How Asia-Pacific’s most typhoon-exposed country is racing to prove large-scale offshore wind can work—and be affordable

The Philippines is embarking on a high-stakes energy transition. Under its fifth Green Energy Auction (GEA-5), the Department of Energy (DOE) is preparing to bid out 3,300 megawatts (MW) of offshore wind projects—the nation’s first auction dedicated entirely to sea-based wind power.

With a USD 65-billion project pipeline in motion, this move aims to transform storm-prone coasts into a source of clean and reliable power. While GEA-5 is a critical milestone, its success hinges on navigating unique challenges, from high costs to complex infrastructure needs.

This special report draws from the Global Wind Energy Council’s (GWEC) 2025 Global Wind Report, its Offshore Wind Industrial Policy and Finance Papers, alongside insights from the World Bank, the Organisation for Economic Co-operation and Development (OECD),  the Institute for Climate and Sustainable Cities (ICSC), and the Center for Engineering and Sustainable Development Research at De La Salle University (DLSU). Together, they reveal a complex equation: abundant wind resources, strong investor appetite—and equally strong headwinds.

A Blueprint for Expansion

GEA-5 builds on the DOE’s Green Energy Auction Program (GEAP), a competitive mechanism established to bid out and accelerate renewable energy capacity. While earlier rounds under GEA-4 focused mainly on solar and onshore wind, this fifth iteration marks a turning point, ambitiously targeting offshore projects for delivery between 2028 and 2030.

The DOE’s offshore wind roadmap identifies up to 178 gigawatts (GW) of technical potential — one of the highest in Asia. The government aims to raise the overall share of renewable energy from 22% to a demanding 35% by 2030 and 50% by 2040.  As Undersecretary Rowena Cristina L. Guevara noted, “We are in a situation where there are challenges—we lack supply—but there are also opportunities. We need renewables to come in fast.”

The Case for Offshore Wind: Scale and Security

With the policy foundation in place, attention now turns to why offshore wind is being pursued despite its high price tag.

The Philippines boasts extraordinary wind resources, with some of the highest offshore speeds in Asia. The country’s technical potential is estimated at  178 GW or 178,000 MW.  Harnessing even a fraction of this potential could fundamentally reshape the grid.

The projected USD 65 billion investment is poised to create over 100,000 jobs and potentially anchor a new regional industry. By leveraging its skilled shipbuilding and maritime workforce, the Philippines could facilitate the buildout of offshore wind and its supporting infrastructures, and maximize the use of indigenous energy sources, reducing import dependence. 

Offshore wind provides a zero-emission, indigenous energy resource that complements overall power generation.   It reduces the nation’s reliance on imported fossil fuels, shielding the economy from global price volatility and strengthening the country’s overall energy independence. 

Barriers to Scale: Financing, Infrastructure, and Resilience

Offshore wind holds strong promise for the Philippines but remains a high-cost, high-complexity frontier. The challenge lies in delivering competitively priced power amid financing hurdles, infrastructure gaps, and the unique engineering demands of tropical waters.

High Tariffs and Financing Constraints
Early projects are projected to yield tariffs between PHP 9.10 and PHP 16.40 per kWh, driven by steep capital costs for foundations, port upgrades, and typhoon-proof designs. According to GWEC, these expenses stem from “first-of-a-kind” risk, immature supply chains, and tight global financing conditions.

Unlike neighboring ASEAN markets that subsidize electricity, the Philippines operates on market-based rates, making cost control critical. Concessional financing from multilateral banks and export credit agencies can help narrow this gap by lowering the cost of capital—nearly half of total project expenses—and reducing tariffs by up to 30%.

Complementing financial reforms, DLSU researchers recommend using system-aware cost metrics such as the Systemized Blended Cost of Electricity (SBCOE) to better reflect variable generation and actual grid delivery. Their study warns that the traditional Levelized Cost of Electricity (LCOE) can misrepresent costs, particularly when contextualized within a grid system level, while also considering the growing share of variable renewables like wind and solar.

Permitting and Infrastructure Bottlenecks
Despite the Energy Virtual One-Stop Shop (EVOSS), coordination across more than 20 government agencies continues to delay project approvals. Transmission is another major bottleneck, with undersea cables being three to ten times more expensive than overhead lines, directly inflating tariffs. Without synchronized grid expansion by the grid operator, developers risk bearing the full cost of subsea links. Otherwise, they face stranding capacity. GWEC suggests partial socialization of transmission costs to help contain electricity prices.

Typhoon and Operational Risks
Super typhoons such as Saola (Goring) in 2023 highlight the structural and financial demands of offshore development in the Pacific. Projects require Category-5-resilient foundations, specialized insurance, and local response capacity—all raising both upfront and lifetime costs. 

Beyond engineering and cost challenges, the tropical environment itself poses additional constraints. A study published in the Multidisciplinary Digital Publishing Institute’s (MDPI) Energies Journal (2021) found that tropical regions generally have “mild” wind resources compared to temperate zones, even in promising offshore sites. 

Likewise, independent assurance and risk management provider DNV Group notes that offshore wind farms in Asia Pacific must adopt specialized engineering standards for tropical cyclone conditions—underscoring why technology transfer from Europe requires adaptation rather than replication.

Offshore transmission compounds expenses, as undersea cables are up to three times more costly to maintain than overhead lines. Developers are exploring floating wind technologies for deeper, more sheltered waters, though these remain capital-intensive and technically complex.

Offshore wind also coexists with fisheries and marine biodiversity. GWEC’s Finance Paper highlights the importance of marine spatial planning and community engagement to prevent displacement and foster local acceptance.

DOE’s Guevara has echoed this sentiment, saying that “Communities are part of the symphony — each must play its role so development is in harmony.” 

