Scatec ASA and Aboitiz Power Corporation have successfully secured financial support for their ambitious projects in the Philippines. With construction poised to commence imminently, the initiative marks a pivotal step toward enhancing grid stability and maximizing the efficiency of the nation’s renewable energy resources.
The projects entail the integration of a 16 MW battery storage system at the existing Magat hydropower facility and a new 40 MW system at the Binga hydropower site, an expansion set to catalyze the energy sector by providing critical ancillary services. These services are increasingly central to grid management due to their capacity to stabilize frequency variations and integrate seamlessly with renewable energy sources, thus bolstering the grid’s reliability. Indeed, as grid stability becomes paramount amidst the Philippines’ renewable energy transition, the demand for such services is expected to climb, driving significant revenue potential.
A glance at the existing infrastructure reveals promising outcomes: the 24 MW battery system at the Magat plant, operational since 2024, has consistently generated steady revenues—a testament to the strategic value of these systems. This backdrop of proven efficacy and financial viability propels the joint venture forward, a sentiment echoed by Scatec’s CEO Terje Pilskog, who emphasized the intention to triple their storage capacity to 80 MW, amplifying the scope and efficacy of their ancillary services offerings.
From a financial standpoint, the equal 50% ownership by Scatec and Aboitiz Power underscores a robust partnership, backed by a project debt facility that leverages existing finance arrangements associated with the hydropower sites. This financial architecture not only ensures project feasibility but also reflects a prudent investment strategy aimed at maximizing shareholder value and sectoral impact.
As the Philippines gears up to meet its expanding renewable energy targets, the role of ancillary services—in particular, battery energy storage—stands at the forefront of this transition. Such systems are seen as indispensable in maintaining grid integrity and resilience in the face of heightened renewable integration and demand fluctuations. Hence, the deployment of these new battery systems by Scatec and Aboitiz Power not only aligns with current market demands but sets a benchmark for future developments within the region.
