Manila: Filipino business tycoons are turning into battery barons. At times competing and at time cooperating, they're all now racing to ramp up megawatt-scale “power banks” – including ones on floating platforms.
Multi-billion-dollar power bank projects had been completed or in the roll-out stage in more than 60 locations across the archipelago. That's just for container-size battery energy storage systems (BESS).
It's a turnaround from rolling power blackouts that sank the economy and killed jobs in previous years.
How did it happen?
A confluence of factors.
For one, the Philippines tweaked its energy laws.
Another key move: The One-Stop Action Center for Strategic Investments within the Philippine Board of Investments (BOI). The centre's mission: to expedite the processing of permits and licenses for strategic investments — those with significant economic impact — in a whole-of-government kind of approach.
Now, the Asian country aims to be among the world leaders in the use of grid-scale batteries.
Another strategic move is the legislation allowing the expansion of undersea cables interconnecting power grids among the country's main islands. This has created a market of inter-island trading in electricity.
So far, the Philippines registered a total of 1,504 megawatts (MW) of proposed BESS projects, as per the Department of Energy (DoE) in 2023. That number has been bumped up today.
One provider alone – San Miguel Global Power (SMGP) – has earmarked more than 1,000 GW of BESS in 32 sites.
These containers pack a punch: they store much-needed electricity for contingency – or “dispatchable reserves”, thus avoiding the need to build "peaker" plants powered by fossil fuel. The tech behind BESS is about to unleash an energy revolution.
A cluster of BESS facilities rated at 1.5 Gigawatt-hours has enough juice to power up to 10,000 Filipino homes for one month.
Where a BESS breaks new ground: As more, cheaper wind, solar, geothermal and hydro-electric capacities enter the power mix, BESS helps offset intermittencies, and increases power reliability.
Its full potential is now being put to work to bolster the country’s energy security and power reliability.
Game-changer
The Philippines, which has some of the most expensive power rates in South-east Asia, has rejigged its energy policy.
Republic Act No. 9136, also known as the Electric Power Industry Reform Act of 2001 (EPIRA), allows for trading of power reserves between connected islands. The law has changed the game by enabling the interconnection of power grids and the trading of power reserves between the islands.
It's only getting started.
The same law also now provides for “net metering”: those who produce their own energy (i.e. through solar, wind, etc) and use two-way electric metres could, in practice, sell excess power back to the utility, albeit at a lower rate than they would buy it.
The new rules have created a situation where power production and usage have become centralised and decentralised at the same time.
More impotantly, BESS helps reduce the need to generate power from non-renewable energy (such as diesel or coal), while improving power quality.
Savings
Recently, the government of President Ferdinand Marcos Jr has unleashed a raft of measures to further secure, stabilise and lower power rates. These include “green-lane” approvals and incentives.
More end-users, including companies, are now rolling their own BESS systems, too. For example, the SM Group, one of the largest real estate developers in the Philippines (operating 88 malls in the Philippines) has been actively exploring the integration of BESS into its operations to enhance energy efficiency.
Top players
Filipino tycoons are at the forefront of this aggressive mega-power banks rollout.
The ultimate aim: help the country compete with its neighbours in grabbing more investors, especially in power-hungry sectors like manufacturing.
Conglomerates led by tycoons including the Aboitiz family, the Ayalas, Ramon S. Ang, Manny V. Pangilinan, and Edgar Saavedra are pouring billions of dollars into renewable power projects, coupled with BESS farms.
Compared to the rolling blackouts that crippled the economy and sent investors away as power was rationed in the 1990s and early 2000s, it’s been a huge turnaround.
BESS projects and initiatives
These are the leading companies involved in installing BESS, along with their notable projects and capacities:
#1. Meralco | MGen
Investment/capacity: $3.29 billion
One BESS-backed energy project registered with the BOI last month (July 2024), involves a Php185.28 billion ($3.29 billion) investment, with potential to create 4,165 jobs.
The “green lane” certificate was given to this project, received by Filipino business tycoon Manny Pangilinan and Meralco PowerGen Company (MGen) president and chief executive officer Emmanuel Rubio.
TSPI is a subsidiary of SP New Energy Corporation (SPNEC) chaired by Pangilinan and MGen Renewable Energy, Inc. (MGreen), the renewable energy arm of MGen — a unit of Pangilinan-led Manila Electric Company (Meralco).
118,000 GWh
Total electricity consumption in the Philippines in gigawatt-hours (GWh) in 2023, up 55.5% from 75,870 kWh from 2013 (Source: Statista)#2. SMC | SMGP
Investment/capacity: 1,000 MW (1 GW) of BESS
San Miguel Global Power (SMGP), a unit of San Miguel Corp., is now operating BESS facilities at 32 locations in the Philippines, across the regions of Luzon, Visayas, and Mindanao.
Overall, the company is putting up approximately 1,000 MW (1 GW) of BESS facilities strategically located in a number of provinces including Albay, Bohol, Cagayan, Cebu, Davao del Norte, Davao de Oro, Isabela, Laguna, Leyte, Misamis Oriental, Pampanga, Pangasinan, and Tarlac.
The commercial operations of approximately 1,000 MW of BESS facilities across 32 locations in the Philippines will ensure the reliability of the grid, especially in areas that are in most need of power quality solutions, the company said.
