Government pushes for lower cost of offshore wind development

MANILA, Philippines — The Marcos administration is now studying mechanisms to reduce the cost of developing offshore wind projects following its geothermal de-risking strategy, a senior energy official said.

Energy Undersecretary Rowena Cristina Guevara said the Philippines is currently in talks with multilateral banks and looking at ways to lower the high capital requirements for the technology.

“Offshore wind is capital-intensive, and emerging markets face higher financing costs due to perceived risks like typhoons,” Guevara said yesterday at the APAC Wind Energy Summit in Australia.

The government, she said, is likewise considering the implementation of “blended finance and risk-sharing instruments” to address financing challenges in offshore wind development.

Guevara did not provide further details on this move, but this could potentially resemble the government’s geothermal de-risking facility, which aims to lower financial risks for developers.

The Department of Energy (DOE) is set to roll out next year a $250-million funding aimed at addressing the high cost and risk of early-stage geothermal exploration.

Apart from financing, Guevara also highlighted the need to clear the regulatory and permitting bottlenecks that stand in the way of offshore wind developers.

Despite its potential, offshore wind development in the Philippines is tangled in bureaucracy, with the permitting process typically involving more than 25 agencies.

As such, Guevara said the DOE has unveiled a permitting and consenting guidebook to clarify requirements and timelines for developers.

She also said that the government is working closely with the National Grid Corp. of the Philippines to ensure the transmission network is ready for the entry of offshore wind capacity.

“Even when projects are ready, bottlenecks occur if the grid is not prepared,” Guevara said, emphasizing the importance of “synchronizing project timelines with grid expansion.”

To support offshore wind development, the DOE has also teamed up with the Philippine Ports Authority for the modernization of three priority ports in Batangas, Ilocos Norte and Camarines Norte.

The port upgrade aims to ensure that the facilities can handle the installation, commissioning and operational requirements of offshore wind projects.

The DOE is set to launch the country’s first-ever offshore wind auction this year, offering 3,300 megawatts of capacity.

With this auction, the government aims to deliver the first kilowatt-hours of offshore wind power before the end of President Marcos’ term in 2028.