Philippine Regulator Grants Provisional Approval for 44.72 MW Mactan Battery Storage Deal to Support Visayas Grid

The Energy Regulatory Commission (ERC) issued a provisional approval on 9 October for the Ancillary Services Procurement Agreement (ASPA) between the National Grid Corp. of the Philippines (NGCP) and East Asia Utilities Corp. (EAUC), clearing the way for a battery energy storage system in Mactan, Cebu, to supply additional reserves to the Visayas grid.

November hearings to decide the fate of NGCP-East Asia Utilities pact

The approval remains subject to final evaluation, with hearings scheduled for 3 and 10 November that will determine whether the provisional clearance is made permanent. Regulators moved quickly on the application.

"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 commission's decision to prioritize the application reflects its assessment that additional firm, reliable reserves reduce the chance of yellow alerts and the disruptions they cause, according to Juan.

The timing is significant. Earlier this month, the Visayas grid was placed under yellow and red alerts from Tuesday afternoon into the following day, underscoring the pressures the agreement is intended to address.

Five-year commitment: up to 13 MW each of regulating and contingency reserve

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.

These services are intended to help maintain grid stability during generation outages and fluctuations in electricity demand.

The Department of Energy estimated that deploying additional battery storage capacity in the region could cut power alerts by roughly half, a projection that regulators weighed in granting the provisional clearance.

Contracted rate set at USD 0.084 per kWh versus USD 0.335 in the reserve market

Beyond reliability, the agreement carries potential benefits for electricity costs.

The ERC approved a provisional rate of USD 0.084 per kilowatt-hour (kWh) for both reserve services, significantly below the roughly USD 0.335 per kWh average price in the Visayas Reserve Market.

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

NGCP ordered to schedule capacity at least cost, report monthly

To ensure cost efficiency, the ERC directed NGCP to schedule the contracted capacity at the least cost and to submit monthly reports on ancillary services costs passed on to consumers. These safeguards accompany the provisional rate as the agreement proceeds through final evaluation.

With the November hearings set, the deal now moves toward a determination of whether the provisional approval will be made permanent, a decision that will shape how the Visayas grid manages recurring power alerts and the costs of its reserve services.