Meralco explores battery venture with Tesla
Power utility firm Manila Electric Company (Meralco) is setting in motion discussions with American electric car giant Tesla Motors for prospective tie-up venture on batteries.
“It’s a potential business partnership on small storage, that’s what we’re pushing hard now,” Meralco Senior Vice President Alfredo S. Panlilio told reporters when pressed on the business deal that the company has been exploring with the US carmaker. It is worth noting that Tesla remarkably gained market foothold on its diversification to battery production recently.
“We just had teleconference last week, we just agreed that they (Tesla executives) come over and have a visit,” he stressed. The proposed visit is eyed either this September or within the next quarter.
The focus of the business discussion, he said, is not even firm yet at this point and it will likely be more of a free-flowing exchange on the future of batteries that the parties would be delving on.
“Normally, we come up with an agenda, but we don’t even have that yet. These are options,” Panlilio stressed.
He expounded that their intent will be to assure the level of Meralco’s preparedness on the portended commercial scale penetration of electric vehicles (EVs) in the country; and also to integrate into its business plan the batteries that could underpin solar power developments.
“We just have to be ahead of adoption, for example, if EV rollout finally comes on mass scale, Meralco should be ready – even with the charging stations. We’ve been espousing about it for two years already, but it depends on the government also on what are the policies for EVs and how can you massively have more e-jeepneys (electric jeepneys)…there are still a lot of things that must be done,” Panlilio said.
Tesla, for its part, had gained meteoric success with electric cars and even more with the production and rollout of its ‘Powerwall’ home batteries that charges with the use of generated electricity from solar panels.
The Tesla battery is touted as ‘automated, compact and simple to install,’ and could shield consumers from the torment of power outages because the “Powerwall” battery could be operated independent from the grid and it also comes with emergency back-up system.
Meralco is setting its goal on commercially affordable deployment of solar panels at Filipino homes, and there is that aspiration to marry it with battery storage so it becomes a reliable power supply source for the end-user.
Panlilio indicated though that there are still challenges on the policyframing and regulatory fronts before any blueprinted business model of such type could be successfully lifted off from drawing boards.
The Philippines is not alone on that dilemma though. Whether in developed power markets or in their emerging counterparts, a viable regulatory framework for innovative battery energy storage has remained a puzzle or a ‘work-in-progress’ to the industry.
Even United States Federal Energy Regulatory Commission (FERC) Chairman Norman C. Bay has just stipulated early this year that they are still scouring for the right approach when it comes to the regulatory framework for energy storage.
What he had promised though is for the American regulators to retool existing market rules and regulatory regime so it will ‘level the playing field’ for all players in the sector.
He added the much-anticipated fall in the cost of battery storage is the newest parameter that regulators must factor in into the rule crafting when it comes to incentivizing this form of innovation in the energy landscape.
“To the point where energy storage systems will be more cost-competitive than traditional peakers (peaking plants), from a regulatory perspective, we can’t pick winners and losers. But we can make sure that there is a level playing field for all of these sources and that there are no undue barriers to entry,” he said.
The American chief regulator has reiterated market projections that the cost of energy storage will trail downtrend, “but the question is: how quickly those prices are going to drop? There are some analysts who think that the cost reduction will be substantial – more than 50% over the next five years.”