DUBAI, UAE – Ayala-controlled ACEN Corporation, which has been expanding its investment foothold across foreign markets, is batting for capacity auction that will primarily delve with integrated renewable and energy storage system (IRESS) as prospective replacement for capacities that shall be voided by the targeted retirement of coal plants.

During an Energy Transition panel discussion at the Philippine Pavilion as a COP28 side event hosted by the Asian Development Bank (ADB), ACEN President and CEO Eric T. Francia indicated that their company is a strong proponent of the IRESS, “which is incorporating energy storage, particularly battery storage behind-the-meter at the plant source.”

According to him, ACEN already conveyed this proposal to the Department of Energy (DOE) as possible strategy forward in the next rounds of green energy auction (GEA), instead of continuing with tenders on pure solar capacities that are intermittent, and will in turn be causing severe strain on the grid.

“In an ideal world, we shall not be retiring the coal plant or replacing that with intermittent renewable energy,” he said, while specifying that a likely viable solution will be renewables in tandem with energy storage.

Francia reiterated “when we shut down the coal plants, we should not be replacing them with intermittent sources and we should be able to demonstrate that so we would not be adding problems to the grid. That’s what I meant by clean, reliable and dispatchable; and avoiding the hidden cost of transmission.”

By relentlessly adding intermittent renewable capacities, he emphasized that there are ‘hidden costs’ that have to be factored in into that investment paradigm – including the need to extend more transmission lines which could be concretized at a staggering cost of $1.0 million per kilometer, then additional capital outlay for high voltage transformers as well as static synchronous compensator (STATCOM) for reactive power support in the system.

“While we agree that there are energy source across the system for ancillary services and so forth, we should have enough storage behind the meter, hence, IRESS,” he stressed.

Francia opined “transmission is like a road network, you maybe solving the problems in the super highways, but to get to that super highway, there’s clogging in the local roads. How to declog the local roads? You put storage behind the meter at the plant source; and that’s the value of IRESS.”

The ACEN executive added “what I’m saying is, let’s be careful because if we will just promote renewable energy without IRESS, it’s something that is difficult.”

For instance, he cited that if intermittent solar capacities are already underwritten with 20-year power supply agreements (PSAs), that can no longer be tweaked easily without regulatory snags.

“If I sign up my solar plant for 20 years (under the) green energy auction, I wouldn’t be able to touch that anymore and put my storage because of regulatory issues,” Francia expounded.

It is his wish then that the Philippine energy market will not be placed in an awkward position wherein it will just keep waiting for the right time to do IRESS, but the power grid will already be reaching its breaking point because of too much variability being injected into the system.

Francia specified “the good news is: IRESS is already competitive compared to gas, that’s some sort of good news because LNG (liquefied natural gas) is expensive and Malampaya in the Philippines is now declining,” with him noting that at prevailing gas costs, IRESS can already compete.

“To me it’s a ‘no regret move’ to start pushing IRESS, especially when fossil fuel prices are elevated and volatile, because no one knows where LNG prices are headed, no one knows where forex are headed and that’s 70-80% of the cost which is the alternative if you don’t do IRESS. So, I just want to link this in terms of pairing this with the coal plant retirement,” he pointed out.