BOI) that the remedy is to ask the Bangko Sentral ng Pilipinas (BSP) to issue a Circular that shall “confirm that the certificate of conformity issued by LLDA to the developers, is valid.”

Too Snobbish

According to Capellan, they went as far as seeking an audience with Environment Secretary Maria Antonia Loyzaga over their long standing request for an ECC to proceed with the project. However, the DENR chief told them to go to the Department of Finance for concerns regarding foreign lenders.

Apart from financing, Capellan stated that a ‘programmatic ECC’ will also bring more problems to the developers, “because if one of the proponents will under-perform, the overall project risk for everybody will become higher – so it becomes a case that: the sin of one is the sin of all.”

And on the sphere of the actual application for ECC, if one of the developers will be delayed in meeting all the requirements for the filing, then all the projects will be delayed because we will just be relying on a single ECC to be secured by LLDA.

“We will just have one application for ECC – so if one project-developer is delayed, then all of us will be delayed, because we tend to wait for each other when our peers could complete their requirements, so it becomes a common risk for everybody,” Capellan expounded. (ANGEL F. JOSE)