1,500,000 kWh
Monthly power consumption for 10,000 households in the Philippines (1.5 GWh)#3. Energy Development Corporation (EDC)
Investment/capacity: 1,705 MW ($500 million)
EDC, the largest producer of geothermal energy in the Philippines and the second-largest in the world, is focusing on integrating BESS with its power plants to enhance grid stability and optimise energy output.
Besides geothermal, it is also involved in alternative energy projects, including hydroelectric and wind energy projects. Before the year is out, EDC is set to put four geothermal power facilities online, with a capacity of 82 MW.
By the end of 2024, three BESS projects are expected to go online:
- 20-MWh BacMan BESS in Bicol
- 10-MWh Tongonan BESS in Leyte
- 10-MWh Negros BESS
Company officials say these seven projects would bring the company’s total installed renewable energy capacity to 1,705 MW once completed.
By 2030, First Gen is aiming to have 13,000 MW of total capacity for its renewable energy and natural gas assets.
#4. ACEN
Investment/capacity: 535MW | 1.07GWh
The Ayala Group has become a major player ramping up renewables, including solar and wind, through ACEN (previously known as AC Energy Corp) its listed energy arm investing in BESS to support its renewable energy initiatives.
ACEN completed a BESS portfolio of 22 projects, bumping up capacity equivalent to a total of 535 MW/ 1.07GWh.
The company has taken an aggressive push for renewables. Its coal-fired power plant in Batangas province first came online in 2015, with an expected service life of 50 years.
#5. Aboitiz Power
Investment/capacity: 248 MW
Aboitiz Power is scaling up its BESS portfolio to support renewable energy integration and grid reliability, a key component of its 10-year growth strategy.
This hybrid approach is a pioneering project in the Philippines, showcasing a unique, movable solution to delivering fast and reliable energy. It’s just one of Aboitiz Power's 12 projects, totaling 248 MW over the next decade. This innovative facility will serve as a blueprint for the company's future battery investments and hybrid renewable energy initiatives.
#6. Citicore Renewable Energy Corp (CREC)
Investment/capacity: 5,000 MW (by 2028)
Filipino construction tycoon Edgar Saavedra of Citicore Renewable Energy Corp (CREC), has unveiled his ambition to install 1,000 megawatts of solar power capacity per year in the next five years, following a 5.5-billion-peso ($97.8 million) initial public offering on June 7, 2024.
The IPO came along with a strategic stake sale with a Philippine financial powerhouse and its partnership with India's GMR Group.
CREC also made known its aim to bid for the BESS, Solar, and on-shore energy technologies at the upcoming fresh round of the government’s Green Energy Auction program (GEA-3) this August.
To date, CREC has 285 MW of installed solar energy capacity. Under a five-year plan, CREC aims to contribute 1,000 MW of solar capacity per year – or 5,000 MW by 2028.
#7. Green Energy Auction (GEA-3)
Investment/capacity: 4,399 MW
The DOE is scheduled to proceed with the conduct of the GEA-3 programme, involving 4,399 MW of solar capacity in August. Specifically, the GEA-3 program (under the Green Energy Act) caters mostly to non-feed-in-tariff (FIT) eligible renewable energy technologies – including geothermal, impounding hydro, and pumped-storage hydro.
The run-of-the-river hydro which is eligible technology for FIT, will also be included. Eligible projects may receive various financial incentives, such as feed-in tariffs, renewable energy certificates, and tax incentives. The DOE provides technical assistance to project developers, including support for feasibility studies, environmental impact assessments, and grid interconnection procedures.
The programme supports grid-connected renewable energy projects up to 100 MW. The scheme is expected to ramp up renewables, thus reducing reliance on fossil fuels, especially coal.
The DOE aims to boost the share of renewables — including solar, wind, hydro, and geothermal power — in the generation mix to 35 per cent by 2030 and 50 per cent by 2040.
Boost in power generating capacity
Before 2024 is out, the DOE anticipates a substantial boost in power generation capacity, totaling 3,309 megawatts –including a significant contribution of 334 megawatts from BESS installed.
The Luzon grid will see a surge in renewable, led by solar farms (1,123.95 MW), followed by wind (160 MW). Hydro-electric power, geothermal, and biomass will also contribute, according to the agency.
150 kWh
average household consumption in the Philippines per month (Philippine Statistics Authority (PSA) dataSolar capacity deliveries have also enhanced the power supply during the summer months including the Subic solar power facility (86.2MW), Lal-lo solar facility (82.488MW), and Cayanga-Bugallon solar farm (75MW).
All told, the DOE has listed 2,097 MW of new solar projects expected to come online between January 2023 to December 2025. These include the 100-MW PAVI Green solar project in Naga due in December 2024 and the 200-MW Concepcion Tarmac 2 Solar Power Project due in December 2025.
In June, wind energy saw additions from the initial phase of the Balaoi and Caunayan wind farm (445.15MW).
Earlier in March, geothermal capacity rose with the commencement of the Tiwi and Palayan binary plants, while development in Isabela province will boost biomass capacity.
Luzon and Visayas: Multiple subsea cables connect these two main island groups, ensuring power transmission between them.
Visayas Islands: The islands of Cebu, Negros, and Panay are interconnected through subsea cables, enhancing regional power grid stability.
Mindanao and Visayas: There are subsea cables connecting Mindanao to the Visayas islands, facilitating power exchange between these regions.
