The Energy Regulatory Commission (ERC) has raised the Green Energy Auction Reserve (GEAR) price for offshore wind projects to P11 per kilowatt-hour (kWh) under the fifth round of the government’s Green Energy Auction (GEA-5) program.
The new rate is higher than the earlier proposed P10.3859 per kWh. The ERC said the increase reflects updated assumptions on project performance and costs, including capacity factor revisions, port rental fees, fishery compensation, land acquisition or rental expenses, as well as inflation and foreign exchange movements. Some cost components, such as equity returns and decommissioning costs, were reduced or removed.
Despite approving the new rate, the ERC said further adjustments may still be made. Public consultations are scheduled next month to finalize tariff indexation rules — a one-time adjustment mechanism that will account for changes in project costs and foreign exchange rates between the time projects are awarded and when they start operating. The regulator said this step is critical to ensuring the bankability of the country’s first large-scale offshore wind auction.
To protect consumers, the ERC clarified that foreign exchange adjustments will apply only to specific foreign-denominated loans rather than the entire project cost.
Under GEA-5, the government aims to develop 3,300 megawatts (MW) of fixed-bottom offshore wind capacity for delivery between 2028 and 2030. Renewable energy developers will compete by offering rates lower than or equal to the ERC-set GEAR price. Projects that qualify must meet target completion dates to retain their incentives.
The cost of these incentives is collected from all grid-connected consumers as part of their monthly electricity bills.
The Department of Energy (DOE) earlier launched an offshore wind guidebook to streamline the permitting process, which currently requires more than 80 approvals. The DOE estimates the country’s offshore wind potential at over 178,000 MW, with 92 service contracts already awarded covering more than 65,000 MW.
As of end-October 2025, the Philippines has 427 MW of installed on-grid wind capacity — about 1.3 percent of the national power mix — all of which comes from onshore projects.
Industry observers say the updated GEAR rate is key to attracting investors to offshore wind, a capital-intensive but high-potential sector, while the upcoming indexation rules will determine how costs are balanced between developers and consumers.
