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Southern California Edison signs 7 big battery deals for grid reliability

Citing the need to avoid reliability issues on California's grid as the state transitions toward significantly higher levels of variable solar and wind power, Southern California Edison Co. has signed seven long-term contracts for 770 MW of battery storage resources, most of which would charge on adjacent solar farms.

"These projects will be located at the same point of interconnection and will be the first of their kind on California's grid," the Edison International utility subsidiary said in a May 1 announcement.

If approved by the California Public Utilities Commission, the projects would all start commercial operations in August 2021, together adding more battery storage capacity than U.S. developers installed across the entire country in 2019 and adding to California's surging near-term development pipeline.

Southern California Edison, or SCE, said it plans to submit the contracts for consideration later in May.

The procurement includes three 15-year agreements with NextEra Energy Resources LLC, the competitive generation arm of NextEra Energy Inc. The developer, which reported strong demand for energy storage systems in the first quarter, won contracts for three battery projects in Riverside County, including 230 MW at the McCoy project, 115 MW at the Blythe 2 facility and another 115 MW at the Blythe 3 project. SCE already has contracts for solar generation from NextEra's operating McCoy Solar Energy Project and Blythe Solar II (NextEra) system, as well as its Blythe Solar III installation, which is planned to come online later this year, according to S&P Global Market Intelligence data.

Southern Power Co., a power plant development subsidiary of Southern Co., has a 20-year contract for 88 MW of storage from the Garland facility in Kern County, where it is part owner of the RE Garland Solar Project, a 185 MW facility that sells power to SCE. The utility also awarded Southern Power a 20-year agreement for 72 MW of storage at the Tranquility project in Fresno County, where Southern Co. owns a share of the 200-MW RE Tranquillity 1 Solar Generating Facility, in operation since 2016.

Southern California Edison awarded a 15-year deal to LS Power Group for 100 MW of storage from the Gateway 1-2 project in San Diego County, and a 10-year agreement to Terra-Gen LLC for 50 MW at the Sanborn facility in Kern County, where it is also developing the 300-MW Sanborn Solar Project.

The utility selected the contracts through a competitive solicitation launched after California energy regulators and the California ISO in 2019 identified a potential capacity crunch emerging in southern California, resulting from the upcoming retirement of several aging natural gas-fired power plants, the growth in variable renewable energy resources and shifts in peak power usage. The grid operator had identified a potential 4,700 MW capacity shortfall by 2022.

In response, the California Public Utilities Commission recommended delaying the retirement of four aging gas-fired power plants that utilize "once-through" ocean water cooling systems and ordered utilities and other load-serving entities to procure 3,300 MW of new resources, with SCE responsible for the largest share.

"These new emissions-free projects will help us ensure the reliability of the grid for our customers and integrate an ever-increasing amount of clean renewable energy over the next decade," William Walsh, SCE's vice president of energy procurement and management, said in a statement.