By Myrna M. Velasco

Investors on pipelined offshore wind developments in the country are amenable to a P10 to P16 per kilowatt hour (kWh) prospective reserve price for contracted capacity on their projects once the green energy auction (GEA) for the technology will be carried out by the Department of Energy.

According to the industry players, the figures initially presented to them as probable green energy auction reserve (GEAR) price for offshore wind could be in the range of P9.87 to P15.90 per kWh – depending on the technology to be deployed in the installations.

For fixed bottom offshore wind projects, it was emphasized that the calculated tariff was roughly P10 per kWh; while floating offshore developments would warrant higher rate of up to P16 per kWh.

They hinted that the numbers were drawn from the outcome of a study undertaken by the Asian Development Bank (ADB), as part of a technical assistance that the multilateral lending firm had extended to the Energy Regulatory Commission.

The offshore wind investors are anticipating auction for initial capacity on the technology by next year, although the DOE indicated that it has yet to firm up schedule on that.

When asked on the anticipated GEAR, ERC Chairperson Monalisa C. Dimalanta asserted that the final report on the ADB study had just been submitted to the regulatory body.

“The final report will be deliberated upon by the Commission and then subjected to public consultation before we can finalize,” the ERC chief stressed.

Most of the sponsor-firms are eagerly awaiting the GEAR that shall be enforced for offshore wind because that will be the main anchor of their investment-decisions, especially if the resulting tariff would be justifiable with their targeted project-lenders.

In the last GEA for other technologies, one of the concerns raised by investors had been the scale of reserve prices set per technology; with many of them apprehensive on advancing their projects if the GEAR price will end up to be too low versus expectations.

Learning a lesson from that GEA tight spot, the ERC previously noted that it has been continuously updating its pricing dashboard on RE technologies so it can be prudently guided on its next round of GEAR calculations that will underpin the RE capacity auction of the energy department.

For offshore wind, in particular, the country’s development target will be a mammoth 19 gigawatts – and this will be a core component of the country’s energy transition goal which will have it major turning point by mid-century.