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California OKs SDG&E energy storage contracts to help replace nuclear plant

California utility regulators approved 83.5 MW of energy storage for San Diego Gas & Electric Co. and authorized $235 million mostly to recover the costs of those battery projects. The new capacity is intended to help replace output from the San Onofre Nuclear Generating Station, which shut down in 2013.

The Public Utilities Commission, or PUC, on May 31 approved the Sempra Energy subsidiary's application for full cost recovery of two utility-owned energy storage resources totaling 70 MW, three third-party storage resources totaling 13.5 MW and a 4.5-MW demand response contract with OhmConnect Inc. SDG&E selected the total 88 MW of local capacity resources from responses to its 2016 request for offers.

The closure of San Onofre left San Diego Gas and Electric, or SDG&E, with a need to procure replacement resources, and in 2014 the PUC authorized SDG&E to acquire 500 MW to 800 MW of capacity by the end of 2021, including 175 MW of clean energy resources such as energy storage and demand response.

RES Americas Inc. will construct its 30-MW Miramar Energy Facility battery system with an expected online date of Dec. 31, 2019, while AES Corp.'s 40-MW Fallbrook Battery Energy Storage System is expected online by March 31, 2021. SDG&E will acquire 30 MW of capacity in the Miramar system along with the entire Fallbrook system. SDG&E asserted in its cost-recovery application that it evaluated the economics of all resource bids without regard to the project ownership.

Both lithium ion battery systems will have a discharge duration of four hours to provide transmission support services, according to the PUC's decision approving the projects.

The third-party storage contracts are with Enel Green Power North America, a subsidiary of Italy's Enel SpA, for 3 MW of capacity over 15 years, Advanced Microgrid Solutions for 4 MW over 20 years and Powin Energy Corp. for 6.5 MW for 10 years. The lithium ion batteries are due to be in service between late 2019 and the end of 2021.