IPP Clearway Energy Group has signed a Energy Storage Exclusivity Agreement (ESEA) with California CCA utility Central Coast Community Energy (3CE) for a 750MW/3,000MWh standalone BESS project located in Monterey County, California.
The agreement, discussed at a 3CE Board of Directors meeting held November 13 2024, gives the Community Choice Aggregator (CCA) exclusivity to negotiate an Energy Storage Agreement (ESA) with Clearway for its Holman BESS project at a later date.
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It is hoped that during the exclusivity period, Clearway will gain greater certainty surrounding permitting and deliverability with the California Independent System Operator (CAISO).
Although the Federal Energy Regulatory Commission (FERC) recently approved a series of reforms put forward by CAISO, the process of obtaining an interconnection agreement for developers is likely to remain a challenge for the foreseeable future.
Projects delayed into the next decade
The Holman project is expected to connect to the CAISO-controlled grid via Pacific Gas & Electric’s (PG&E’s) Moss Landing 500kV substation. The name will be familiar to regular readers of Energy-Storage.news, with the substation also being the point of interconnection for Vistra Energy’s 3GWh Moss Moss Landing Energy Storage project.
Clearway submitted a CAISO interconnection request for its Holman development during 2021 as part of CAISO’s cluster 14 process (queue number 1889), but has yet to secure an agreement. At the time of submission with CAISO, the project was estimated to come online during 2028, however, the Holman project now isn’t expected to be operational until 2032.
Unfortunately for the energy storage industry, this isn’t an issue unique to Clearway, with the majority of projects seeking deliverability with CAISO subjected to lengthy delays. As reported by Energy-Storage.news last week, Juno Beach, Florida-based IPP NextEra Energy Resources (NEER) is also encountering similar delays, with its 400MW Corby BESS facility located in Solano County that’s expected to come online seven years later than originally planned.
Although a handful of reasons exist for project delays, including supply-chain and permitting issues, the lengthy process of obtaining an interconnection agreement with system operators around the US remains a major contributing factor.
Dispatch rights and resource adequacy benefits
In light of these issues, 3CE concluded that it was too early to negotiate contractual terms and conditions with Clearway, especially surrounding pricing associated with the agreement.
Instead, the two parties have negotiated an ESEA which obligates Clearway to provide 3CE with at least one offer to “sell the energy products from the Holman BESS at pricing that reflects contemporary market circumstances”.
The exclusivity period lasts until January 2027, with the two parties having the option to extend this agreement until December 2030 if needed.
Within the 3CE meeting documentation, the CCA included a draft ESA with as many operational and performance terms as possible to “facilitate a shorter negotiation period.” According to the draft contract, the agreement would entitle 3CE to energy, capacity and ancillary services from Clearway’s Holman project for a period of 15 years.
3CE states in its meeting documentation that the ESEA will have no fiscal impact.
Reduced exposure to the volatile short-term marketplace
Although it isn’t uncommon for offtakers to negotiate exclusivity agreements with IPPs, it’s unusual to see one of this length. Within its recent meeting documentation, 3CE stated that it’s executed similar agreements in the past, but only lasting between 3-6 months.
If the procurement team at 3CE decides to go ahead with the ESA, it’ll have to go back to the CCA’s Operations Board to obtain final approval. 3CE hopes the potential agreement with Clearway will reduce its exposure to the “volatile short-term resource adequacy (RA) marketplace.”
Over 7.6GW of storage capacity with contracted with CCAs
In a 7 November, 2024 press release, the California Community Choice Association (CalCCA), an organisation representing the interests of the 25 California’s CCAs, released its annual procurement figures.
CCAs are non-profit programmes which allow consumers to buy energy directly from renewable and storage projects using the transmission and distribution infrastructure of the state’s three big investor-owned utilities, PG&E, SDG&E and SCE.
According to the release, CCAs have now signed 346 long-term offtake agreements covering over 18GW from “new-build clean energy resources.” This total includes over 7,600MW of energy storage capacity made up of 4,881MW from standalone storage assets and 2,785MW from energy storage facilities co-located with other resources.
Making up one of the 346 agreements is a recent Power Purchase Agreement (PPA) between CleanPowerSF, the CCA representing the City and County of San Francisco, and Boulder, Colorado-based IPP Scout Clean Energy. As reported by Energy-Storage.news, Scout’s Gonzaga Ridge project in Merced County will provide 147.5MW of wind energy along with 50MW/200MWh of energy storage capacity for a 20-year period.
