ERC clears Cebu battery deal to ease Visayas power risks

The Visayas power grid is set to gain additional backup capacity after regulators cleared a battery storage deal that could help reduce recurring power alerts and ease electricity costs.

The Energy Regulatory Commission (ERC) said Monday it granted provisional approval for the Ancillary Services Procurement Agreement (ASPA) between the National Grid Corp. of the Philippines (NGCP) and East Asia Utilities Corp. (EAUC), allowing a battery energy storage system in Mactan, Cebu, to provide additional reserves to the Visayas grid.

Under the five-year agreement, EAUC’s 44.72-megawatt (MW) battery facility will provide NGCP with up to 13 MW of firm Regulating Reserve and 13 MW of firm Contingency Reserve to help maintain grid stability during generation outages and fluctuations in electricity demand.

“The Visayas needs additional capacities now, not months from now. We gave this application priority because every additional firm, reliable reserve in the grid helps reduce the chance of yellow alerts and the disruption they cause,” ERC Chairperson and CEO Francis Saturnino C. Juan said.

The Department of Energy estimated that deploying additional battery storage capacity in the region could cut power alerts by roughly half.

Apart from improving grid reliability, the agreement could also help lower electricity costs.

The ERC approved a provisional rate of P5.28 per kilowatt-hour (kWh) for both reserve services, significantly below the roughly P21 per kWh average price in the Visayas Reserve Market.

The lower contracted rate could help reduce ancillary services costs passed on to electricity consumers.

To ensure cost efficiency, the ERC directed NGCP to schedule the contracted capacity at the least cost and submit monthly reports on ancillary services costs passed on to consumers.

The provisional approval, issued 9 October, remains subject to final evaluation, with hearings scheduled for 3 and 10 November.