The Department of Energy (DOE) is preparing to launch a green energy auction (GEA) for offshore wind capacities by next year, eyeing a lead time of eight months for bid submissions, as stated by Energy Undersecretary Rowena Cristina Guevara.
In a report by the Manila Bulletin, Guevara revealed that the DOE plans to announce the tender for offshore wind capacity by the fourth quarter of this year, with bid submissions expected to follow at least eight months thereafter.
The DOE is currently determining the scale of megawatts to be auctioned, considering proposals to allocate pilot megawatts separately for fixed-bottom and floating offshore wind installations. The exact month for the auction next year remains undecided, with Guevara noting that the schedule is still preliminary.
The targeted timeline aligns with the DOE’s goal for the initial megawatts from offshore wind plants to enter the commercial stream by 2028.
Pricing for offshore wind, according to a study by the Asian Development Bank (ADB), could range from P10 to P16 per kilowatt-hour (kWh). However, the Energy Regulatory Commission will determine the final green energy auction reserve (GEAR) price after calculations.
Guevara highlighted the approaches of other markets like Taiwan, where initial incentives for offshore wind projects included a feed-in tariff (FIT), and subsequent auctions were based on developer price offers capped by the government. In contrast, the United States has faced challenges with offshore wind development due to a lack of contract indexation clauses, exposing investors to inflationary risks and rising material costs, leading to project delays, cancellations, and renegotiations.
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