The new $2.7 million order involves the design, procurement, installation and commissioning of a 240 KW wind-diesel system. The new system will supply power to a township on a major island not presently connected to a main electricity grid. AES said the new "wind farm" will provide power for a village, local school, processing plant and a hotel.

"Prior to this, island residents were totally dependent on diesel fuel for their electricity requirements, which proved unreliable, costly and damaging to the fragile local environment," AES managing director, Stephen Phillips said. "The new wind-powered system will tap into the ideal natural resource of substantial ocean breezes."

The advanced off-grid power system will be implemented in two stages over the next 12 months. On completion of the first three "windmills", further negotiations will take place for additional systems which could result in a further $2.5 million worth of contracts for AES on this project alone, the company added.

"The Philippine Government has an aggressive plan for island electrification and is

keen to implement renewable energy technology wherever possible. There is the potential for an additional $10 million of other renewable energy projects in the area over the next 12 months and AES hopes to acquire many of them," Mr Phillips said.

Mr Phillips added the new contract is in line with the company's goal to use its core technology, "power electronics", in distributed power plant projects (projects which are not connected to main grid systems). "There is massive growth potential in the distributed power generation market, and AES is at the forefront of the technology required to convert and deliver this energy at minimum cost and with maximum efficiency," he said.

AES has offices in Australia, India and the USA and has projects in more than 20 countries around the world.