The Philippines is betting on battery energy storage systems (BESS) to achieve its ambitious renewable energy (RE) targets and build a more sustainable energy future.
With goals of 35-percent RE in the generation mix by 2030 and 50 percent by 2040, the Department of Energy (DOE) sees BESS as a crucial component in integrating intermittent renewable sources like solar and wind, ensuring grid stability and reducing reliance on imported fuels.
The country anticipates nearly 3,800 megawatts (MW) of installed BESS capacity by 2033, a move that promises to transform the RE landscape. DOE data reveals 1,850 MW of committed BESS projects by 2030 and 1,951 MW of indicative projects by 2033, as of November 2024. The agency projects 330 MW of BESS capacity coming online this year alone.
“We have seen that battery electricity storage is a crucial technology for the Philippines,” the DOE said.
“With its current energy infrastructure facing challenges such as high costs and unreliable power supply, battery storage provides a reliable and cost-effective solution. …with the right support and investment, battery electricity storage can help transform the energy landscape of the Philippines and provide a sustainable future for generations to come,” it said.
The DOE formalized its commitment to BESS by issuing Department Circular No. 2023-04-0008 in 2023, establishing the energy storage system policy for the electric power industry. The circular defines BESS as systems capable of storing electricity electronically, enabling both charging and discharging.
Investor confidence
The rapid expansion of the RE sector has spurred significant investor interest in BESS projects.
Terra Solar Philippines Inc. (TSPI), a unit of MGEN Renewable Energy Inc. (MGreen), recently signed a BESS supply agreement with Huawei International, Pte. Ltd. for the MTerra Solar project. This marks Huawei’s largest BESS project for an integrated solar photovoltaic (PV) and BESS facility. Meralco PowerGen, the power generation arm of Manila Electric Co., is MGreen’s parent firm.
The agreement covers the entire 4,500 megawatt-hour capacity of the MTerra Solar project, which will combine 3,500 MW peak of solar PV with 4,500 MWh of BESS.
Citicore Renewable Energy Corp. (CREC) also teamed up with Chinese firm Sungrow Power Supply Co., Ltd. for BESS to support its RE projects, procuring 1.5 gigawatt-hours of BESS from Sungrow for its nationwide solar power projects.
San Miguel Corp., through its power arm SMC Global Power Holdings Corp., announced plans for 1 GW of BESS projects nationwide. Other major players, including Aboitiz Power Corp. and First Gen Corp., are also actively developing their own BESS projects.
Green energy auction
The DOE signaled its commitment to BESS by including Integrated Renewable Energy and Energy Storage System (IRESS) in the Green Energy Auction 4 this year. IRESS combines RE technology with energy storage systems (ESS).
The DOE said the IRESS integrates RE sources with energy storage technologies like batteries, flywheels or pumped storage hydropower systems. This allows RE plants to optimize operations by storing excess energy during peak production and utilizing it when needed, thus reducing the burden on the grid.
The agency said that by combining RE and energy storage, IRESS enhances the stability and reliability of the energy system, ensuring a more consistent and efficient power supply. The DOE, in collaboration with development partners, is currently studying the design and economic viability of IRESS.
Navigating challenges
While the outlook for BESS in the Philippines is bright, challenges remain.
The DOE acknowledges the high upfront costs of battery storage systems. A lack of standardization and concerns about the environmental impact of certain battery technologies, particularly lithium-ion, also pose challenges.
Regulatory uncertainty, with the BESS regulatory environment still evolving, adds another layer of complexity for investors and developers.
Despite these hurdles, the DOE remains steadfast in its belief that BESS is a critical component of the Philippines’ transition to a cleaner and more sustainable energy future. The country is betting on batteries to power its way forward.