Power firm says storage costs slow clean energy shift

By Rjay Zuriaga Castor

The high cost and limited availability of large-scale batteries and other energy storage systems remain a major barrier to the Philippines’ shift toward renewable energy, according to a top official of Meralco PowerGen Corp. (MGEN).

MGEN President and Chief Executive Officer Emmanuel Rubio said that while variable renewable sources such as solar and wind continue to expand, they are still not cost-competitive for 24/7 baseload supply without storage support.

“The problem right now is that the variable renewable energy and energy storage are not yet competitive to supply 24 hours,” he said.

“It is possible, but a lot of batteries and batteries are still expensive today,” he added.

“Hopefully in the future, with the improvement of technology and capacity, we can achieve that,” he said.

Rubio said MGEN, the power generation of Meralco under the Manuel V. Pangilinan group, is developing the Terra Solar project, which is expected to be the world’s largest integrated solar and battery storage facility when fully operational by 2027.

The facility will deliver 3,500 megawatts of solar power to the Luzon grid, along with 4,500 megawatt-hours of battery energy storage.

It will cover 3,500 hectares across Nueva Ecija and Bulacan and is projected to supply enough clean energy for more than 2 million households, reducing carbon emissions.

“One thing that this project is proving is that finally a combination of variable renewable energy, which is in this case solar, and an energy storage system, and in this case a lithium-ion battery, can now be as competitive as traditional sources of big mega supply,” Rubio emphasized.

He noted that the solar plant will be able to supply electricity from 8 a.m. to 9 p.m., while stored energy from batteries will continue to deliver power after sunset.

He also said MGEN is actively investing in liquefied natural gas.

In 2025, MGEN acquired a 40.2% stake in an integrated LNG facility in Batangas as part of its portfolio diversification and transition strategy to a low-carbon future.

Rubio said it would be “game over” for thermal energy if the combination of variable renewable energy and some form of energy storage can be as competitive as any source of baseload.

The Department of Energy targets renewables to supply 35% of the country’s power generation mix by 2030 and 50% by 2040, goals that Rubio said MGEN is working toward.

Rubio said the challenge with achieving this target is the variable nature of renewable sources like solar and wind.

“When the sun is shining, solar facilities generate electricity at a certain level, but if clouds pass over, the output dips,” he explained.

“This variability means that solar and wind power production is not steady all day long,” he added.

Rubio said the 2040 target for renewables must also include solutions to manage and address the variability of these power sources.

He said this could involve investments in energy storage systems like batteries, complementary power plants, and advanced grid management technologies to ensure a stable and reliable supply of electricity despite fluctuations in renewable generation.

MGEN data showed that natural gas will make up 43% (4,447 megawatts) of its total energy mix by 2030, followed by renewables at 33% (3,379.2 megawatts) and thermal sources at 24% (2,519.8 megawatts).

Currently, coal accounts for 26% of MGEN’s generation portfolio, which will slightly decline to 24% by 2030–2035.

“It won’t drop too much because our demand is increasing,” Rubio said.

“It is not that substantial,” he added, citing that the reduction will be gradual as demand continues to rise.

MGen owns Panay Energy Development Corporation (PEDC), a coal-fired power plant in LaPaz, Iloilo City operated by its subsidiary MGEN Thermal.