Philippines’ Renewable Energy Boom Faces Battery Storage Bottleneck

As the Philippine renewable energy sector continues to expand, the lack of battery storage systems may become a significant bottleneck in integrating clean power sources into the grid, an industry executive has warned.

Eric Francia, President and CEO of ACEN Corp., highlighted concerns over the country’s ability to absorb increasing renewable energy capacity, particularly from solar photovoltaic systems, without sufficient battery storage solutions.

Grid Capacity and Storage Challenges

The Department of Energy (DOE) is preparing for the fourth wave of its Green Energy Auction Program, which aims to integrate renewable energy facilities with storage technologies. However, Francia emphasized that standalone battery storage systems are still necessary to ensure grid stability and manage fluctuating power supply from renewables.

Investors remain cautious due to concerns over the economic viability of battery energy storage systems (BESS), given the lack of price volatility in the local energy market.

The Role of Battery Energy Storage

BESS technology allows power producers to store excess electricity generated from renewable sources for later use, helping mitigate the intermittent nature of solar and wind power.

Francia noted that the cost of battery storage has significantly declined, from $1 million per megawatt-hour five years ago to approximately $200,000 per megawatt-hour today. However, he stressed that without appropriate market conditions, large-scale investment in battery storage may not materialize.

Market Volatility and Investment Hurdles

In countries like Australia, battery storage deployment is scaling up rapidly due to a more favorable open market design. The Australian energy market allows operators to store and release power based on price fluctuations, making battery storage a profitable investment.

“Australia’s price caps are generous enough to let market forces work,” Francia said.

By contrast, he pointed out that the Philippines’ price cap is 20 times lower, limiting price fluctuations and making battery storage investment less attractive.

Francia urged policymakers to introduce regulatory programs that would encourage greater investment in battery storage systems. He emphasized that addressing these challenges is critical to sustaining the Philippines’ renewable energy momentum and ensuring long-term energy security.