The case for offshore wind energy

Offshore wind is not entering the market as the cheapest source of electricity today. It is entering as a strategic resource whose value lies in diversification, fuel-risk reduction, and long-term decarbonization — but only if the costs fall over time and only if implementation risk is controlled.

- DIANNE ARARAL

The Philippines has launched the 5th round of its Green Energy Auction Program, or GEA-5, and this one is different. It is the country’s first auction dedicated exclusively to offshore wind.

The Department of Energy (DoE) has set an installation target of 3,300 megawatts for delivery between 2028 and 2030, while the Energy Regulatory Commission (ERC) has fixed a ceiling tariff — the Green Energy Auction Reserve, or GEAR, price — at P11 per kilowatt-hour (kWh). That makes GEA-5 more than another procurement round. It is the country’s first serious market test of whether offshore wind can move from PowerPoint to steel, cable, and delivered electricity.

This matters because the Philippines cannot discuss energy security the old way anymore. The war in the Middle East has again reminded import-dependent economies how quickly external shocks spill into domestic inflation, power costs, and public anxiety. The country still relies heavily on imported fossil fuels, and every spike in oil or LNG risk is eventually transmitted to transport, electricity, and food. Offshore wind will not solve that immediately. But if built at scale, it can become one of the few large indigenous resources capable of materially reducing exposure to imported fuel over time.

So what exactly is GEA-5? In simple terms, it is a competitive auction where qualified developers bid to supply electricity from offshore wind projects, subject to technical and commercial rules. The DoE has limited this round to fixed-bottom offshore wind, not floating wind, explicitly citing current technical, regulatory, and infrastructure readiness. The supply delivery period is 20 years, which is critical because projects of this scale need long-term revenue certainty to attract lenders and equity investors. The logic is sound: start with the part of offshore wind the country is most capable of building first, then expand later as ports, transmission, and supply chains mature.