|The retired gas-fired Mandalay Generating Station on the shores of the Pacific Ocean in Oxnard, Calif.
Battery peakers are under contract to replace gas generation for Oxnard and across the state.
Source: S&P Global Market Intelligence
Clean Power Alliance, California's largest community choice aggregator, approved an agreement with Luna Storage LLC, an affiliate of Sustainable Power Group LLC, for a new 100-MW battery array in Los Angeles County.
The alliance, which serves roughly 3 million customers in Los Angeles and Ventura counties, recently approved the 15-year contract, which will be signed April 9, according to Clean Power Alliance officials. Sustainable Power Group, or sPower, a subsidiary of power plant operator AES Corp., is under contract to energize the Luna Storage project by July 2021.
Clean Power Alliance's first battery deal is intended to balance its growing portfolio of variable renewable energy resources and help fulfill resource adequacy retirements set by the California Public Utilities Commission. The project will use power from the grid to charge lithium-ion batteries during the day, when California often has an oversupply of renewable power, and release it for four hours in the evening, when electricity demand peaks.
"We need to start building the infrastructure and the assets to accommodate [solar power's] intermittency," Ted Bardacke, executive director of the Clean Power Alliance, said in an interview.
Luna Storage marks the latest large-scale battery project in California in the advanced stages of development or under construction as the state turns to batteries to plug an emerging capacity gap while decarbonizing its power sector.
Battery storage imperative
Clean Power Alliance is negotiating terms for five additional large-scale stand-alone battery projects and seven solar-plus-storage facilities that will add up to 1,117 MW of new storage resources. The proposed projects, which would enter service between 2021 and 2023, would make the alliance one of the most prolific battery storage buyers in the U.S.
The alliance initiated its storage search before state regulators in November ordered California's retail power suppliers, including community choice aggregators, or CCAs, and investor-owned utilities, to procure 3,300 MW of additional capacity. As part of that order, Clean Power Alliance must procure nearly 200 MW, which the agency plans to cover several times over.
"We've always considered state requirements to be the floor, not the ceiling," Bardacke said.
Battery storage could help provide alternatives to gas generation in Clean Power Alliance's service territory, where some gas units are operating beyond their anticipated lifespans. Concerns over a near-term capacity crunch recently prompted state regulators to recommend extending the lives of several Southern California gas plants scheduled to retire at the end of 2020, including Ormond Beach Generating Station units 1 and 2 in Oxnard and Redondo Beach units 5, 6 and 8.
"We see it as imperative ... to pursue alternative non-fossil capacity investments so those communities don't have to be continually burdened with the running of those power plants," Bardacke said.
Other California CCAs procuring large volumes of renewables are also adding new battery contracts.
In a project announced April 8, the California Choice Energy Authority, a coalition of small CCAs in Southern California, is contracting with esVolta for the 15-MW/60-MWh Black Walnut Energy Storage Project in Santa Paula.
Monterey Bay Community Power and Silicon Valley Clean Energy, which are collaborating on battery-backed solar purchases, in January reported "all-time low" prices proposed by developers, with bids in the low $30s/MWh.
The solar-plus-storage contracts that Clean Power Alliance is negotiating are also in that range, according to Natasha Keefer, the agency's director of power planning and procurement.
"We view storage as a critical resource for us, both from a [renewable energy] integration perspective ... and being able to reduce the [greenhouse gas] intensity of our portfolio," Keefer said.