The search for the next significant market in Asia in offshore wind is on. After Taiwan, we are seeing significant interest in South Korea with many of the global investors present in the market and progressing with permitting and approvals ahead of the auction later this year. But in the meantime, quietly, but assuredly, the Philippines government has been progressing with developing its own market. With good wind resource and progress of the green energy auction programme (GEAP), the hope is that in early 2025 an offshore wind round will be launched for the sector.

In April 2023, the Department of Energy had announced over 60 wind energy service contracts have been signed and almost 50GW of capacity was being earmarked for development. The contractors include serious contenders such as CIP who formally opened their office in country this week, Bluefloat and Corio Generation to name a few.

The GEAP process will set a reserve price by the government (and so the hope is that for this round there will be separate processes for fixed bottom and floating projects given the price differentials between technologies) that will then permit the participants to bid a 20 year Green Energy Tariff (GET) for their sites.

Investors are hoping that the Guidelines to be published will build on the earlier rounds and be optimised to attract competitive bids. There are still some concerns relating to elements of the GEAP which include:

1. Bonding volumes, the prospective bid/performance bonds that bidders will be asked to post are materially higher than we see in comparative markets.
2. Given the size of the projects, funding is expected to include the need for USD financing; the GET has no indexation protection for foreign currency or inflation which means the price bid needs to pre-load expected inflation. If some protection can be offered expected pricing could be more competitive for the round.
3. The Philippines market doesn't have the traditional state offtake power purchase agreement and TRANSCO will only sign a renewable energy payment agreement. This means that there is some exposure to curtailment, delay, no deemed commissioning or change of law protection. If the Guidelines can consider these issues then we expect more competitive pricing and greater interest in the market.

The Philippines is attracting all of the right interest at the moment and has a real opportunity to lock in some excellent projects. This is in contrast to Vietnam where a number of sponsors have announced their exits from the OSW market as the view is that projects and opportunities are still a long way from coming to market. The window for the Philippines is open now and it looks like the government is committed to bringing projects to market in the next year.