Wärtsilä, Clearway announce 5-project, 2-GWh energy storage deal

Energy storage technology specialist Wärtsilä Oyj Abp is supplying five large-scale battery systems to developer Clearway Energy Group LLC for solar-plus-storage projects in California and Hawaii, the companies said July 11.

Totaling 500 MW/2,000 MWh of lithium-ion energy storage, the package, touted as "one of the world's largest solar-plus-storage project portfolios," will help shore-up grid reliability as both states seek to balance rising volumes of variable renewable energy generation and fossil fuel plant retirements.

The facilities include Clearway's Mililani I Solar Project and Waiawa Solar & Battery Storage Project, both under long-term contracts with Hawaiian Electric Co. Inc. on the island of Oahu, where the Hawaiian Electric Industries Inc. subsidiary has been struggling this year with widespread energy storage project delays.

The Mililani I facility, with 39 MW of solar and 156 MWh of energy storage capacity, is already operational. The 36-MW Waiawa Solar project, with 144 MWh of energy storage, is anticipated to be online later this year.

In California, where disruptions to the solar and energy storage supply chain are contributing to grid reliability concerns, Wärtsilä is contracted to deliver systems for one of the largest battery-backed photovoltaic projects in the state at Clearway's Daggett complex in San Bernardino County. That includes 131 MW of four-hour energy storage at the Daggett 2 Solar & Battery Storage Project and 144 MW of four-hour batteries at the Daggett 3 Solar and Battery Project.

Construction is underway at the contiguous site, where projects underpinned by contracts with five off-takers are scheduled for completion in 2023.

The single largest project in the portfolio is a 147-MW/588-MWh energy storage system to be added to Clearway's existing 192-MW Rosamond Central solar farm in Kern County, Calif., by December 2023. The facility supplies multiple customers.

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Still bullish on batteries

In securing the contracts with Clearway, Wärtsilä has had to navigate an unprecedented "supply-demand shock" to the energy storage industry, driven by surging prices for lithium-ion battery metals over the past year amid strong demand for electric vehicles and insufficient feedstocks to support both industries, according to Andy Tang, a vice president at the company's energy storage business.

"The bright news is, there are many mines that are being developed that will hopefully start to come online in the 2023-2024 time frame," Tang said in an interview. "We do expect a return to normalcy" in lithium carbonate feedstock prices by the second half of 2023.

In May, monthly Asian lithium carbonate prices fell slightly, for the first time in 18 months, to $50,500 per tonne, according to a recent S&P Global Commodity Insights report. That is up from $9,083 per tonne in the first quarter of 2021.

Such extraordinary price jumps have sparked a wave of battery storage contract renegotiation in the U.S.

Despite pricing challenges for energy storage, Tang remains "incredibly bullish" on the industry's prospects, pointing to Wärtsilä's "robust pipeline of future potential deals" and highly volatile wholesale power prices that continue to create lucrative arbitrage opportunities for battery storage, even at today's higher prices.

"We are actually finding a lot of customers that have adjusted to the new reality," Tang said.

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