The Energy Storage Report 2024

Now available to download, covering deployments, technology, policy and finance in the energy storage market

California: esVolta and Atlantica secure tax equity, PPAs for large-scale BESS


Developer esVolta has secured tax equity financing for a 30MW/60MWh BESS in California while Atlantica Sustainable Infrastructure has signed PPAs for two projects with one of the state’s utilities.

EsVolta has closed the tax equity investment with U.S. Bancorp Impact Finance to finance its Santa Paula Energy Storage project, currently being built some 60 miles northwest of Los Angeles and entering commercial operation before the end of the year.

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The project will take advantage of long-term contracts with “a major energy commodity firm” and several California electric community choice aggregators (CCAs), the announcement said.

The announcement also claimed the deal made esVolta and Impact Finance among the first partners to structure tax equity for standalone storage, made possible by the Inflation Reduction Act. For large-scale standalone projects it is the seventh that has reported on, following announcements from Aypa PowerSpearmint EnergyPlus PowerSMT Energy and SUSIStrata Clean Energy and Eolian.

It is the first tax equity transaction for esVolta, which only develops battery storage projects, and was acquired by Generate Capital last year.

Most large-scale BESS in California are four-hour systems in order to get the maximum payment under resource adequacy (RA), grid operator CAISO’s framework to ensure there is capacity to meet demand without centralised capacity market auctions. A two-hour BESS could bid in part of its capacity to meet the four-hour requirement.

Atlantica Sustainable Infrastructure secures PPAs for two BESS totalling 180MWh

In related news, Atlantica Sustainable Infrastructure has entered into two power purchase agreements (PPAs) with “an investment grade utility” for its Coso Batteries 1 and Coso Batteries 2 projects, both co-located with a geothermal plant in California.

The PPAs run for 15 years and will see the assets receive fixed monthly payments adjusted by the financial settlement of CAISO’s day-ahead market.

Coso Batteries 2 is a 20MW/80MWh project in advanced development expected to come online in 2025, while Coso Batteries 1 is a 25/MW100MWh system coming online in 2024. The two projects require investment of US$35-45 million and US$40-50 million respectively.

California is the largest energy storage market in the US with significant renewables penetration, plentiful land and long-term bankable PPAs helping the market take off, with nearly 7GW of BESS online across grid-scale, commercial and residential systems today.

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