ERC approves PHP 11 per kWh offshore wind ceiling price

The Energy Regulatory Commission (ERC) has approved a PHP 11.00 per kilowatt-hour (kWh) Green Energy Auction Reserve (GEAR) price for offshore wind projects under the fifth round of the Green Energy Auction Program (GEA-5), marking the first finalized ceiling price for offshore wind in the Philippines.

The approved rate is higher than the preliminary PHP 10.3859/kWh released in December for public consultation, as part of preparations for the country’s first large-scale offshore wind auction targeting 3,300 megawatts of fixed-bottom capacity for delivery between 2028 and 2030.

According to the ERC, the adjustment to PHP 11.00/kWh reflects updates to the capacity factor, inclusion of port rental, fishery compensation, and land acquisition or rental costs, as well as revised inflation and foreign exchange assumptions. Certain components were also reduced or removed, including the cost of equity and decommissioning costs.

Alongside the approved ceiling price, the ERC opened public consultations on tariff indexation rules under ERC Case No. 2025-023 RM.

Indexation is a one-time tariff adjustment mechanism that accounts for cost changes between project award and commercial operation, pursuant to Department of Energy (DOE) Circular DC2025-06-0009, entitled Amendment to Department Circular No. DC2025-03-0004 titled, Providing the Revised Guidelines for the Green Energy Auction Program in the Philippines. The proposed formula adopts a cost-component-based adjustment, with foreign exchange indexation applying only to specific foreign-denominated loans.

“Stakeholder feedback will help ensure that the indexation framework reflects project cost realities while maintaining consumer protection,” the ERC said.

A third round of public consultations on the implementation of one-time indexation is scheduled on March 9 at the ERC’s Multi-Purpose Hall and on March 10 for Visayas and Mindanao stakeholders via a virtual platform. Following the consultations, the ERC will finalize the indexation framework and issue the implementing guidelines under GEA-5.

GEA-5 forms part of the DOE’s Green Energy Auction Program, the government’s primary mechanism for procuring renewable energy capacity to help meet clean energy targets. The Philippines has set a target of reaching a 35 percent share of renewable energy in its power generation mix by 2030 and 50 percent by 2040.

The ERC said its review aims to ensure offshore wind projects remain bankable while protecting consumers from excessive power costs as the Philippines advances its offshore wind development plans.