The Energy Regulatory Commission (ERC) has approved a PHP 11.00 per kilowatt-hour (kWh) Green Energy Auction Reserve (GEAR) price for offshore wind projects under the fifth round of the Green Energy Auction Program (GEA-5), marking the first finalized ceiling price for offshore wind.

The approved rate is higher than the preliminary PHP 10.3859/kWh released in December for public consultation, as part of preparations for the Philippines’ first large-scale offshore wind auction targeting 3,300 megawatts (MW) of fixed-bottom capacity for delivery between 2028 and 2030.

According to the ERC, the adjustment to PHP 11.00/kWh reflects updates to the capacity factor, inclusion of port rental, fishery compensation, and land acquisition or rental costs, as well as revised inflation and foreign exchange assumptions.

Certain components were also reduced or removed, including the cost of equity and decommissioning costs, the Commission noted.

Alongside the approved ceiling price, the ERC opened public consultations on tariff indexation rules under ERC Case No. 2025-023 RM.

Indexation is a one-time tariff adjustment mechanism that accounts for cost changes between project award and commercial operation, as according to Department of Energy Circular DC2025-06-0009. The proposed formula 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 public consultations on the implementation of one-time indexation is scheduled on March 9 at the ERC’s Multi-Purpose Hall and on March 10 for Visayas and Mindanao stakeholders via a virtual platform.

GEA-5 forms part of the Department of Energy’s Green Energy Auction Program, the government’s primary mechanism for procuring renewable energy capacity to help meet clean energy targets.

The ERC said its review aims to ensure offshore wind projects remain bankable while protecting consumers from excessive power costs as the Philippines advances its offshore wind development plans.

As the country moves closer to its first offshore wind auction, will the finalized reserve price and indexation framework draw strong developer participation under GEA-5?

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