Table of Contents
On November 25, the Department of Energy (DOE) announced the launch of the fifth round of the Green Energy Auction Program (GEA-5). This edition focuses solely on awarding contracts for 3,300 megawatts (3.3 gigawatts) of fixed-bottom offshore wind (OSW) capacity, with projects expected to be operational between 2028 and 2030.
The GEA-5 is now slated for the first half of 2026, about 190 days after the delayed release of the notice of auction. DOE Secretary Sharon S. Garin highlighted the significance of the auction, saying it “pushes offshore wind from potential to reality. With clear rules, milestones, and dedicated infrastructure planning, developers can now move from early studies to bankable projects.”
The announcement also included the official notice of auction and detailed terms of reference (TOR), which lay out the requirements and guidelines for prospective developers. These specify that projects must supply power for 20 years and provide updates on bid and performance bonds, as well as the rules for green energy tariff entitlements. Certificates of award for successful projects are expected to be issued starting in 2027.
To provide developers with clear pricing guidance, the Energy Regulatory Commission (ERC) is set to release the Green Energy Auction Reserve (GEAR) price within 30 calendar days of the auction notice. The GEAR price establishes the maximum allowable rate, in pesos per kilowatt-hour (kWh), and acts as the ceiling for bids in the auction.
Former ERC Chair Monalisa Dimalanta acknowledged that the Philippines’ OSW program has faced several reality checks since its inception. She noted that while the World Bank’s 2022 Offshore Wind Roadmap identified a massive technical potential of 178 gigawatts (GW), mostly floating OSW, the agency projects the country could realistically achieve just over 20 GW by 2040 in a high-growth scenario or only 3 GW under low-growth assumptions.
She added that extensive groundwork has been laid for OSW development. Executive Order No. 21 set the policy framework under the DOE. In 2024, the Asian Development Bank (ADB) advised the ERC on regulations and potential GEAR Prices, while the Global Wind Energy Council (GWEC) completed a supply chain analysis. In 2025, the DOE issued a permitting guidebook, and risk-sharing recommendations suggested public sector financing to lower costs.
“Clearly, the work required for a successful OSW program is at a scale that has not been seen since the Philippine power sector was restructured under the Electric Power Industry Reform Act of 2001,” wrote Dimalanta.
Still, she pointed out that “heavy lifting” is needed to address remaining critical issues.”
(Also read: Good Intentions, Bad Outcomes: The Cost of Misguided Climate Activism)
Top challenges to PH’s OSW
Below are the top issues that explain why OSW may not be the most practical path for the Philippines at this stage.
- Port capability
One of the key issues of OSW deployment in the country is infrastructure readiness. Manila Times columnist Ben Kritz underscored that the Philippines’ ports were never designed to handle the sheer scale of OSW equipment. He noted that “the blades of an offshore turbine are typically about 80 meters in length, with the biggest ones topping 100 meters, and can weigh between 5 and 12 metric tons,” and that other components add even more size and weight.
Only a small number of ports can take cargo of this magnitude, he pointed out—and many of them sit far from the areas where OSW projects are proposed.
According to Dimalanta, the DOE’s decision to limit which public ports will support this auction round is understandable because it is impossible to cover every potential site that GEA-5 bidders might identify. However, this limitation also reduces the number of developers who can realistically take part.
Of the 92 OSW service contracts awarded as of 2024, only a small portion would meet the practical requirements for joining GEA-5. These would be projects that use fixed-bottom technology, are located near the two Philippine Ports Authority (PPA) ports identified for OSW handling, specifically Pambujan Port in Camarines Norte and Sta. Clara in Batangas, and are already at a stage that could reach commissioning between 2028 and 2030.
“Will there still be a good number to make for robust competition?” questioned Dimalanta. With such a limited pool of eligible projects, the auction could end up with only a few participants, which might reduce competitive bidding and limit the overall efficiency and value of the auction process.
- Transmission availability
Grid integration remains one of the biggest hurdles for OSW in the Philippines. The National Grid Corporation of the Philippines (NGCP) has identified connection points capable of handling over 30 GW, but developers are tasked with linking turbines to the grid, adding both cost and complexity.
According to the Makati Business Club (MCB), many sites still lack high-voltage transmission, and building a 300-kilometer line could take up to seven years because of right-of-way issues.
“While transmission availability for OSW has been considered, the system operator must also prepare to integrate OSW capacities in the power mix,” stressed Dimalanta.
ADB’s Technical Assistance Consultant’s Report in 2024 highlighted that access to transmission capacity is a critical risk that must be managed to ensure the success of OSW projects. The report stressed the need for clear assurances on infrastructure and grid readiness at key connection points.
“Given OSW integration will increase variable renewable electricity in the Philippine supply mix, the Philippine Grid Code (PGC) should be suitably amended to address operational constraints in the transmission network,” it recommended. Without sufficient capacity to deliver this additional generation, including OSW output, higher levels of renewable penetration could trigger grid congestion and operational bottlenecks in the future.
