Advancing the Philippines’ Offshore Wind Ambitions

September 17, 2025

A high-level roundtable organized by the Makati Business Club (MBC) and the Embassy of the Kingdom of the Netherlands brought together government and industry leaders to address challenges in developing offshore wind (OSW) energy.

Representatives from the Department of Environment and Natural Resources (DENR), Philippine Ports Authority (PPA), Department of Energy (DOE), and the National Grid Corporation of the Philippines (NGCP) outlined ongoing measures to ease bottlenecks in OSW development.

Industry players and experts agree that OSW could transform the Philippines’ energy mix, with the World Bank estimating 178 gigawatts (GW) of technical potential. Service contracts for up to 65 GW have been awarded, but the need for long-term planning, major infrastructure, and consistent investment threatens the government’s 2028 target for the first kilowatt-hour (kWh).

The PPA is positioning several sites for OSW, including major plans in Mercedes (Camarines Norte) and Batangas, while a proposed ₱28-billion upgrade in Currimao (Ilocos Norte) remains uncertain. Stakeholders stressed that ports must be fully prepared with clear lease terms and site readiness to keep projects on track. Despite the hurdles, Currimao’s potential to host up to 2,000 megawatts (MW) highlights the scale of opportunity if critical barriers are resolved.

(Also read: Is Offshore Wind Worth It? A Look at Its Pros and Cons)

Obstacles slowing OSW

Despite vast potential, OSW in the Philippines faces many hurdles that could stall its momentum.

High costs

OSW remains the costliest option among utility-scale renewables, with global levelized cost of energy ranging from $72 to $140 per megawatt-hour (MWh)—far above onshore wind’s $24 to $75/MWh range.

Meanwhile, comprehensive system-cost analyses show that when backup and storage are factored in using the Levelized Full System Cost of Electricity (LFSCOE) metric, onshore wind’s cost can rise to $291 to $483/MWh, compared with only $78 to $90 per MWh for coal.

New OSW is also significantly more expensive than solar PV. The global average Levelized Cost of Energy (LCOE) for new utility-scale solar projects is around $43/MWh. In contrast, the LCOE for new offshore wind projects is almost double, at around $81/MWh.

OSW projects worldwide are grappling with rising costs as inflation, high interest rates, and supply chain strains pressure the industry. The International Energy Agency (IEA) notes the trend is squeezing investment, with offshore maintenance alone consuming 23% of project costs. Recent setbacks include cost overruns in the US Coastal Virginia project, losses for Chubu Electric in Japan, and Danish firm Ørsted’s cancellation of the Hornsea 4 farm in the UK.

According to Dr. Eduardo Araral of the National University of Singapore, the high upfront costs of OSW demand strong investor confidence and significant public financing, and could end up shifting burdens onto consumers. He warned that costly port construction, for example, “risks exacerbating economic inequality.”

Araral noted that in countries with energy poverty, lower-income households already “spend 10 to 40% of income on energy”, so passing infrastructure costs to users would deepen hardship. He recommended treating port and grid upgrades as public goods and funding them through general taxation rather than direct consumer charges.

Regulatory gaps

Developers say OSW projects are being bogged down by red tape, with some ventures needing the nod of more than 20 local governments before moving forward. The DOE and the Department of the Interior and Local Government (DILG) are now pushing measures to streamline the process and boost local awareness of the technology’s benefits.

A 2024 deal between the DOE and DENR eased some permitting hurdles by scrapping separate foreshore leases, but developers say bigger gaps remain. With no firm legal framework or finalized “no-go zones,” projects risk being sited in unviable or protected areas—uncertainty that has already driven some investors away.

Manila Bulletin’s Myrna Velasco wrote, “Until recently, however, there is still no marine spatial planning (MSP) that will guide investors on the ‘no go zones’, leaving industry players sailing blind through waves of uncertainty on how they will navigate some terrains of their project-sites.”

Corrupt practices

Despite its improved global rankings for business, the Philippines’ RE sector is hobbled by deeply embedded corruption, particularly at the local level. Developers face a reality where permits are routinely delayed unless “facilitation payments”—or bribes—are made. This practice extends to land deals and the use of politically-connected suppliers, creating an environment of open extortion.

For foreign firms bound by strict anti-bribery laws, these conditions are legally and reputationally untenable. The expectation of paying bribes effectively forces compliant investors to abandon projects, hindering the nation’s clean energy transition.

Unrealistic pricing policies

The government’s Green Energy Auction Reserve (GEAR) prices, set by the Energy Regulatory Commission (ERC), have become a major sticking point for renewable energy developers. In previous auction rounds, reserve tariffs were considered so low that investors deemed projects financially unfeasible, leading to poor participation and raising concerns about long-term viability.

Critics argue that the current GEAR framework undercuts investor confidence by ignoring the high capital costs of OSW. With the DOE delaying the country’s first OSW auction to late 2025, uncertainty over how GEAR will be applied continues to stall momentum in the sector.

