ABOITIZ Power Corp.’s joint venture with Norwegian firm Scatec will start this month the construction of a 20-megawatt (MW) battery energy storage system (BESS) located at the Magat hydroelectric power plant in Ramon, Isabela province, the listed energy company said on Tuesday.

In a disclosure, AboitizPower said the joint venture, SN Aboitiz Power (SNAP) Group, signed on March 25 the engineering, procurement and construction (EPC) agreement with Hitachi Energy for the development of the Magat BESS project.

“We are excited about technologies like BESS that complement our ambition of bringing forth an RE (renewable energy)-powered future, and continue to explore and assess other greenfield and brownfield opportunities beyond hydropower and floating solar. We also appreciate the support of our banking partners for project financing,” SNAP Group President and Chief Executive Officer Joseph S. Yu said.

The joint venture tapped Bank of the Philippine Islands and China Banking Corp. to provide financing for the project.

Early-phase activities for the Magat BESS project were completed in 2021 as part of the pre-construction stage, which included site surveys and basic engineering design, AboitizPower said.

Magat BESS, which is expandable to 24-MW, is planned to be used primarily for ancillary services or reserve power.

The project marks the first venture between renewable energy providers AboitizPower and Scatec after the latter acquired hydropower developer SN Power. It is targeted for commercial operation in the first quarter of 2024.

Scatec General Manager for Southeast Asia Torbjørn Elliot Kirkeby-Garstad said that building the BESS facility is the first step in the company’s ambition to work on more initiatives in the Philippines.

“The Philippines is an important market for Scatec, and we see several promising opportunities, especially in renewables,” he added.

AboitizPower said in line with the BESS project, grid operator National Grid Corporation of the Philippines is set to upgrade the 230-kilovolt Magat-Santiago transmission line.

“The upgrade will allow SNAP to continue adding capacities within the Magat area for additional projects,” it said.

On Tuesday, shares in AboitizPower rose by a centavo 2.78% to close at P37 apiece. — Ram Christian S. Agustin