- Significant costs
Dimalanta referred to OSW’s high costs as the “biggest elephant in the room.” She explained that while the ADB report, using 2023 data, projected the GEAR for fixed-bottom OSW at ₱11 to ₱15 per kWh by 2030, this figure does not provide the full cost picture. “…a full-system cost analysis will need to be done for transparency and prudent decision-making,” she wrote.
In comparison, solar PV generates electricity at only ₱2.50 to ₱3.50 per kWh, making OSW at least four times more expensive.
GWEC noted that OSW projects demand a significant upfront investment, typically between $3 million and $4 million per MW. To support these projects, GWEC encouraged the government to expand carbon markets and renewable energy certificates, while also developing a local supply chain for key components.
“Offshore wind is the most capital-heavy renewable technology in the pipeline,” warned Rappler’s Val Villanueva. “…the real story that separates this decade from the next is not solar, not onshore wind, and not even geothermal — it is offshore wind. Its economics, price impact, and timing will determine whether the Philippines sails smoothly into the renewable future, or locks itself prematurely into decades of elevated costs.”
Globally, OSW remains the costliest utility-scale renewable, with levelized costs between $72 and $140 per MWh, significantly higher than onshore wind, which ranges from $24 to $75 per MWh.
Depending on the type of installation, whether bottom-fixed or floating, industry players estimate that investment costs could range from $3 million to $7 million per MW, according to Myrna Velasco of the Manila Bulletin. “Project sponsors point out that investment costs can escalate based on a range of factors, from water depth and distance from shore to the complexity of infrastructure deployment and regulatory hurdles, including complicated permitting processes,” she pointed out.
- Future electricity hike
Villanueva stated that GEA-5 will introduce 3.3 gigawatts of renewable capacity, making it one of the largest clean energy projects in the Philippines. He added that the initiative comes with a high price tag, as tariffs are projected to reach around ₱12 per kWh.
“2030 is the year when the Philippines pays the ‘entry fee’ for large-scale renewable energy,” warned Villanueva. “This spike is not a sign of market failure. It is the natural economic profile of green transitions worldwide: upfront pain for long-term payoff.”
He noted that even if the costs of OSW are spread out over time, consumers will still bear a significant burden in the early years, facing higher generation charges, increased system fees to cover capital investments, and extra expenses for grid integration.
Meanwhile, Eduardo Araral, an associate professor of Public Policy at the National University of Singapore, cautioned that the substantial investments needed for OSW ports could deepen inequality. “As recent data shows, lower-income households in countries with energy poverty can spend between 10-40% of their income on energy, and the cost per kilowatt-hour is significantly higher for them, especially when relying on renewable sources,” he stated, highlighting the disproportionate impact on vulnerable communities.
(Also read: Calbayog Draws the Line Between Green Power & Green Spaces)
Should we aggressively pursue OSW?
As the Philippines pushes forward with renewable energy development, it must carefully consider the implications for an emerging economy like ours. Resources are limited, and any misallocation, particularly in a system still struggling with inefficiencies and corruption, could burden the economy rather than strengthen it. Investments that fail to deliver tangible benefits, or worse, impede growth, risk diverting attention and funding from more urgent national priorities, such as alleviating poverty, improving public health, and expanding access to electricity for underserved communities.
With this in mind, policy decisions should aim to lower, not raise, electricity costs. Even temporary increases can have a disproportionate impact on low-income households, who would feel the strain most acutely. Locking the country into high-cost projects like OSW based on uncertain future outcomes is not only economically risky but socially unfair, as it shifts the burden onto those least able to bear it. Any energy strategy must balance long-term goals with immediate realities, ensuring that progress does not come at the expense of the most vulnerable.
For Velasco, OSW comes at the wrong time, as many Filipinos are struggling to make ends meet. “While Filipinos are being told to feast on crumbs for a ₱500 noche buena this Christmas, how can anyone expect us to stomach a power capacity addition that will compel consumers to pay a gut-wrenching ₱14 per kWh for offshore wind?” she asked. “This energy source is being served like a luxury entrée to a populace already choking on financial survival.”
On a similar note, Manila Times columnist Charlie Manalo emphasized that in a country where many households still struggle to afford electricity, a more practical approach would be to expand onshore wind capacity first and introduce OSW gradually, ensuring strict controls on costs and environmental impacts.
“Wind power is set to play a vital role in the Philippines’ clean energy future,” he asserted. “However, ‘clean’ should not come at the expense of affordability, and ‘renewable’ should not cause harm to communities.”
Sources:
https://plus.inquirer.net/opinion/introducing-osw-into-ph-power-system/
https://www.bworldonline.com/economy2025/11/25/714575/offshore-wind-auction-now-set-for-next-year/
https://www.manilatimes.net/2025/06/22/opinion/columns/tilting-at-windmills/2137401
https://www.adb.org/sites/default/files/project-documents/55140/55140-001-tacr-en_6.pdf
https://solarinstallph.com/pages/solar-install-guide
https://mb.com.ph/15/12/2024/doe-to-slash-offshore-wind-performance-bond-to-5
https://mb.com.ph/2025/12/08/who-wants-to-pay-14kwh-for-offshore-wind