GenCos bat for perks, regulatory framework for battery storage

By Myrna M. Velasco

With massive scale penetration of renewable energy (RE) facilities in the country’s power system starting next year, the generation companies (GenCos) are batting for incentive mechanism as well as prudent regulatory framework that will underpin the deployment of battery storage as complement to intermittent generating facilities in the power mix.

Power industry players perceive that battery storage installations are still not viable cost-wise. Nevertheless, it is a space they have been closely watching because the Philippines will be needing it in the immediate term because of the mammoth RE integration prescribed under the Renewable Portfolio Standards (RPS) policy of the government.

In the long term, RE’s coupling with commercially viable energy storage is similarly seen as a practicable technology development that could re-position renewable energy being able to match the baseload generation capability of more traditional technologies, including coal.

Aboitiz Power Corporation Chief Operating Officer Emmanuel V. Rubio indicated his company “is monitoring developments in battery storage,” with him emphasizing that they already have two pilot projects as their proof-of-concept to assess the commercial viability of the technology.

Eric Francia, president and CEO of AC Energy of the Ayala group, asserted that with the targeted RE installations through year 2030, battery storage will definitely come into the picture as supplementing tech to the on-and-off generation of resources like wind and solar; and even the cyclical generation of hydro assets.

But he said the cost of battery storage is not seen affordable yet in the pockets of Filipino consumers. The timeframe for it going down to the competitive level is in the next five years.

“Based on our economics, it is still high and we cannot support those kind of economics. But storage at this point is still enjoying that double-digit decline. I think the industry conventional wisdom that we subscribe to is, battery storage will need to break the 100,000/megawatt hour – that’s probably five years away from now or hopefully sooner, then that will put an all-in intermittent renewables plus battery at a reasonable P4.00 per kilowatt hour level which more or less could compete with gas and coal,” Francia opined.

He added that “long-term equilibrium of prices is probably somewhere in the 8 to 9 US cents per kilowatt-hour, and that’s where renewables and storage, gas or even coal might settle over time.”

For First Gen, it emphasized that it is looking at various battery storage technologies as prospective installations it could opt for – including those on pumped hydro and hydrogen-underpinned storage systems.

“What we’re doing is monitoring what’s happening in other markets because other countries seem to be developing faster than we are – and if you look at various storage costs, you can see the exponential drop in cost, that favors a system that will enable both variable renewable energy and battery storage combined,” First Gen President and Chief Operating Officer Francis Giles B. Puno stressed.

In an archipelagic country like the Philippines, he noted that the deployment of battery storage is also seen as concrete solution into setting forth cost-competitive as well as cleaner and reliable energy supply to the island-grids and far-flung areas.