The Energy Regulatory Commission (ERC) has approved a Green Energy Auction Reserve (GEAR) price of PhP 11.00 per kilowatt-hour (kWh) for offshore wind projects under the fifth round of the Green Energy Auction Program (GEAP), while initiating public consultations on tariff indexation rules for the country’s first large-scale offshore wind auction.

The approved rate represents an upward adjustment from the preliminary PhP 10.3859/kWh, reflecting revisions in key cost assumptions. The ERC cited updates in capacity factor estimates, inclusion of port rental fees, fishery compensation, land acquisition or rental costs, as well as revised inflation and foreign exchange projections as primary drivers of the adjustment. Certain cost components, including the cost of equity and decommissioning expenses, were reduced or removed.

Indexation Framework Under Review

The regulator has also opened consultations under ERC Case No. 2025-023 RM to determine how tariffs may be adjusted between project award and commercial operation.

Indexation, defined as a one-time tariff adjustment mechanism, accounts for cost movements during the development phase in line with Department of Energy (DOE) Circular DC2025-06-0009. The proposed framework adopts a cost-component-based formula, with foreign exchange indexation applicable only to specific foreign-denominated loans.

The ERC stated that stakeholder feedback will help ensure that the indexation structure reflects project cost realities while safeguarding consumer interests.

GEA-5 Targets 3,300 MW Offshore Wind Capacity

The offshore wind auction, known as GEA-5, is part of the DOE’s Green Energy Auction Program, the government’s primary mechanism for procuring renewable energy capacity to meet national clean energy targets.

According to the DOE, GEA-5 aims to procure 3,300 megawatts (MW) of fixed-bottom offshore wind capacity, with delivery scheduled between 2028 and 2030.

A third round of public consultations on the implementation of the one-time indexation mechanism is scheduled for 9 March 2026 at the ERC Multi-Purpose Hall, followed by a virtual session on 10 March 2026 for stakeholders in the Visayas and Mindanao regions.

Following the consultation process, the ERC is expected to finalise and issue the implementing guidelines for GEAP Round 5.

The Commission reaffirmed that the review seeks to maintain project bankability while protecting consumers from excessive electricity costs as the Philippines advances its offshore wind development programme.