On Tuesday, SunEdison announced a joint framework agreement with Aboitiz Power to jointly explore, develop, construct and operate up to 300 MW of utility-scale solar PV projects in the Philippines over the next three years.
The company says that this cooperation will leverage Aboitiz' extensive utility-scale experience in the Philippine power market, as well as SunEdison's PV technology and deployment capabilities.
The companies aim to develop their first project in 2015, and projects will be sold to a yieldco vehicle. SunEdison has not clarified if this will be TerraForm Power or a future yieldco.
This follows only four weeks after SunEdison signed a joint venture agreement to build and own up to 1 GW of PV in China, as well as big wins in solicitations for PV in several Indian states. We've been present in Asia for nearly five years now, we have our strategy to diversify into various markets that make sense, SunEdison Asia Pacific President Pashu Gopalan told pv magazine.
Strong market fundamentals
Gopalan cites strong market drivers for PV in the Philippines, including a growing demand for power and some of the highest electricity prices in Asia. It is a country where solar can be competitive with almost no subsidy, he explains.
Gopalan also notes that renewable energy is a priority for the government of the Philippines, and describes the nation's feed-in tariff as an enabler for the growth of PV. It gives you some comfort because you do have the visibility into a long-term contract, notes Gopalan. He stresses that this factor is more important than preferable pricing.
The government of the Philippines has been discussing increasing the cap on the nation's feed-in tariff to 500 MW, and Gopalan expects a several hundred megawatt PV market for the next few years.
In the longer term, Gopalan predicts a growing PV market in the nation, regardless of policy. The feed-in tariff is interesting, but it's an enabler, and is not going to be a big requirement a few years from now, he explains.
Gopalan also notes the strong potential for PV-diesel hybrid solutions on the Philippines' thousands of islands, many of which are not connected to larger grids. The immediate economics of diesel hybrids in the Philippines can be very compelling.
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