Shell's Unit Signs EPC and O&M Contracts for Bataan Battery Project

Shell Plc's SHEL power marketing and trading business subsidiary, Shell Energy Philippines, Inc. (“SEPH”), has signed the engineering, procurement and construction (“EPC”) and operation and maintenance (O&M) contracts for its 30-MW/60-MWh Hermosa battery energy storage project in the Philippines.

The project, which will be developed in Bataan on Luzon Island, represents an important step in SEPH's plans to expand its energy infrastructure portfolio with large-scale battery storage. Once operational, the facility will store electricity when supply is available and release it to the grid when demand is higher.

Power Dimension Inc has been selected as the EPC contractor and will oversee the installation of the battery energy storage system, electrical infrastructure, balance-of-plant facilities and commissioning. Meanwhile, Sungrow Power Technology Solutions Philippines Inc will manage the site's operations under a separate long-term service agreement and O&M contracts.

Power Dimension to Lead Hermosa BESS Construction

The EPC agreement places Power Dimension at the center of the project's construction and delivery phase. Its responsibilities will cover the physical installation of the storage system together with the electrical and supporting infrastructure required for the facility to operate.

The work will also include commissioning, which will prepare the completed installation for operation. This stage is essential because the battery units, electrical systems and other components must operate as an integrated facility before the project can begin providing its intended service to the grid.

For Shell Unit, awarding the EPC contract establishes a clear path toward construction and brings the Hermosa development closer to becoming an operating energy storage asset.

Sungrow Technology Selected for the Bataan Project

The facility will use Sungrow's Power Titan 3.0-based battery technology, providing the core storage equipment for the project.

Sungrow will also continue to support the project after construction through separate long-term service agreements and O&M contracts. Its responsibilities will cover operations and maintenance, providing technical support once the facility enters service.

Long-term maintenance is an important part of utility-scale battery projects because the equipment must remain available and properly managed throughout its operating period. Regular monitoring and maintenance can help support reliable performance and ensure that the facility is ready to store or discharge electricity when required.

30 MW of Power and 60 MWh of Storage

The Hermosa project will have a 30-MW power capacity and 60-MWh energy storage capacity. At its full rated output, the system is designed around approximately two hours of discharge capability.

This configuration allows the facility to perform an important energy-shifting function. When electricity is available, the batteries can absorb and store power. The stored energy can be released back into the electricity network when demand increases.

The ability to shift electricity between different periods is one of the key functions of grid-scale storage. It gives the power system an additional resource that can respond to changing conditions without requiring electricity to be generated at the same moment it is consumed.

For the Philippine electricity market, this flexibility can become increasingly valuable as demand patterns and generation availability change throughout the day.

Bataan Project to Support Grid Flexibility

The Hermosa facility is intended to contribute to power system flexibility and reliability. Its storage capability will allow electricity to be retained during periods of availability and dispatched during periods when the system requires additional power.

Battery storage can complement other electricity infrastructure by providing a controllable source of energy. Rather than operating as a conventional power plant that continuously generates electricity, the facility will store electrical energy and make it available when needed.

The project's location in Bataan, within the Luzon power system, adds significance to its planned role. Luzon is a major electricity market in the Philippines, and additional flexible infrastructure can provide another option for managing changes in power requirements.

Hermosa Becomes Part of Shell's Energy Infrastructure Portfolio

The new facility will form part of SEPH's energy infrastructure portfolio, adding utility-scale storage capability to its activities in the country.

The development demonstrates the growing importance of battery technology in modern electricity infrastructure. Energy storage can help bridge the timing gap between electricity availability and demand, allowing excess power to be retained and used later.

For the Hermosa project, this function is reflected directly in its operating design. The system will charge when electricity is available and discharge when demand is higher, helping provide greater flexibility to the network.

The project therefore has a role beyond simply adding battery capacity. It is intended to become an operational asset capable of responding to changing electricity requirements while supporting the reliability of the wider power system.

Key Milestone for the Hermosa Battery Project

The award of the EPC and O&M contracts marks a significant milestone for the 30-MW/60-MWh Hermosa BESS.

Power Dimension will take responsibility for construction, installation and commissioning, while Sungrow will provide the selected battery technology and long-term operational support. Together, these agreements establish the framework needed to move the project toward completion and eventual operation.

Shell Energy Philippines’ president and CEO Bernd Krukenberg has emphasized the role battery storage can play in supporting power system flexibility and reliability. The newly signed agreements provide the foundation for bringing the facility into operation safely and efficiently.

Once completed, the Bataan installation will add a substantial new energy storage resource to the Luzon grid. The ability to store electricity and return it during periods of higher demand will provide another flexible tool for managing the country's evolving electricity requirements.

With construction and long-term operational responsibilities now assigned, the Hermosa battery project has moved an important step closer to becoming an operational part of the Philippines' energy infrastructure.

SHEL's Zacks Rank & Key Picks

Currently, SHEL has a Zacks Rank #3 (Hold).

Investors interested in the energy sector might consider some better-ranked stocks, such as Par Pacific PARR and Delek US Holdings DK, both sporting a Zacks Rank #1 (Strong Buy), and Oceaneering International OII, carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Par Pacific is valued at $4.02 billion. It is a diversified energy company that owns and operates petroleum refineries, logistics assets and retail fuel businesses across the United States. Par Pacific focuses on refining, transporting and marketing fuel products while serving regional markets with reliable energy solutions.

Delek US Holdings is valued at $4.01 billion. It is a diversified downstream energy company engaged in petroleum refining, renewable fuels, asphalt production and logistics operations. Delek US Holdings operates multiple refineries in the United States and is committed to delivering safe, reliable energy while investing in cleaner energy initiatives.

Oceaneering International is valued at $5.20 billion. It is a global technology and engineering company. Oceaneering International provides subsea robotics, offshore services, engineered products and advanced solutions to the energy, defense, aerospace and other industries.

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