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The Department of Energy (DOE) has placed the fifth round of the Green Energy Auction Program (GEA-5) for offshore wind (OSW) on hold as it reviews and recalibrates the auction framework to address project development challenges.
DOE Undersecretary Felix William Fuentebella said the auction activities were suspended indefinitely while the agency, along with other government bodies and stakeholders, conducts a comprehensive assessment of the program’s implementation requirements.
The review is intended to ensure that the country’s first OSW auction moves forward with stronger foundations, including improved interagency coordination, clearer regulations and greater readiness for project execution. The recalibration will examine key factors such as port capacity, transmission infrastructure, permitting processes, environmental requirements and overall project timelines.
“This measure is intended to ensure a more transparent, orderly and implementation-ready auction process,” Fuentebella stated in a briefing issued to renewable energy (RE) sector participants.
The DOE is also assessing how ongoing geopolitical tensions in the Middle East could affect global supply chains, with the agency set to issue updated guidelines and revised timelines as needed. The suspension came weeks after nine companies were confirmed to have advanced to the next stage of the OSW auction evaluation.
The GEA-5 auction was originally scheduled for Aug. 27, with winning bidders expected to receive notices of award by Sept. 23. The landmark round covers 3,300 megawatts (MW) of fixed-bottom offshore wind projects targeted for delivery between 2028 and 2030.
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Cost Concerns
While the DOE’s reassessment is a welcome step, energy experts have long warned that OSW remains economically challenging due to its higher costs compared with other renewable sources.
OSW requires significant upfront capital, with industry estimates placing costs at $3 million to $7 million per MW. Expenses can rise further depending on factors such as water depth, distance from shore, infrastructure challenges, and regulatory requirements.
In December 2025, the Energy Regulatory Commission (ERC) set a preliminary ceiling price of ₱10.3859 per kilowatt-hour (kWh) for fixed-bottom OSW projects. By comparison, some Philippine solar PPAs have been signed at around ₱4.50 per kWh, making OSW nearly three times more expensive.
Rappler’s Val Villanueva warned that deferring OSW costs would not remove the burden on consumers, who may still face higher generation charges, system fees and grid connection expenses.
“Filipinos already face among the highest electricity rates in Asia,” he stressed. “Careless OSW timing can push that burden even higher. This is the price impact that households cannot afford — and one that government can still avert.”
Questionable Infrastructure Readiness
GEA-5 OSW developers are required to include port development plans, but much of the needed infrastructure is still dependent on upgrades that have yet to happen. According to Dr. Eduardo Araral of the National University of Singapore, port and grid investments could add 20% to 25% to overall project costs.
Even the Philippine Ports Authority (PPA) warned that port infrastructure may not keep pace, with only one or two OSW-ready facilities expected by this year or 2027. Existing ports also fall short of project requirements, as OSW facilities need 23 to 25 hectares of space compared with the typical 2 to 5 hectares currently available.
Additionally, OSW projects involve massive components, including 80- to 100-meter turbine blades and multi-ton nacelles. However, only a few facilities can accommodate such oversized equipment, while limited road access and the distance of existing ports from project sites add further challenges.
Compounding the issue is the lengthy timeline needed to build OSW-ready ports. Developing facilities that meet international OSW logistics standards could take two to three years for planning, design and construction, even before accounting for permitting requirements.
Manila Times columnist Charlie Manalo also argued that OSW’s higher output potential is tempered by unpredictable sea conditions and costly operations. “Offshore…is a different challenge as each project requires heavy-duty foundations, specialized ships, subsea cables, offshore substations and complex marine engineering,” he pointed out. “Maintenance can also be costly and dangerous as it will involve helicopters and limited weather windows.”
Transmission Constraints
While the National Grid Corporation of the Philippines (NGCP) has identified potential connection points capable of accommodating more than 30 gigawatts (GW) of OSW capacity, developers are still responsible for establishing the links between generation sites and the grid—adding substantial costs and technical hurdles.
