California utility SCE’s latest battery storage contracts to take company beyond 2GW mark

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A hybrid project combining lithium batteries with natural gas turbines in SCE’s service area. Image: SCE / GE.

Southern California Edison (SCE), one of California’s three main investor-owned utilities, has signed new long-term contracts with developers of 590MW of battery energy storage.

They include a 325MW project by NextEra Energy, a 200MW project from Recurrent Energy, a 60MW project being jointly developed by 174 Power Global and Hanwha Group, as well as 5MW of aggregated behind-the-meter energy storage from residential solar installation and leasing company Sunrun.

The Sunrun contract, which will see customers’ systems working together to provide demand response in a form of virtual power plant (VPP), stipulates that 5% of that aggregated capacity come from customers in areas most affected by air pollution. Sunrun announced the award of that contract in late November

While SCE did not reveal megawatt-hour capacities of the three utility-scale projects, the company did say in a press release that they will “take advantage of lithium-ion batteries that can store energy for use later”. According to SCE, the storage projects will add dispatchability to local solar power resources into late afternoons and evenings and allow capacity to be used to respond to signals from network and market operator California Independent System Operator (CAISO), including sending energy to the grid during heatwaves and other peak demand events.

NextEra’s project, Desert Peak, and the Sunrun behind-the-meter virtual power plant (VPP) are expected to go online by the beginning of August 2023, while Recurrent Energy’s Crimson project and the 174 Power Global / Hanwha Group Eldorado Valley project are scheduled to be online by the beginning of August 2022.

While SCE and the state’s two other investor-owned utilities (IOUs), Pacific Gas & Electric and San Diego Gas & Electric began their procurements of energy storage capacity largely as a result of the AB 2514 mandated target of 1.35GW by 2024 set by state legislators, all three have surpassed their respective portions of that mandated amount some time ago.

SCE now has in place a target of 30GW of utility-scale storage and 10GW of distributed energy storage to be added to the grid before 2045 – the year by which California is aiming to go fully carbon emissions-free in its electricity system. The 590MW of new procurements and contracts still require approval by the state regulator, the California Public Utilities Commission (CPUC). With SCE having announced a 770MW procurement earlier this year of battery projects aimed at helping the utility reduce its reliance on natural gas, the utility said that the new contracts bring its total amount of procured and contracted energy storage capacity to around 2,050MW.

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