More offshore wind and rising inflation, is there a connection?

That question propped out of my mind when I read that more offshore wind (OSW) are being offered by the Department of Energy (DOE) under the Green Energy Auction (GEA) program.

- Bienvenido S. OPLAS JR.

See for instance these recent reports in The STAR written mostly by Brix Lelis: "Over 16 gigawatts offshore wind power seen by 2028 - DOE" (Jan. 20), "Philippines unveils offshore wind roadmap amid permitting gridlock" (June 24), "Offshore wind auction on track this year - DOE" (Aug. 16), "Luzon ports to be converted into offshore wind sites" (Sept. 1).

As of end-July, the DOE issued 87 OSW service contracts with a combined capacity of about 68,000 megawatt. That is huge. Like around 5,000 MW in Mindoro alone, around 4,000 MW in CALABARZON, 3,600 MW in Ilocos Norte and Cagayan, around 2,000 MW in Camarines Norte and Sur, 650 MW in Northern Samar, nearly 2,000 MW in Negros-Guimaras-Iloilo, and many other provinces.

The DOE's GEA-5 targets 3,300 MW in fixed-bed OSW. These are targeted to further increase the RE share in total power generation from the current 22 percent (mainly geothermal and hydro) to 35 percent by 2030 and 50 percent by 2040. So far the DOE has not produced yet what would be the levelized cost of electricity (LCOE), and much more the levelized full cost of electricity (LFCOE) to include the cost of battery, pumped storage and diesel back up power plants as ancillary services. High RE share means high LFCOE and we do not know yet the impact on electricity prices in the future, which very likely will be higher.