Many prospective OSW areas lack nearby high-voltage transmission facilities. Building a transmission line spanning around 300 kilometers could take as long as seven years, largely due to right-of-way acquisition challenges and permitting delays.
A 2024 technical assistance report by the Asian Development Bank (ADB) identified transmission access and grid readiness as critical factors that could determine the success of OSW projects. It emphasized the need for stronger infrastructure planning and clearer commitments on available grid capacity at proposed connection points.
The report also cautioned that adding large volumes of variable RE could place further pressure on the power system unless grid rules and operations are strengthened.
“Given OSW integration will increase variable renewable electricity in the Philippine supply mix, the Philippine Grid Code (PGC) should be suitably amended to address operational constraints in the transmission network,” it noted.
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Environmental Issues
OSW projects are also drawing scrutiny over their potential environmental and security implications.
In Ilocos Norte, concerns have been raised over whether the proposed 2,000-MW BuhaWind OSW development can withstand Philippine weather conditions and how it may affect marine ecosystems. Questions have also emerged over the use of foreign studies as benchmarks, given differences in wind patterns and environmental conditions.
Beyond ecological risks, the project’s location near a military facility has prompted discussions on possible national security impacts, including access and operational concerns.
The absence of a comprehensive marine spatial planning (MSP) framework adds another layer of uncertainty. MSP helps balance competing ocean uses, including fisheries, shipping lanes, conservation areas and energy projects, by identifying suitable zones and reducing conflicts.
Without it, OSW sites could overlap with critical maritime routes or fishing grounds, raising safety, economic and community concerns. As Manila Bulletin’s Myrna Velasco wrote, “turbines that choke access to vital fishing grounds won’t just displace fisherfolk; these could also push overfishing elsewhere or spark economic losses.”
In San Miguel Bay, spanning Camarines Norte and Camarines Sur, planned 1,000-MW and 500-MW OSW projects intersect with municipal fishing areas, potentially affecting thousands of small-scale fishers. Meanwhile, the BuhaWind project may impact more than 6,300 fisherfolk.
A Costly Gamble That Needs Reassessment
The DOE’s decision to pause GEA-5 raises a fundamental question: why did the government push OSW so aggressively despite the infrastructure, cost, and regulatory challenges surrounding the technology?
OSW has been positioned as a key pillar of the Philippines’ clean energy transition, with its vast potential to support energy security and diversify the power mix. However, ambitions must be matched with realistic assessments of grid readiness, port capacity, affordability and environmental safeguards.
The indefinite delay risks weakening investor confidence and casting doubt on the government’s ability to execute large-scale RE projects. A recalibration may be necessary, but the disruption also highlights the need for better planning before commitments are made.
As Villanueva concluded, “Offshore wind will eventually play a major role in stabilizing the Philippine grid… But these advantages only materialize when OSW becomes cost-competitive. The public should not be forced to subsidize the learning curve of a technology that is not yet financially mature, especially when cheaper alternatives exist today.”
Sources:
https://www.philstar.com/business/2026/07/09/2540778/offshore-wind-auction-put-indefinite-hold
https://business.inquirer.net/600130/doe-suspends-auction-for-offshore-wind-projects
https://plus.inquirer.net/opinion/introducing-osw-into-ph-power-system
https://mb.com.ph/15/12/2024/doe-to-slash-offshore-wind-performance-bond-to-5
https://mb.com.ph/2025/12/15/erc-sets-1039-per-kwh-price-cap-for-offshore-wind-auction
https://solaren-power.com/solar-energy-philippines-future-of-energy
https://www.manilatimes.net/2025/06/22/opinion/columns/tilting-at-windmills/2137401
https://www.adb.org/sites/default/files/project-documents/55140/55140-001-tacr-en_6.pdf
https://mb.com.ph/2025/12/08/who-wants-to-pay-14kwh-for-offshore-wind