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California utility makes ‘monumental decision’ to procure 261MW of storage

US utility company Southern California Edison (SCE) has announced that it will procure 261MW of grid-connected storage capacity from a handful of suppliers, after a competitive solicitation process.

SCE is on a long-term power capacity procurement drive due in part to the need to replace a retired nuclear power station, San Onofre Nuclear Generating Station, as well as a number of natural gas plants. Within this it had set an objective to procure a minimum of 50MW of storage capacity, but has instead opted for a much higher 261MW.

The storage capacity will be split across five companies - AES Energy storage, which will install 100MW, STEM which will be responsible for 85MW, Advanced Microgrid Solutions (50MW), Ice Energy Holdings (25MW) and NRG Energy, which will supply 0.5MW of storage.

Janice Lin, executive director of the California Energy Storage Alliance (CESA), called it a “monumental decision” and said the fact that SCE procured far more storage than the minimum 50MW it was ordered to meant storage “can be competitive with other preferred resources on both performance and value”.

“This is a monumental decision – arrived at after a team of SCE experts studied more than 1,800 offers for various storage solutions, as well as other preferred resources and traditional generation. The fact that SCE far exceeded the minimum amount of energy storage they were ordered to purchase after comparing multiple solutions head to head, demonstrates that energy storage can be competitive with other preferred resources on both performance and value, and that it’s now an integral part of the utility planning tool kit in California.”

Start-up Stem Energy was awarded 85MW by SCE. Image: Stem.
AES Energy Storage’s 100MW will effectively mean the equivalent to adding 200MW of flexible resources, that can add a total of 400MWh of energy, the company said. AES’ contribution will be the only “in-front-of–the-meter” procurement, with all the other selected companies providing theirs behind-the-meter. Energy will be sold to the utility through a power purchase agreement (PPA) spanning 20 years. The project should be installed by 2021.

AES called the system, AES Advancion, a “complete battery-based alternative to a peaking power plant”. A recent study highlighted the potential viability of flow batteries made by one company, ViZn Energy, as a competitive alternative to gas turbines as peaker plants. Incidentally, AES Energy Storage’s parent company, AES Corporation, will also provide SCE with 1,284MW of combined cycle gas-fired generation.

The biggest of the behind-the-meter storage procurements, from Stem, will see storage installed at customer-sited distributed generation facilities in the Western Los Angeles Basin. The dispatchable energy capacity is intended to “enhance the local reliability of the region,” according to Stem. An energy services start-up, Stem specialises in software-driven management of energy storage systems. It recently announced a deal to pair its product with solar panels by Kyocera in three US states including California.

The storage capacity procured by SCE is separate to AB2514, the 1.325GW energy storage procurement target set by the California Public Utilities’ Commission (CPUC) for the state’s three main investor owned utilities. AB2514 was set up with the specific aim of using storage to help the state meet its renewable energy and environment targets, with the full amount to be installed by 2020.

The news follows the recent announcement that the US Department of Energy (DoE) has awarded US$15 million in funding to projects that aid the integration of solar into the grid.

Some of the procurement will go towards improving the reliability of local electricity supply and infrastructure. Image: SCE facebook page.

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