PHILIPPINE President Ferdinand R. Marcos, Jr. on Monday said the StB GigaFactory, Inc.’s newly built battery manufacturing plant will pave the way for more investors in the renewable energy (RE) industry as the country tries to boost its share in the energy mix.

The facility could generate P5 billion in revenues for the government and 2,500 jobs when it hits full capacity in 2030, the President said at the inauguration of StB Gigafactory’s manufacturing plant for iron phosphate batteries in the Clark Special Economic Zone in Capas in Tarlac.

“The StB GigaFactory sets the stage for the Philippines to become a player in clean energy storage in our part of the world, in Southeast Asia, in our region,” Mr. Marcos said in his speech at the event, which was sent to reporters via e-mail.

“Your products could help entice more investors in renewable energy facilities in the country, the upstream and the downstream businesses that will come from this are just going to be tremendous.”

The Department of Energy last week said it has issued endorsements to eight RE projects and one battery energy storage system.

The Philippines aims to raise the share of RE in the energy mix to 25% by 2030 and to 50% by 2040 from the current 22%.

Mr. Marcos said the battery manufacturing plant is expected to produce two gigawatt-hours worth of batteries yearly, powering about 18,000 electric vehicles and nearly half a million home battery systems.

StB GigaFactory produces batteries for energy storage backup for solar photovoltaic for residential, commercial, and industrial use.

The company is the first locator in Filinvest Land, Inc.’s Filinvest Innovation Park in New Clark City in Capas, Tarlac. It hopes to export 70% of its output to Australia and Southeast Asia, with some of its output to be distributed within the Philippines.

The construction of the manufacturing plant was among the deals bagged during the ASEAN-Australia Special Summit in March, where Mr. Marcos secured about P86 billion worth of business deals.

The Maharlika Investment Fund is eyeing opportunities to invest in the renewable energy sector particularly in off-grid power and infrastructure, Maharlika Investment Corp. (MIC) Chief Executive Officer Rafael D. Consing, Jr. earlier said.

He has said the MIC plans to raise about $1 billion for energy projects on grid modernization, electricity distribution and new sources to “diversify supply and create price stability.”

Energy Undersecretary Sharon S. Garin has said battery technology is evolving fast enough for the Philippines to meet its RE targets. She said the agency was looking to attract more battery system companies to introduce these advanced systems for local energy projects.

“This facility runs in tandem with the Philippines’ renewable energy landscape, as we transition our country to renewable energy,” the President said.

“This certainly aligns with our plans to develop the country’s electric vehicle industry and produce locally made EVs and EV components, reducing our reliance on imported fuels.” — John Victor D. Ordoñez

By John Victor D. Ordoñez, Reporter

THE PHILIPPINE Petroleum Association (PPA) of the upstream oil and gas industry is pushing for the passage of a Senate bill that seeks to promote the production of indigenous natural gas and liquefied natural gas as the country explores new energy reserves ahead of the expected depletion of the Malampaya gas field.

PPA President Edgar Benedict C. Cutiongco said the industry supports Senate Bill No. 2793, “Philippine Natural Gas Industry Development Act,” as the measure prioritizes local natural gas sources over imported fuel.

“This aligns perfectly with our mandate to explore and produce indigenous natural gas,” he told BusinessWorld in a text message on Monday.

Under the Senate measure, the government is tasked to “hasten the exploration and development of indigenous natural gas and facilities and prioritize the use of indigenous natural gas over imported natural gas to help attain greater energy security.”

The measure is currently under plenary deliberation, while its counterpart measure, House Bill No. 8456 has been approved on third and final reading in August 2023.

Manila is under pressure to find new energy reserves as its only indigenous source, the Malampaya gas field, is set to run out of recoverable gas using current techniques by 2027. The field supplies at least a fifth of the country’s power requirements.

In May last year, President Ferdinand R. Marcos, Jr. extended the Malampaya Service Contract 38 to Feb. 22, 2039, giving operators a 15-year window to further exploit the field beyond the initial Feb. 22, 2024 expiration date.

The government is trying to boost renewable energy’s (RE) share in the country’s energy mix to 35% the 22% these account for. The country is also aiming for a 50% share of RE in the energy mix by 2040.

‘PROBLEMATIC’ PROVISIONS
In a statement on Sunday, Senate Ways and Means Committee Chairman Sherwin T. Gatchalian said consumers may be forced to pay higher prices of electricity under indigenous natural gas plants since power generated from these are generally more expensive.

“This is problematic because consumers will be forced to pay the higher price of electricity whenever ING (indigenous natural gas) is more expensive,” he said, citing the provision in the bill giving priority to ING over imported natural gas.

Section 21 of the bill provided that the procurement and utilization of indigenous natural gas will be prioritized over imported natural gas.   

“We need to ensure that every provision in this bill provides consumers with protection and would strengthen the whole energy sector and boost our economy.”

Mr. Gatchalian also referred to Section 6 of the proposed measure, which allows for the “full recovery of reasonable costs” incurred by power generators. He noted this is a “more lenient standard” compared to the “least cost” requirement outlined in the Electric Power Industry Reform Act.

To address this, the senator said the proposed measure should ensure that the Energy Regulatory Commission can protect consumers through the “least cost” standard when reviewing power supply agreements.