MANILA, Philippines — October 19, 2026 — The Philippine Solar and Storage Energy Alliance (PSSEA) is calling for the immediate resumption of commercial dispatch and settlement in the reserve market for the Luzon, Visayas, and Mindanao grids, alongside targeted interventions in the Visayas that accelerate the procurement and deployment of battery energy storage systems (BESS).
In its position paper to the Energy Regulatory Commission’s (ERC), the Alliance stressed that suspension of the reserve market under ERC Case No. 2023-002 RC, though intended to protect the customers, actually further distorts the market and does not resolve the underlying supply constraints.
The position paper emphasized the urgent need for targeted procurement, done through competitive forward contracting of battery storage system that can be deployed fast.
According to Tetchi Capellan, Chair of PSSEA, “The solution to high electricity costs affecting Visayas is to address the underlying supply and flexibility constraints in the region.”
Capellan added, “Battery energy storage is immediately deployable and can help provide the fast response to outages. Its grid forming capability has the flexibility needed by the grid, while supporting the integration of more renewable energy.”
In short, Capellan argued, “the industry believes that the solution is not suspension of the market but creating a mechanism enabling the quick deployment of investments on the solutions that deliver value to the grid and to the Visayas consumers.”
The Visayas grid faces a combination of generating-unit outages, constrained electricity transfers from Mindanao grid, and reserve procurement challenges.
In August 2026, IEMOP reported that the Visayas’ average supply margin, after accounting for reserve requirements and interregional transfers, fell to 62 MW, alongside 86 hours of Yellow Alert and 53 hours of Red Alert. These conditions underscore the need for additional capacity that can be delivered where the grid needs it.
IEMOP’s July 2026 market report also found that contingency-reserve prices declined by 24.8% as offered quantities and contracted quantities increased and scheduling adequacy improved.
For PSSEA, this reinforces the importance of securing sufficient reserve supply through effective procurement, including qualified BESS resources.
PSSEA also calls for a targeted response to the elevated costs in the Visayas. ERC-reported figures indicate that reserve-market purchases contributed ₱1.29 per kilowatt-hour to Visayas electricity rates in 2025, compared with ₱0.02 per kilowatt-hour from Ancillary Services Procurement Agreements (ASPAs).
Capellan stressed that the price spike is alarming as it jumped approximately 64 times the reported rate contribution.
To address these challenges, PSSEA recommends that the ERC directs the National Grid Corporation of the Philippines (NGCP) to pursue forward contracting of ASPAs with BESS assuming a primary role in the procurement.
The Alliance also supports the deployment of two- and four-hour BESS systems that can provide ancillary services and shift energy solutions to periods of greater demand, helping make better use of renewable generation that might otherwise be curtailed.
“Battery storage should be part of the solution to the Visayas’ power challenges. By combining competitive procurement with forward contracting and appropriately located storage, we can strengthen reserve availability, make better use of renewable energy, and improve the conditions for investment in a more reliable power system,” said Ping Mendoza, president of the Alliance.
PSSEA emphasized that market reforms and new investments must work together. A competitive and transparent reserve market can provide clearer signals for investment, while appropriately procured BESS can contribute the flexibility needed to support grid stability and renewable energy integration.
The Alliance remains committed to working with the ERC, NGCP, and other stakeholders to advance practical solutions that protect consumers and support the Philippines’ energy security, affordability, and sustainability.
About PSSEA
The Philippine Solar and Storage Energy Alliance (PSSEA) is a non-profit industry association dedicated to advancing solar energy and energy storage in the Philippines. Established in 2010, PSSEA brings together stakeholders across the solar and storage value chain to promote evidence-based policies, industry collaboration, and the deployment of clean energy solutions that contribute to a more secure, affordable, and sustainable energy future.
Media inquiries:
Philippine Solar and Storage Energy Alliance (PSSEA)
corpcomm.phsolar@pssea.org
https://pssea.ph/
