Energy storage needed amid renewables influx
MANILA, Philippines — As the Philippine renewable energy sector gains more steam, the government may find another bottleneck in accommodating clean power sources if battery storage systems remain scarce, an industry executive said.
Eric Francia, president and chief executive officer of ACEN Corp., flagged this looming issue as more renewable projects sprout, particularly those that involve solar photovoltaic systems.
“We still have a lot of pure solar that’s coming online. That’s my concern. Do we have enough grid capacity to absorb all that intermittent variable pure solar without battery [storage]?” Francia told the Inquirer.
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The Department of Energy is gunning for the fourth wave of the green energy auction program, which would focus on an integrated format—that is, complementing a renewable energy facility with storage technologies.
However, Francia said standalone battery facilities are still needed. But the economic viability of deploying battery energy storage systems (BESS) due to the lack of price volatility in the local market is a concern for investors, he added.
BESS is a technology that enables power producers to store their generated electricity for later use. It complements the booming renewables market, given the intermittent nature of solar and wind in producing electricity.
The CEO said the cost of battery storage is estimated to have dropped to around $200,000 per megawatt-hour, which is already a lot less compared to $1 million five years ago.
Volatility is key
How do investors earn from battery storage? More price volatility means more money for operators, as they can draw and store excess power from renewable sources and discharge the generated electricity to the grid when prices are high.
Francia said battery storage use in Australia is already “scaling up” given that country’s “open market design,” making it an attractive destination for energy players.
Australia’s price caps, he noted, were not that low. “It’s generous enough to let the market forces work,” he said.
“Unfortunately, in the Philippines, that price cap is low. It’s 20 times lower. So you don’t get a lot of price volatility here. And therefore, battery storage is not a viable standard on investment,” Francia added.
The ACEN chief urged policymakers to develop programs that would encourage more investments in battery storage systems.
For their part, Francia said that while the Philippines remains ACEN’s core and largest market, the group is planning to build more battery storage projects for its operations abroad, particularly in Australia. It has already begun constructing the first phase of ACEN’s 400-megawatt-hour BESS in New South Wales.