Insufficient port infrastructure

In July, the DOE called on renewable energy developers to file port infrastructure plans ahead of the fifth Green Energy Auction (GEA-5), highlighting the lack of facilities capable of handling massive OSW components. With most existing ports falling short in capacity and load strength, bidders are expected to shoulder the cost of major upgrades or entirely new builds.

According to Manila Times Columnist Ben Kritz, the Philippines’ ports are ill-equipped for the massive demands of OSW. He wrote, “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, depending on their length.” Meanwhile, nacelles and foundations add even more bulk. He added that only a few ports can currently handle such oversized cargo, and most are far from proposed project sites.

Transmission challenges

Transmission bottlenecks threaten to slow OSW development in the Philippines. The National Grid Corporation of the Philippines (NGCP) has mapped more than 30 GW of potential capacity, but key sites like Currimao lack high-voltage links. Building a 300-kilometer transmission line could take up to seven years due to right-of-way issues, delaying project rollout.

“Port upgrades and modernized transmission lines, which could represent up to 20-25% of the total cost of offshore wind projects, are critical for success,” Araral wrote.

(Also read: What’s Holding Back Foreign Investors in Renewable Energy?)

Accelerating OSW development

Speeding up OSW development will require decisive action to cut through bottlenecks and strengthen investor confidence.

Multi-agency engagement

According to Atty. Gladys Nalda, Vice President for External Affairs of the Energy Law Association of the Philippines (ELAP), meeting the 2028 target for the country’s first OSW project will require more than DOE’s efforts alone. She stressed that OSW is a national concern, demanding coordination across government agencies, infrastructure, maritime, logistics, and environmental sectors.

“What we need is a harmonized strategy across all levels and branches of government,” she wrote. “One that can cut through red tape, streamline permitting procedures, and send a strong message to investors that the Philippines is serious about enabling a viable and bankable OSW market.

Public-private partnerships

Talks between the Philippine Ports Authority (PPA) and the Philippine National Oil Company (PNOC) are focusing on expanding port facilities in Bataan and Batangas to support OSW. PNOC’s assets could anchor dedicated hubs, while the DOE is drafting measures to open grid development to private players—key to accelerating project readiness.

Institutionalizing marine planning

Marine planning is being formalized to prevent conflicts and ensure sustainable development. The DENR is advancing Marine Spatial Planning (MSP) to designate suitable sites for OSW projects while keeping them clear of protected areas, fishing zones, and mining sites. A dedicated technical working group is being established to guide this effort, following the framework outlined in the proposed Blue Economy Act.

Policy Reforms to Attract Investment

The government has enacted a law extending land lease durations for foreign investors from a maximum of 75 years to up to 99 years. This policy aims to provide a more stable and predictable environment for long-term commercial and industrial investments, including OSW projects. This move addresses investor concerns about lease uncertainties, especially for multi-decade projects, and is part of broader efforts to boost foreign direct investment in the country.

Push hard or play safe?

The Philippines faces a critical choice in OSW development: pursue rapid, ambitious growth to meet targets, or adopt a measured, pragmatic approach that balances speed with feasibility.

For Nalda, the country’s OSW potential is enormous, offering a chance to lead the region. Yet she warns this opportunity will remain unrealized unless OSW is treated as a collective responsibility. “It is a shared responsibility that requires shared action,” she highlighted.

Meanwhile, the MBC roundtable conveyed cautious optimism, with participants agreeing that the Philippines can achieve its OSW targets if government and industry coordinate “with clarity, consistency, and urgency.” International financiers were highlighted as potential partners for early-stage projects.

Kritz’s view is that the DOE’s plan to auction 3,000 MW of OSW by 2028 to 2030 is overly ambitious. “At this point, my guess is that the DOE will receive bids for the 3,000 MW it is seeking, but that virtually none of it will be completed by the 2028–2030 deadline, and most of it will not be completed at all,” he predicted.

Araral favors a practical path, warning against hastening the country’s energy transition at the expense of legacy systems. “We should not rush to it,” he stressed. “I think we have to do this in a very, very pragmatic way, and the first and foremost principle really is energy security and affordability.”

He also noted that OSW technology is costly, rapidly evolving, and expensive to maintain, requiring careful, measured planning.

Sources:

https://powerphilippines.com/whole-of-government-approach-needed-to-fast-track-offshore-wind/

https://businessmirror.com.ph/2025/08/21/from-oils-retreat-to-the-renewable-race/

https://mbc.com.ph/2025/07/24/policy-note-2028-offshore-wind-target-spurs-urgency-in-ports-grid-and-policy-reforms/|

https://mbc.com.ph/2025/06/20/mbc-policy-note-private-sector-eager-to-unlock-offshore-wind-potential-calls-for-clarity-and-coordination/

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