The Department of Energy (DOE) will allot a lead time of at least eight months as preparation time for the targeted bid submission of investors under the planned green energy auction (GEA) for offshore wind capacities by next year.

According to Energy Undersecretary Rowena Cristina Guevara, the energy department is eyeing to issue an announcement for offshore wind capacity tendering by fourth quarter this year; and the submission of bids shall happen at least eight months after that.

“We will come up with announcement on that (GEA for offshore wind) by October or November; because we promised the investors that we will give them 8-month lead,” she said.

The energy official indicated that they are still assessing the scale of megawatts to be covered by that auction, although there were initial proposals from interested investors that it might be prudent for the DOE to separately carve out pilot-megawatts for both fixed bottom and floating offshore wind installations.

The DOE official also qualified that the schedule is still preliminary at this point, hence, there is no definitive month set yet for the offshore wind auction for next year.

Guevara reiterated that the initial megawatts from offshore wind plants are still anticipated on commercial stream by 2028, “that’s why we’re moving heaven and earth for the transmission lines and the port facilities so we can meet the target.”

On pricing for offshore wind, the study outcome of the Asian Development Bank (ADB) proffers tariff range of P10 to P16 per kilowatt hour (kWh), but the final green energy auction reserve (GEAR) price still rests with the final calculation and decision of the Energy Regulatory Commission.

In neighboring-markets like Taiwan, incentives for their offshore wind developments started with feed-in-tariff (FIT); then the succeeding auction rounds had been anchored on the price offers of developers that had been anchored on price cap set by the government.

However, for other key market like the United States, it emerged as a symbolic failure when it comes to the rollout of offshore wind projects due to the lack of robust indexation clauses in their contracts; and that in turn, had perilously exposed investors to inflationary risks, currency fluctuations as well as rising material costs through the project’s development cycle and operational lifespan.

Given unprecedented developments in the global economy, offshore wind investors in the US have found themselves trapped with lower cost contracts and that had not just delayed most of the projects, but it also led to cancellation and renegotiation of previously-sealed investment deals.