California energy regulators approved four Pacific Gas and Electric Co. contracts with developers of lithium-ion battery systems totaling 567.5 MW, two of which are larger than any battery project in operation worldwide.
Two weeks after delaying a previously planned vote, the California Public Utilities Commission on Nov. 8 approved a 20-year resource-adequacy agreement with a Vistra Energy Corp. subsidiary for a 300-MW project, a supply deal with Tesla Inc. for a 182.5-MW utility-owned project, and a 15-year third-party contract with a subsidiary of esVolta for a 75-MW installation. In addition, regulators approved a 10-year resource-adequacy contract with Micronoc Inc. for 10 MW of behind-the-meter batteries.
The PG&E Corp. utility proposed the contracts in response to the regulator's January order for it to seek alternatives to pricey reliability must-run agreements with three Calpine Corp. natural gas-fired power plants in northern California. Although the California ISO approved transmission upgrades that eliminated the need for additional resources in the affected area between Silicon Valley and Monterey Bay, regulators said the contracts are necessary to address "ongoing and future local reliability concerns" associated with future gas plant retirements.
The decision approved full cost recovery in rates for the contracts, with project completion dates in 2019 and 2020. While the commission kept the cost of the projects confidential, it said they are "reasonable in comparison to prior storage solicitations." Each of the projects includes four hours of storage capacity. Regulators also required PG&E to file annual reports estimating the impacts of the projects on greenhouse gas emissions once they become operational.
In addition to helping PG&E meet its share of a statewide target for utilities to purchase 1,325 MW of storage by the end of 2021, the projects set a new standard for large-scale batteries. The world's largest currently operating battery project is Tesla's 100-MW system in Australia.
