The Department of Energy announced a significant reduction in performance bond requirements for offshore wind projects from 20% to 5%, marking a major shift in renewable energy policy.
Energy Undersecretary Rowena Cristina Guevara revealed the policy change during a year-end gathering of wind industry leaders.
“The DOE has heeded your suggestion, so we went from 20 percent to just five percent for the performance bond,” Guevara told representatives from the Wind Energy Developers Association of the Philippines, Pilipinas Offshore Wind Energy Resource Inc., and the Global Wind Energy Council.
The revised requirement will be incorporated into the terms of reference for the fifth Green Energy Auction, scheduled for the third quarter of 2025.
Industry experts estimate that offshore wind installations cost between $3 million to $7 million per megawatt, making even the reduced performance bond a substantial financial commitment.
Project developers must post these bonds as guarantees, which the government can forfeit if companies fail to meet their electricity delivery commitments.
“Because we need to ensure commitment from developers, we don’t want fly-by-night investors; so there are a lot of requirements,” Guevara emphasized.
The policy shift comes as the Philippines aims to expand its renewable energy portfolio, with offshore wind power playing a crucial role in the country’s energy transition.
Sixteen developers have already submitted proposals for pre-development environmental compliance certificates to the Department of Environment and Natural Resources.
One developer has secured both the environmental compliance certificate and a certificate of confirmation of commerciality, allowing their project to advance to the development phase.
Developers note that final project costs could increase based on factors including water depth, distance from shore, and regulatory compliance requirements.
Industry stakeholders remain optimistic that technological advancements and economies of scale will help reduce future investment costs for offshore wind projects.
