ERC Raises Offshore Wind Auction Cap To Boost Investor Interest
- February 25, 2026
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The Energy Regulatory Commission (ERC) has raised the ceiling price for the country’s first large-scale offshore wind auction to ₱11 per kilowatt-hour (kWh), a move designed to enhance project bankability and attract stronger investor participation under the fifth round of the Green Energy Auction Program (GEA-5).
The approved Green Energy Auction Reserve (GEAR) price is higher than the preliminary ₱10.3859/kWh earlier floated by the regulator. The ceiling price serves as the maximum rate that developers may bid for 3,300 megawatts (MW) of fixed-bottom offshore wind capacity targeted for delivery between 2028 and 2030.
Updated Project Costs
The ERC said the upward revision was primarily driven by an updated capacity factor and the inclusion of additional cost components such as port rental, fishery compensation, and land acquisition or rental. Ports are considered vital to offshore wind development, functioning as logistical and operational hubs for construction, assembly, and maintenance.
The regulator also factored in inflation and foreign exchange assumptions. Some components were reduced or removed, including the cost of equity and decommissioning costs, partly offsetting the adjustments.
By setting a higher reserve price, the ERC aims to ensure that offshore wind projects remain financially viable, particularly as the Philippines prepares for its first commercial offshore wind developments.
Competitive Bidding
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the higher cap makes GEA-5 “more attractive” for new renewable energy investments. “But this would mean some increase in electricity prices for consumers,” he added.
Jose M. Layug Jr., president of the Developers of Renewable Energy for Advancement Inc., described the approved rate as “judicious.”
“We hope that this rate encourages bidders to participate in the auction and for the DoE to register as many serious bidders as possible for an inclusive and competitive final bid price that will benefit the consumers,” he said.
Consumer Impact
While the higher ceiling may strengthen investor interest, consumers will shoulder the resulting green energy tariff through the Green Energy Auction Allowance reflected in monthly electricity bills.
Winning bidders will be granted a 20-year supply delivery period. Green Energy Tariff (GET) payments will begin upon project commissioning and registration with the wholesale electricity spot market. The GET, or the price secured through the auction, will be passed on to consumers.
The Department of Energy (DOE) has set a target of generating the country’s first kilowatt-hour of offshore wind power by 2028. Offshore wind is expected to contribute to the broader goal of increasing renewable energy’s share in the power mix to 35% by 2030 and 50% by 2040.
Indexation Rules Under Consultation
Alongside the price approval, the ERC has opened additional public consultations to finalize the one-time indexation mechanism that will adjust tariffs to reflect cost changes between project award and commercial operation.
The consultations, under ERC Case No. 2025-023 RM, aim to refine the formula pursuant to DOE Circular DC2025-06-0009, which amended guidelines for the Green Energy Auction Program. The proposed approach 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 consultations is scheduled on March 9, 2026 at the ERC’s Multi-Purpose Hall and March 10, 2026 for Visayas and Mindanao stakeholders via a virtual platform. Following these consultations, the ERC is expected to finalize and issue the implementing guidelines for GEA-5.
Source:
https://www.erc.gov.ph/Press-Singular/84722
https://www.philstar.com/business/2026/02/23/2509707/erc-raises-ceiling-price-offshore-wind-auction
