ACEN expands solar pipeline, eyes storage growth

From AB Capital's The Opening Bell: Three Moves

Event

ACEN will invest P1.15 billion into subsidiary Giga Ace 8 to support the development of its Palauig solar project in Zambales. The project is currently sized at 300MWp with an estimated cost of P16 billion, although the company has also sought approval to expand capacity to 420MWp and add battery storage, which could raise total investment to P26 billion.

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The announcement highlights ACEN's push beyond pure capacity additions toward integrated solar-plus-storage projects. If approved, the battery component could allow the project to capture more value from evening peak demand while helping address intermittency and grid stability challenges. That said, investors are likely to remain focused on execution and the pace at which the company's growing project pipeline translates into meaningful earnings and cash flow.

Catalyst

Key watchpoints include approval of the proposed expansion, updates on construction and the timeline for commercial operations. We would also look for signs that newly commissioned projects begin contributing meaningfully enough to offset rising financing and depreciation expenses.

Action

ACEN is likely to continue to attract interest as a renewable energy proxy, particularly as power prices remain firm. However, we think a sustained re-rating will still require stronger earnings delivery as the company's large project pipeline comes online.

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