ERC raises ceiling price for offshore wind auction
From AB Capital's The Opening Bell: Three Moves
Event
The ERC raised the GEA-5 offshore wind ceiling price to P11/kWh (from P10.39), covering 3.3GW targeted for 2028-2030 delivery. The revision reflects updated capacity factors, port rental, fishery compensation, land costs, and revised FX/inflation assumptions.
View
The higher cap improves auction bankability and bidder appetite, particularly given offshore wind’s high upfront capex and infrastructure dependencies. However, returns will be sensitive to capacity factors, ports, and grid readiness. We continue to view offshore wind as a longer-dated opportunity rather than a near-term earnings driver for listed power names.
Catalyst
Key watchpoints are the final GEA-5 bid outcomes and clearing prices, visibility on port and grid readiness, and evidence of credible developers participating.
Action
No immediate earnings impact. Structurally supportive for large RE players with balance sheet depth and long project horizons, but near-term focus remains on execution-ready solar, wind, and storage projects with clearer returns and commissioning timelines.
Disclaimer: The information, analyses, and views contained herein is based on sources which we, AB Capital Securities, believe are reliable, but is not guaranteed by us and is not to be considered all inclusive. It is not to be construed as an offer or solicitation of an offer to sell or buy the securities herein mentioned. AB Capital Securities and its Directors and Officers and/or members of their families may have a position in the securities herein mentioned and may make purchases and/or sales of the securities from time to time in the open-market and otherwise.
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