Renewable energy and energy efficiency company Ameresco has nearly completed its three-site, 2.1GWh battery energy storage system (BESS) project for utility Southern California Edison (SCE).
In announcing its most recent quarterly financial results, the company offered an update to what is considered one of the largest utility-led BESS construction contracts seen in the US to date.
System integrator FlexGen has been hired to work on the project including inverter and software integration, although not battery storage supply.
Having said last August that both Ameresco and SCE’s teams were “working round the clock” to get those projects done, by the end of 2022, they were about 95% completed, chief financial officer (CFO) Doran Hole said in an earnings conference call.
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Now undergoing their final steps including grid integration activities, the projects should get to “substantial completion by the summer,” Hole said.
As is well documented, summer is when California’s CAISO grid needs flexibility and balancing resources like battery storage most acutely.
However, the project, which totals 537.5MW power output and 2,150MWh energy storage capacity across three sites in SCE’s service area, had been originally scheduled to come online by the summer of last year.
In fact, the ability to get them online quickly to deal with the summer’s peaks in energy demand on the grid had been one of the key reasons for SCE originating the project and selecting Ameresco in late 2021, but construction had run into some difficulties around its supply chain.
As reported by Energy-Storage.news back in April last year, delays were caused by a confluence of factors cited by Ameresco which included COVID-19 lockdowns in China affecting the supply of BESS equipment. These were compounded by new Chinese laws regarding the safe transport of lithium batteries, as well as weather-related delays.
Ameresco had sought to invoke force majeure on its contracts. The company said yesterday that “discussions regarding the applicability and scope of any force majeure relief” are continuing. It enjoys a “cooperative” relationship with SCE, according to Ameresco.
The company has other energy storage projects underway, including a 42MW/168MWh BESS for a 42MW solar PV plant in Hawaii with developer Bright Canyon Energy, on which it began construction in October last year.
CEO George Sakellaridis had said previously that the SCE contracts, combined with Ameresco’s track record with other projects, made it likely the company would become attractive to other customers seeking large-scale battery solutions.
CFO Hole said in yesterday’s earnings call that BESS project proposals are coming in, both “large and small,” with Ameresco well placed to win “a good number of them” despite it being a competitive market.
These would be a mix of balance sheet projects as well as construction-only contracts like the SCE deal and others it has been awarded by utilities and other types of asset owners.
“…from a sizing perspective, maybe we don’t see any single one that’s quite the size of SoCal Ed, but when you add them all up together, they’re certainly in excess of SoCal Ed when you look at the proposal activity,” Hole said.
Battery storage retrofit at another California peaker plant
In other news from California’s energy storage market, energy supplier MCE is equipping a gas peaker plant with battery storage.
MCE is one of California’s Community Choice Aggregator (CCA) suppliers, set up to allow customers to choose the mix of resources their electricity comes from, while still benefitting from the use of the grid networks of major investor-owned utilities (IOUs) like SCE.
In 2019, MCE entered into a resource adequacy (RA) contract with energy generator Wellhead Power Exchange for 48MW of capacity each month, to be provided by its “traditional” natural gas peaker plant in Fresno.
RA is the mechanism by which California load-serving entities must keep enough resources in reserve to maintain reliability of supply, and to date has led to a rapid increase in the amount of four-hour duration BESS projects – such as SCE-Ameresco’s – on the CAISO grid.
The peaker plant’s operation will be hybridised with the addition of a lithium-ion BESS with 16MW rated power output. MCE claimed that this retrofit will enable as much as a 60% reduction in greenhouse gas emissions (GHG) from the plant, as well as a 78% improvement in local air quality.
Incidentally, Ameresco’s SCE project integrator FlexGen was recently awarded a similar project in California, by independent power producer (IPP) Middle River Power, involving 420MW/420MWh of BESS retrofits at existing peakers.
FlexGen COO Yann Brandt explained to Energy-Storage.news that this form of hybridisation allows peaker plant operators to run the thermal plant portion of their asset much less frequently. For short durations, batteries with durations much shorter than four hours, charged up during times of abundant solar PV generation on the grid, can fill in the gaps.
This not only has a decarbonisation benefit but also enhances the site economics of the peaker plant itself too, Brandt said.
Energy-Storage.news’ publisher Solar Media will host the 5th Energy Storage Summit USA, 28-29 March 2023 in Austin, Texas. Featuring a packed programme of panels, presentations and fireside chats from industry leaders focusing on accelerating the market for energy storage across the country. For more information, go to the website.
