ERC to review ‘market share limit’ of storage system
By Myrna M. Velasco – November 27, 2022, 8:30 PM
from Manila Bulletin
The Energy Regulatory Commission (ERC) will review the market share limitation of battery energy storage system (BESS) given its current classification as a “generation” capacity based on the prevailing policy by the Department of Energy.
ERC Chairperson Monalisa C. Dimalanta said “that’s being studied now by ERC and the DOE because current DOE classification for BESS is generation, so BESS capacity is counted fully in determining market share limitation.”
The review of the regulatory body will be anchored on the provision of the Electric Power Industry Reform Act (EPIRA), under Section 45 (a) which prohibits generation companies from owning more than 30-percent of the installed capacity per grid and 25-percent of installed capacity on a nationwide basis.
The ERC has been evaluating the market share limits to be imposed on each power generation company on a yearly basis. So far, after more than 20 years of market restructuring in the power industry, no player has been found to be violating that prescription yet of the EPIRA.
Currently, the biggest battery energy storage installation proposed in the country hovers at 4,500 megawatt-hours. This will form part of a power company’s commitment to supply 850 megawatts of mid-merit capacity to Manila Electric Company (Meralco).
SMC Global Power Holdings Corp of the San Miguel group is already years ahead on its BESS installations, while Aboitiz Power Corp. is catching up.
Investors have been seeking clarity in policy enforcements as well as regulatory frameworks before they could inject capital into this flourishing sector. Absent that, it was emphasized that policy and regulatory uncertainties will be impeding their investment plans.
The ERC cannot give definitive statement yet on how will that eventually be computed as capacity to be captured in determining the ownership or market share of generation companies.
Players in the sector are also batting for modification of the definition of BESS as “generation”, which was based on a circular issued by the DOE way back in 2019.
They argued that BESS deployments go beyond the sphere of generation, because the technology is also ideal for transmission and distribution enhancement support, primarily in addressing the ancillary services needs of a power grid in addition to its use in commercial and industrial applications.
Energy Secretary Raphael P. M. Lotilla sounded off that they have been re-evaluating BESS so the department can establish warranted policy adjustments that shall be incorporated in the framework for investments on this technology.
With the massive renewable energy (RE) investments that the country is expecting to materialize over the next 20 years, the technology coupling that the project sponsors would be leaning on will be battery energy storage, especially if they will re-position RE as replacement to mid-merit and baseload sources of generation.
