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Local capacity contract for 600MWh of California battery storage signed by Recurrent Energy, PG&E

Rendering of Recurrent Energy’s Slate solar-plus-storage facility which is currently under construction, also in California. Image: Canadian Solar / Recurrent Energy.

Canadian Solar’s project development subsidiary Recurrent Energy has signed a 15-year deal with California utility Pacific Gas & Electric (PG&E) for energy capacity from one of the world’s biggest battery energy storage system (BESS) projects. 

Canadian Solar said yesterday (10 August) that the Resource Adequacy (RA) deal has been signed for the 150MW / 600MWh second phase of Crimson, a battery storage project which will total 350MW / 1,400MWh when it is completed in summer 2022. 

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Resource Adequacy (RA) is the mechanism by which California’s electric load-serving entities must ensure there is sufficient local capacity available to meet customer needs. PG&E is procuring the energy storage capacity from Recurrent in response to a directive from the regulator California Public Utilities Commission (CPUC) in March. It and the other two main investor-owned utilities in the state — Southern California Edison (SCE) and San Diego Gas & Electric (SDG&E) — were told that they must act to prepare for extreme weather conditions expected this year and next which will put strain on the grid as demand for electricity spikes. 

Recurrent Energy already has a long-term contract in place with SCE for the 200MW / 800MWh Phase 1 of Crimson, which is in the state’s Riverside County. The US Department of the Interior (DOI) gave approval in May for the project, which is colocated with 350MW of solar, to be constructed on public land. The system is connected to the Southern California Edison Colorado River Substation. It is just slightly smaller than the 400MW / 1,600MWh Moss Landing ESS in California’s Monterey County which went online in January and is currently the world’s largest such project

“It is becoming increasingly important to be able to send energy to the grid during heatwaves and other peak demand events,” Canadian Solar chairman and CEO Dr Shawn Qu said. 

“We are pleased to help PG&E enhance grid reliability in California by providing critically needed resource adequacy capacity through our long-term battery storage solution. We are accelerating all our development processes to ensure we reach the target commercial operation date of summer 2022.”

Also announced yesterday was another, much smaller RA contract with PG&E for a battery storage system, by Ormat Technologies, a geothermal energy company which has diversified into energy storage. 

A 10-year long-term RA agreement has been signed for 10MW of Ormat’s 20MW / 40MWh Pomona 2 BESS which is currently under construction and targeting the start of commercial operation by October 2022. The utility will also play the BESS capacity into ancillary services markets and other revenue stream-generating opportunities.

Doron Blachar, Ormat CEO, explained that the agreement also comes as a result of CPUC directing the state’s three IOUs to procure 1,000MW of incremental capacity by summer 2022 to ensure reliability of electricity supply in the event of extreme weather conditions. 

His company is targeting the deployment of 200MW to 300MW of new battery projects by 2024 to add to a current operating portfolio of 83MW / 176MWh of battery assets. Canadian Solar meanwhile has been targeting taking a bigger slice of energy storage market share for some time and is expected to offer an update in its quarterly financial results reports, due this week. In June Canadian Solar said Recurrent Energy had 2.3GWh of battery storage projects in “late stages of development,” all of which are in California, and a more geographically spread out pipeline of several gigawatts at much earlier stages.

California Governor Gavin Newsom recently made moves to expedite renewable energy, energy storage and demand response projects as he declared a fresh State of Emergency over the expected impacts of extreme heat waves and wildfires that could batter the US state over the next couple of summers.  

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