Unsteady Ground: The Cracks in GEA-5’s Offshore Wind Strategy
- July 8, 2025
The Department of Energy (DOE)’s Fifth Green Energy Auction (GEA‑5), launched in June 2025, marks the first auction in the Philippines dedicated solely to fixed-bottom offshore wind, with a towering target of 3,300 MW to be operational between 2028 and 2030.
This decisive shift aligns with the DOE’s broader renewable ambitions under the Philippine Energy Plan 2025–2050 and the National Renewable Energy Program, which aim to raise the country’s renewable energy share to 35% by 2030 and 50% by 2040.
The DOE underscored its choice as a “technology that is ready to deliver,” emphasizing its cost-efficiency and scalability compared to emerging floating platforms. By concentrating on fixed-bottom systems, the Philippines aims to begin delivering electricity by 2028.
However, energy experts point to flaws in GEA-5, raising concerns about several aspects of the program.
(Also read: Is Offshore Wind Worth It? A Look at Its Pros & Cons)
Examining the GEA-5 offshore wind shortcomings
At a recent closed-door roundtable hosted by the Makati Business Club (MBC) and the Dutch Embassy, industry leaders flagged pressing issues holding back offshore wind development in the Philippines.
Despite contracts covering up to 65 gigawatts (GW) of potential capacity, stakeholders warned that delays are likely unless problems in different aspects are addressed. While offshore wind offers huge promise, its complexity calls for more focused and coordinated efforts.
Here are some of the challenges they raised—and others that have since come to light.
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Misaligned goals & groundwork
Critics argue that GEA-5 is driven more by politics than by technical planning, with a focus on announcing impressive capacity rather than ensuring feasibility on the ground. Manila Times columnist Ben Kritz called it “based on upside down planning… generating numbers in an auction will meet arbitrary and largely politically motivated targets,” rather than addressing actual energy needs.
Critics warn that the auction-based design pushes developers to bid without confirmed proof of port, grid, or site readiness, setting projects up for failure.
For example, the Philippine Ports Authority recently admitted that specialized offshore wind ports are unlikely to be operational by 2028, with only one or two possibly ready by 2026 or 2027, despite service contracts covering over 6 GW of capacity. This mismatch of timelines leaves awarded projects vulnerable to costly delays or outright cancellations.
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Infrastructure gaps
Fixed-bottom offshore wind requires transporting massive components, such as 80 to 100-meter blades and multi-metric ton nacelles, which demands specialized port facilities for staging, loading, and maintenance. Yet Philippine ports largely lack the infrastructure to support this scale of operation.
While the Terms of Reference (TOR) for GEA-5 now require developers to submit port development plans, these are still based on uncertain future upgrades and not on existing, usable capacity.
Compounding the issue, there is no mandate to address how these oversized parts will be transported from the port to the project site. Kritz points out that the country’s road networks, critical for this kind of backhaul logistics, remain severely inadequate.
According to the MBC, the lack of “port infrastructure that meets international logistics standards” is a major roadblock. Building facilities capable of handling offshore wind components could take “two to three years just for planning, design, and construction”—without even factoring in the time needed to secure permits.
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Regulatory obstacles
Developers are stuck navigating overlapping mandates across various agencies and local governments. As Triconti ECC Renewables Offshore Wind Head Björn Rosenberger put it, “multiple agencies… slow down coordination and decision making.”
The Energy Virtual One-Stop Shop (EVOSS), while useful for onshore projects, still lacks integration for offshore permitting, leaving marine spatial planning, environmental clearances, and grid studies in limbo.
To compound the issue, investors are discouraged by reports of unreceipted “facilitation payments” required by some local officials. These add a layer of hidden costs and legal risk, particularly unsettling for foreign firms bound by strict anti-bribery laws.
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Financial burdens
Developers face immense financial pressure due to the sky-high capital expenditures required for fixed-bottom offshore wind, priced between $3 million and $7 million per MW. Even though the DOE has reduced performance bond requirements from 20 % to 5 %, the upfront investment remains daunting.
Moreover, these figures exclude a slew of cost escalation factors—such as port upgrades, roadworks, grid connections, and permitting delays—that can inflate budgets well beyond initial estimates.
For instance, Danish offshore wind developer Ørsted decided to discontinue the Hornsea 4 project in the UK. Despite securing government support, the 2.4 GW project was halted due to “continued increases of supply chain costs, higher interest rates and increased execution risk,” prompting Ørsted to cancel all spend and supplier contracts.
This case demonstrates how even major projects with strong backing can collapse when inflation catches up.
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Grid interconnection challenges
The National Grid Corporation of the Philippines (NGCP) has mapped out potential connection points for offshore wind, detailing available capacities that determine how large a project can be in a given area.
However, linking turbines to the grid remains the developer’s responsibility. While NGCP has streamlined the process, these connections still add to the financial and logistical burden for offshore wind proponents.
During the MBC’s discussion, participants underscored the pressing need for greater clarity on grid integration for offshore wind. Developers called for definitive timelines and transparent guidance on where and when connections to the grid would be feasible. Without guaranteed dispatch, many voiced concerns that curtailment risks could delay projects or undermine their viability entirely.
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Typhoon risk & marine governance
Experts highlight the dual challenge of natural hazard resilience and marine complexity facing Philippine offshore wind. Engineers caution that turbines must be significantly more robust to withstand the country’s frequent super‑typhoons.
NGCP has begun reinforcing transmission infrastructure to resist winds up to 300 kph. However, designing “typhoon‑proof” offshore foundations still carries hefty engineering and cost premiums.
Meanwhile, seabed leasing emerged as a key concern in the MBC discussion. Unclear rules on how developers can use and secure rights to the seabed have made banks hesitant to finance projects, particularly if delays or defaults occur. Participants stressed that streamlining the leasing process and clarifying how offshore wind assets are treated in such cases would be essential to improving project bankability.
(Also read: EV Trends, Challenges, and the Tech Shaping the Future)
Bottom Line
Despite the challenges, the Makati Business Club roundtable ended on a hopeful note. Participants agreed that offshore wind holds great promise, but reaching the Philippines’ goals will require clear policies, faster execution, and strong coordination between government and industry.
There was also recognition that early-stage financing remains a hurdle. International financial institutions were seen as potential partners to help fill funding gaps and build investor confidence.
To move forward, the country must shift from announcements to action—strengthening ports, clarifying rules, and supporting developers to deliver real progress on the ground.
Sources:
https://legacy.doe.gov.ph/press-releases/doe-kicks-green-energy-auction-fixed-bottom-offshore-wind
https://dailyguardian.com.ph/ph-opens-offshore-wind-auction-for-3-3gw-capacity
https://mb.com.ph/2025/06/09/the-silent-sell-off-of-foreign-re-investors
https://mb.com.ph/15/12/2024/doe-to-slash-offshore-wind-performance-bond-to-5
https://powerphilippines.com/ngcp-reinforces-transmission-lines-to-withstand-super-typhoons-in-high-risk-areas
