The Energy Regulatory Commission (ERC) has issued the preliminary Green Energy Auction Reserve (GEAR) price for the fifth round of the Green Energy Auction. The draft rate is set at PHP 10.3859 per kilowatt-hour for fixed-bottom offshore wind projects, marking a major step toward the country’s first commercial offshore wind developments.

A GEAR price serves as the maximum allowable ceiling rate for bids in the auction. It prevents developers from offering prices beyond a defined limit and ensures that the winning offers remain competitive.

The rate also gives investors a benchmark for evaluating costs and helps the government secure renewable energy at a fair and predictable price for consumers. 

Fixed-bottom offshore wind refers to turbines installed on foundations attached directly to the seabed. These structures work best in shallow to medium water depths, where the seabed conditions allow stable anchoring. This setup differs from floating offshore wind, which is designed for deeper waters.

Before a final rate is adopted, the Commission said the draft price and related pricing mechanism will be opened to public consultation, with written comments accepted from December 12 to 19. The ERC has also scheduled consultation meetings in Luzon on January 5, 2026, followed by Visayas and Mindanao on January 6, 2026, ahead of its final deliberation on January 14, 2026.

The pricing exercise is being conducted pursuant to the ERC’s mandate under Department of Energy (DOE) Department Circular 2021-11-0036, which requires the Commission to set auction reserve prices after the DOE issues the Notice of Auction and Terms of Reference for each auction round.

GEA-5 will cover fixed-bottom offshore wind projects only, with an installation target of 3,300 megawatts (MW) and a delivery period spanning 2028 to 2030, according to parameters defined by the DOE. Other offshore wind technologies are not included in this auction round.

Alongside the draft reserve price, the ERC also approved a preliminary one-time indexation formula under Section 17 of DOE Department Circular 2025-06-0009, which will be reviewed together with the proposed GEAR price during the consultation period.

“This auction for offshore wind is a milestone in achieving the Philippine Energy Plan set by the DOE,” ERC Chairperson Nino Juan said, adding that offshore wind is a new technology in the country with a total potential capacity of more than 68 gigawatts.

With the pricing framework now subject to public input, how might stakeholder feedback influence the final structure of the country’s first offshore wind auction?

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