Renewable energy developer-operator Arevon has entered into a long-term offtake agreement for a 250MW/1,000MWh battery energy storage system (BESS) in California with community choice aggregator (CCA) MCE.
The tolling agreement for the Cormorant Energy Storage Project in Daly City will see Arevon build and operate the BESS for the needs of MCE, a non-profit utility with 1.5 million customers across Contra Costa, Marin, Napa, and Solano counties.
A first phase of 188MW will begin construction in Q1 2025 and will become operational in 2026. Arevon didn’t reveal when the second phase of the project would come online.
Such long-term tolling agreements and power purchase agreements (PPAs) in California have helped make it the leading US state for BESS deployments, with 7.6GW online as of the end of March 2024, according to transmission system operator (TSO) CAISO. Such long-term agreements help project owners acquire financing from financial institutions that can be typically risk-averse, such as banks.
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For example, Arevon recently secured a US$1.1 billion debt and tax equity package for a solar-plus-storage project, also in California, which has a long-term PPA agreement with a for-profit utility Southern California Edison (SCE). In November, the firm claimed to have completed “one of the first” investment tax credit (ITC) deals using new a transferability mechanism under the Inflation Reduction Act.
“Battery storage is critical to fast-tracking the clean energy transition. Through our partnership with Arevon, we are bringing online our largest battery storage project yet to support clean, reliable, and affordable electricity service for the Bay Area residents and businesses we serve,” Dawn Weisz, MCE CEO said.
