DOE says wind power price will ease over time

The Department of Energy (DOE) said the preliminary price cap set for the country’s offshore wind auction may look high for now, but is expected to go down in the long run as the market develops.

Energy Undersecretary Mylene Capongcol said the proposed Green Energy Auction Reserve Price (GEAR) of P10.3859 per kilowatt-hour for fixed-bottom offshore wind projects reflects the early stage of the technology in the Philippines.

She likened it to the experience of solar power under the feed-in tariff scheme. Rates were initially high but these fell sharply as capacity expanded and costs declined.

“If you recall, solar back then was P9.69, it’s high,” Capongcol said. “But eventually, it went down and then the market price went down as far as 350 is concerned.”

GEA-5

The Energy Regulatory Commission earlier approved the preliminary GEAR for the fifth Green Energy Auction (GEA-5). These will cover fixed-bottom offshore wind projects for delivery between 2028 and 2030. The draft price will undergo public consultation before it is finalized.

Capongcol said the setting of a preliminary GEAR price was also meant to support offshore wind developers that have already secured service contracts from the DOE.

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She said the department initiated the first fixed-bottom offshore wind auction to ensure these projects have a market, as developers are already moving forward based on their approved work programs.

“It would be unfair for them if they don’t have a market. So, we facilitate the market, but it’s a responsible development of renewable energy,” Capongcol said.