Posted on June 1, 2026
By: Ann Francisco
The Philippines is at an important energy crossroads.
As power demand rises, the country has an opportunity to shape an energy system that strengthens domestic energy security, resilience and industrial capability over the long term, while managing exposure to external fuel price dynamics.
This is why offshore wind must be viewed through a wider lens.
Too often, discussions around offshore wind begins and ends with the headline number: cost. That is understandable. Electricity affordability matters to every Filipino. But major energy infrastructure should not be judged solely by its starting price. It should also be assessed by what it enables over time.
Offshore wind is capital-intensive at the outset. Around 70 percent to 80 percent of a project’s lifetime cost is incurred before a single kilowatt-hour is generated. These upfront investments include turbines, foundations, subsea cables, transmission systems, port upgrades and installation vessels. But these are not short-term expenses. They are long-life infrastructure investments designed to operate for 25 to 30 years.
Seen from that perspective, offshore wind is not simply another power project. It is a long-term investment in stable domestic generation, lower exposure to imported fuel costs and greater resilience against global price volatility.
In the Philippines, offshore wind is being pursued largely through competitive auctions and commercial financing. There are no major capital grants underwriting construction and no broad sovereign guarantees absorbing project risk. Developers must raise financing under prevailing market conditions. Within this framework, government sets the reserve price and auction design as part of broader energy planning. The pricing that emerges is not dictated by any one developer. It reflects the realities of financing large-scale infrastructure in a new sector under Philippine market conditions.
This is a fiscally prudent approach. It preserves market discipline. But it also means early-stage pricing will naturally reflect the financing and infrastructure constraints of launching a new industry from the ground up.
That is why context matters.
Some observers have described Philippine offshore wind as among the most expensive in the world. But early-stage offshore wind markets elsewhere followed similar trajectories.
When the United Kingdom began scaling offshore wind in the early 2000s, initial projects were contracted at prices equivalent to more than P11 to P13 per kilowatt-hour in today’s Philippine peso terms. As auctions matured, supply chains expanded, and the market scaled, costs fell significantly. Even with more recent inflation and supply chain pressures, the UK’s latest auction round still cleared at equivalent to roughly P6 to P7 per kilowatt-hour.
Taiwan’s first commercial offshore wind round in 2018 also carried feed-in tariffs equivalent to around P10 to P11 per kilowatt-hour in today’s peso terms. Those early projects reflected greenfield risk, limited domestic infrastructure and a developing regulatory environment. Later rounds became more competitive as the market matured. South Korea and Japan also remain in relatively earlier stages of offshore wind development, with pricing still shaped by constraints common in emerging markets.
Seen in that context, the Philippine reserve price of P11 per kilowatt-hour falls within the range observed in other markets during their early commercial stages. The more relevant question is not whether first projects immediately match the prices of mature markets today. It is whether the Philippines is creating the conditions for costs to decline over time.
That is typically how offshore wind industries evolve. Early projects establish the infrastructure, regulatory certainty, technical capability and investor confidence that later projects build upon. Over time, those foundations help reduce costs and improve competitiveness.
Energy policy, however, is not only about price. It is also about risk.
The Philippines imports a significant share of its coal and fuel needs. That leaves the country exposed to global commodity swings, currency movements, supply disruptions and geopolitical tensions, all of which can drive up domestic power costs. That vulnerability remains embedded in the current system. Offshore wind changes that equation. Once operational, it does not depend on imported fuel or just-in-time fuel supply chains. Its resource is domestic and its operating profile is more stable and predictable over the long term.
That is why the conversation should go beyond a single tariff figure. It should also consider the long-term cost of continued dependence on imported fuels versus the long-term value of building domestic energy infrastructure.
There is another dimension that deserves equal attention: national development.
A serious offshore wind industry can help drive port development, logistics upgrades, engineering capability and skilled job creation. It can support a domestic ecosystem that includes technicians, fabricators, vessel operators and coastal service industries. In time, it can generate broader economic value beyond the electricity it produces. For an archipelagic country like the Philippines, where maritime infrastructure and coastal economies are deeply linked to long-term development, that matters.
Environmental stewardship must also remain central to the conversation. Offshore wind generates electricity without fuel combustion, air pollutants or greenhouse gas emissions during operation. For a country highly vulnerable to climate impacts, reducing dependence on fossil fuels is not only an energy issue. It is also a resilience imperative.
At the same time, responsible development is essential. The Department of Energy and Department of Environment and Natural Resources (DENR) have signed a memorandum of understanding to strengthen coordination on offshore wind permitting and environmental oversight. Meanwhile, DENR is advancing Marine Spatial Planning Version 2 to better map ocean uses and help ensure that offshore wind development is aligned with fisheries, biodiversity protection, shipping routes and coastal livelihoods.
International experience shows that when projects are properly sited and regulated, offshore wind can coexist with marine ecosystems and local livelihoods. In some parts of Europe, safety zones around turbine foundations have reduced trawling pressure, allowing fish populations to recover. Over time, submerged foundations can also function as artificial reef structures that attract shellfish and smaller marine species. In more established markets, fishing groups are consulted early to map routes, seasonal fishing grounds and navigational concerns. Ports that once faced decline have gained new economic purpose through offshore wind activity.
For the Philippines, responsible development will require early consultation with coastal communities, transparent environmental safeguards and robust marine spatial planning. This is also why Global Wind Energy Council’s Offshore Wind for Coastal Development Socio-Economic Impact Study matters: It helps translate global experience into site-specific evidence so offshore wind can deliver long-term, inclusive and locally anchored benefits.
The debate today should not be framed as a choice between affordability and ambition. It should be about how the country builds an energy future that is more secure, more resilient and less exposed to external shocks.
The current reserve price does not represent the end state of offshore wind in the Philippines. It marks the beginning of a structured effort to launch a new industry under competitive conditions. Scrutiny is fair. Public debate is healthy. These strengthen policymaking. But short-term comparisons should not distract from the larger national question: what kind of energy system does the Philippines want by 2040?
If the answer is one that is more self-reliant, more resilient and better equipped for the future, then the country must be willing to start building toward that outcome now.