Affordability is the Real Test

GWEC’s 2025 Global Wind Report highlights key lessons for emerging offshore markets like the Philippines, where clean energy ambitions must be matched by affordability.

Tariff design will define success. The price of electricity remains the central issue for the Philippines—one of Asia’s most expensive power markets where consumers shoulder the full cost. GEA-5 must balance competitiveness with financial realism through index-linked tariffs and transparent escalation mechanisms that protect investors without burdening households and small businesses.

Applying system-aware metrics, as recommended by DLSU researchers, ensures that high renewable penetration does not create hidden costs or grid reliability issues, supporting informed, balanced decisions on energy security, equity, and sustainability.

Realistic auction design is also essential. Europe’s “race-to-the-bottom” experience shows that unsustainably low bids can lead to cancellations and erode confidence. For GEA-5, realistic pricing is key to attract capital and maintain stable tariffs.

Stable policy cadence builds confidence. Stop–start procurement inflates risk premiums and discourages manufacturers from investing. GWEC stresses that predictable, multi-year auction schedules are vital to scale and lower costs.

Infrastructure readiness dictates delivery. Offshore wind delivers value only when ports and grids can support it. GWEC warns that unsynchronized investments can drive up tariffs and undermine confidence.

Industrialization and standardization lower long-term costs. Modular designs, regional manufacturing hubs, and automation are proven levers to reduce costs. For the Philippines, leveraging its shipbuilding base and aligning policy with regional partners could localize production and moderate tariffs.

Ultimately, GEA-5’s success will hinge not only on capacity targets but on cost control and timing. In a market where consumers pay full price for power, offshore wind will be judged by how much each kilowatt-hour costs, not just how many megawatts are built.

Finding the Right Balance

The energy sector faces a delicate balancing act of ensuring affordability and reliability, while maintaining investor confidence and earning public trust in a sector often criticized for cost overruns.

Experts call for a coordinated approach that includes indexed tariffs, streamlined permitting through Executive Order (EO) 21—which establishes the country’s offshore wind roadmap—and an improved EVOSS. Other priorities include joint public–private investments in ports and logistics (especially in Batangas, Currimao, and Ilocos), practical local-content rules, resilience standards for typhoon exposure, and social acceptance.

Mechanisms like lifeline tariffs and phased cost recovery can protect consumers, while system-aware metrics such as the Systemized Blended Cost of Electricity can guide decisions on cost and reliability.

Beyond implementation, some experts argue that pacing may matter as much as execution. A phased rollout—auctioning capacity in smaller tranches—can reduce permitting and financing risks. Research by the U.S. Bureau of Ocean Energy Management and RPS Group (2017) found that sequential project development enables regulators and investors to incorporate lessons learned in early-stage markets. 

The World Bank’s Offshore Wind Roadmap for the Philippines (2022) likewise stressed that large-scale deployment depends on infrastructure readiness, especially ports and the transmission network. Staging capacity later in the decade could align with those developments while taking advantage of falling technology costs. 

According to the International Renewable Energy Agency (2024), offshore wind capital costs declined by more than 30% from 2010 to 2022 and are expected to continue dropping as supply chains mature. A study by Santhakumar et al. (2023) further notes that “learning-by-doing” continues to drive cost reductions across successive project cycles.

GWEC’s Global Wind Report 2025 similarly underscored that realistic auction pacing and synchronized infrastructure investments are vital to avoid cost overruns—suggesting that GEA-5 could benefit from a phased approach instead of auctioning the full 3,300 MW at once. Extending development timelines would also let projects come online when ports, roads, and transmission are ready, and when costs have moderated.

If executed with transparency, coordination, and inclusion, GEA-5 could strengthen both investor confidence and public trust—creating a renewable energy model that is economically viable, socially durable, and sustainable.

The outcome of GEA-5 will shape investor confidence, consumer costs, and the country’s energy transition.

—

Sources:

Global Wind Energy Council (GWEC). Building Offshore Wind Economies in Asia Pacific: Strategic Pathways for Industrial Growth. (Industrial Policy Paper, September 2025) 

Global Wind Energy Council (GWEC). Financing the Offshore Wind Revolution: Risk-Sharing Mechanisms for a Sustainable Energy Future in the Philippines. (Finance Paper, September 2025)  

Global Wind Energy Council (GWEC). Global Wind Report 2025 

World Bank Group. Offshore Wind Roadmap for the Philippines. 2022.

Department of Energy (Philippines). Philippine Energy Plan 2023–2050 and Renewable Energy Service Contracts Database (2025 update)

Organisation for Economic Co-operation and Development (OECD). Clean Energy Finance and
Investment Roadmap of the Philippines. 2024

Institute for Climate and Sustainable Cities (ICSC) and GIZ. The Road to Renewables: Conversations on Energy Transition (2024 series)

Center for Engineering and Sustainable Development Research – De La Salle University. Refining Yardsticks for Energy Equity, Energy Security, and Environmental Sustainability (2025)

MDPI’s Energies Journal (2021). Understanding the Potential of Wind Farm Exploitation in Tropical Island Countries: A Case for Indonesia

DNV Group (2021). DNV issues new Technical Note to address wind farm design for tropical cyclone areas

Bureau of Ocean Energy Management (BOEM) and RPS Group. Phased Approaches to Offshore Wind Developments and Use of Project Design Envelope. U.S. Department of the Interior, 2017.  

International Renewable Energy Agency (IRENA). Floating Offshore Wind Outlook 2024. Abu Dhabi: IRENA, 2024. 

Santhakumar, S., et al. “Technological learning potential of offshore wind: Global evidence from project-level data.” Renewable and Sustainable Energy Reviews, 2023.