High Offshore Wind Costs Poised to Burden Consumers and Widen Poverty Gaps
- December 16, 2025
The Department of Energy (DOE) has launched the fifth round of the Green Energy Auction (GEA-5), dedicated solely to fixed-bottom offshore wind (OSW) projects. This technology anchors wind turbines directly to the seabed in relatively shallow waters, usually up to 50 to 80 meters deep, and is considered one of the more established methods of OSW development.
GEA-5 opens up 3.3 gigawatts (GW) of capacity for large-scale projects, targeting delivery from 2028 to 2030. The DOE also released detailed terms of reference (TOR) that provide the complete set of requirements, timelines, and evaluation procedures that developers must follow to participate in the bidding.
However, readiness matters as much as ambition. A rushed, poorly planned OSW rollout risks incurring high costs for consumers, conflict with coastal livelihoods, and lasting damage to marine ecosystems.
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High costs = higher electricity bills
OSW is clearly the most capital-intensive form of renewable energy development. According to the Global Wind Energy Council (GWEC), developers typically need to invest between $3 million and $4 million for every megawatt (MW) of capacity installed.
Project costs can climb even higher depending on site conditions and development challenges. Deeper waters, far-from-shore locations, and the need for complex infrastructure all add to the price tag. Lengthy approvals and layered permitting requirements can further boost expenses.
Current estimates place its levelized cost of energy at roughly $72 to $140 per MWh, well above the $24 to $75 range typical for onshore wind.
According to the Energy Regulatory Commission (ERC), the reported price level of OSW is ₱14/kWh. For context, solar power purchase agreements (PPAs) in the Philippines have been signed at around ₱4.50 per kWh in some cases, making OSW nearly three times as expensive. Analysts and journalists have criticized these high costs.
“While Filipinos are being told to feast on crumbs for a ₱500 noche buena this Christmas, how can anyone expect us to stomach a power capacity addition that will compel consumers to pay a gut-wrenching ₱14 per kWh for offshore wind?” questioned Manila Bulletin’s Myrna Velasco. “This energy source is being served like a luxury entrée to a populace already choking on financial survival.”
Monalisa Dilamanta, former ERC chair, warned that the figure cited only tells part of the story.
She noted that “a full-system cost analysis will need to be done for transparency and prudent decision-making.”
Meanwhile, Rappler’s Val Villanueva cautioned that spreading OSW costs over time does little to ease the initial impact, as consumers will still face higher generation charges, additional system fees, and extra expenses for connecting the projects to the grid.
“Filipinos already face among the highest electricity rates in Asia,” highlighted Villanueva. “Careless OSW timing can push that burden even higher. This is the price impact that households cannot afford — and one that the government can still avert.”
With large investments needed for OSW ports, Eduardo Araral, associate professor of Public Policy at the National University of Singapore, warned that OSW “risks exacerbating economic inequality.” In the Philippines, lower-income households often spend 10 to 40% of their income on electricity, and costs per kilowatt-hour are much higher for them when relying on renewable sources, placing a disproportionate burden on vulnerable communities.
Philippine OSW costs outpace Vietnam
Velasco questioned the rationale behind the Philippines’ OSW pricing, pointing out that tariffs are projected to be ₱4 to ₱6 per kWh above Vietnam’s, even though both nations are developing similar projects on roughly the same schedule.
Using a blended finance model, GWEC estimates that Philippine OSW tariffs could range from ₱10.50/kWh to ₱16.20/kWh. By comparison, Vietnam’s projected rates sit much lower, between ₱6.56 and ₱9.86/kWh. The result is a striking price gap, highlighting just how much more expensive OSW could be in the Philippines.
“It’s the same technology genre in an emerging market that is relatively similar to us,” observed Velasco. “So why is offshore wind in the Philippines priced like it’s made of gold?”
Industry insiders note that the Philippines carries a higher risk premium for OSW, but there is no clear explanation for why this is the case, whether due to government inefficiencies or the practices of private developers. Consumers could end up paying significantly higher costs without fully understanding the hidden expenses.
In contrast, Vietnam benefits from established port infrastructure and completed marine spatial planning (MSP), while the Philippines is still developing both, putting it at a disadvantage in terms of readiness and cost efficiency.
(Also read: Counting the Wrong Costs: The Case for Rethinking How We Judge Renewables)
Why MSP is crucial
MSP provides a structured way to allocate ocean space among competing uses such as fishing, shipping, conservation, coastal communities, and OSW. This reduces user conflict and lays out clear zones where wind farms can be built with fewer disputes.
Without proper MSP, Philippine waters could become high-risk zones. Turbines placed near major shipping routes or fishing areas could increase the likelihood of collisions with cargo vessels, fishing boats, or recreational crafts. Such risks could drive up insurance costs for maritime and tourism industries while endangering livelihoods and safety.
“Additionally, turbines that choke access to vital fishing grounds won’t just displace fisherfolk; these could also push overfishing elsewhere or spark economic losses,” wrote Velasco. “This will essentially ignite tensions with coastal communities, which is why many markets have simply abandoned offshore wind projects.”
Cases that illustrate this include San Miguel Bay across Camarines Norte and Camarines Sur, where a 1,000-MW OSW project and a 500-MW development in municipal fishing areas threaten thousands of small-scale fishers. In Ilocos Norte, the 2,000-MW BuhaWind floating project puts over 6,300 fisherfolk at risk.
Rushing into OSW development without proper MSP also risks placing turbines in ecologically fragile areas. Seagrass meadows, coral reefs, fish nurseries, and bird migration paths could be disrupted, leading to lasting harm for marine life and significant economic losses for fisheries, tourism, and shipping industries.
“Without careful planning, offshore wind turbines may likewise risk clashing with naval training zones, radar lines, and scientific monitoring areas for defense and military agencies,” added Velasco. “And during storms or extreme emergencies, they could flip rescue and evacuation routes into unwarranted obstacles.”
Prioritizing people over high-cost OSW
With 17.54 million Filipinos living below the poverty line, unable to meet their basic food and non-food needs, and the country aiming to grow its middle class, pursuing costly OSW at this stage may not be the most prudent choice.. A pragmatic approach is needed to safeguard those most at risk, making sure that renewable energy ambitions do not inadvertently push the poor into deeper hardship.
The economic challenges of OSW are being felt worldwide. Rising inflation, high interest rates, and costly grid upgrades have pushed project budgets higher in the U.S. and Japan, while the Netherlands has scaled back its 2040 target, highlighting the need for realistic planning and careful cost management.
For the Philippines, these global examples underline a critical point: with limited resources and high social vulnerability, expensive mistakes cannot be afforded. Any rush to implement OSW without careful planning, cost management, and protections for the country’s most vulnerable could result in economic strain, social disruption, and missed opportunities to pursue a balanced energy transition.
Velasco concluded, “I support offshore wind development in the Philippines and recognize the efforts of prospective developers, but it must be done right—not as a half-baked plan with incomplete planning and unestablished infrastructure—because what is currently on the table is nothing short of a recipe for disaster.”
Sources:
https://mb.com.ph/15/12/2024/doe-to-slash-offshore-wind-performance-bond-to-5
https://solaren-power.com/solar-energy-philippines-future-of-energy
https://mb.com.ph/2025/12/08/who-wants-to-pay-14kwh-for-offshore-wind
https://pia.gov.ph/press-release/poverty-rate-down-to-15-5-percent
https://www.iea.org/energy-system/renewables/wind
https://renews.biz/101878/netherlands-to-ditch-50gw-offshore-wind-target
