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Oregon’s PGE makes ‘largest utility BESS procurement in US outside of California’

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Portland General Electric (PGE) has procured 400MW of battery energy storage resources split across two large-scale projects in the Oregon utility’s service area.

With PGE claiming it to be the single largest procurement of energy storage in the US by a utility company outside of California, it comprises a 200MW project which PGE will co-develop and own, and another of equal size for which it will contract with the owner for usable capacity.

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The resources were selected through a competitive bidding process and represent the last set of procurements from PGE’s 2021 all-source request for proposals (RFP), through which it sought 375MW to 500MW of renewable energy resources and around 375MW of “non-emitting dispatchable capacity”.

The battery energy storage system (BESS) procurements fall under the latter category. The key application the BESS resources will perform is helping PGE manage its evening peak demand, outputting stored power to the grid during the hours of 5pm to 9pm, when solar PV production has tailed off and customer demand for electricity rises.

Oregon’s regulatory Public Utility Commission (PUC) put in place mechanisms for two utilities in the state, PGE and Pacificorp (trading as Pacific Power) to begin procuring energy storage resources back in 2017, reported by Energy-Storage.news at the time.

Eolian, NextEra Energy Resources contracted with through RFP

PGE has entered an agreement to construct a project called Seaside Grid, with developer Eolian. PGE would own the BESS asset, which it said represented a US$360 million investment (minus funds used for construction). It will be a 4-hour duration BESS (200MW/800MWh). Seaside Grid has an estimated commercial operations start date at the end of June 2024. The project is in Portland.

Also with Eolian, PGE entered a storage capacity resource agreement for the developer’s Troutdale Grid BESS. Also 200MW/800MWh, the project subsequently changed hands after that deal was concluded. PGE has now contracted with new owner NextEra Energy Resources for a 20-year agreement, during which time a NextEra Energy Resources subsidiary will sell capacity to the utility. Located in the Oregon city of Troutdale, its estimated commercial operation date is at the end of 2024.

PGE is also still continuing negotiations for the construction of Clearwater, a 75MW battery project from the RFP, which the utility would also own itself. While the utility didn’t name the developer behind Clearwater in a press release, NextEra Energy Resources is constructing a 311MW wind farm in Montana of the same name which has a construction agreement and 30-year power purchase agreement (PPA) in place with PGE.

Eolian incidentally recently celebrated a US energy storage industry milestone when it became the first developer in the country to leverage the new investment tax credit (ITC), closing a tax equity investment in two Texas standalone BESS projects totalling 100MW/429MWh.

Eolian was also reported as having made the single biggest raise of venture capital (VC) funding among energy storage companies worldwide in 2022 by market research firm Mercom Capital, with US$925 million in VC funding.

Meanwhile, NextEra Energy Resources, the clean energy developer arm of major US utility holding company NextEra, added just over 2GW of new renewable energy resources to its backlog in the first quarter of this year, our colleagues at PV Tech reported a few days ago as NextEra announced its Q1 2023 financial results.

In partnership with PGE, NextEra Energy Resources also owns and operates Wheatridge Renewable Energy Facility, claimed to be the US’ first large-scale combined wind-solar-battery asset. Wheatridge includes 300MW of wind generation which went online in 2020, and a 50MW solar PV array and 30MW BESS, both of which went into service in Spring 2022.

‘Important component of the clean energy economy’

“Battery storage is an important component of the clean energy economy. These new, Oregon-based projects are a significant addition to our wind, solar and hydro resources — providing grid reliability, resiliency and flexibility while helping us manage costs,” PGE CEO and president Maria Pope said.

More RFPs will be on the way – the company was expected to make another all-source RFP for 2023, to meet projected shortfalls in electricity towards the second half of this decade, and still might.

However, since the passing of a 100% clean energy target policy for Oregon took place after the launch of the 2021 edition, the utility has filed a more comprehensive integrated resource plan (IRP) combined with a clean energy plan (CEP) in March, which needs to go before regulators.

Through the Oregon House Bill 2021 (HB2021), the state is targeting reaching 80% clean energy by 2030, 90% by 2035 and 100% by 2040.

The 400MW procurement was announced alongside the company’s first quarter 2023 financial results last week (28 April), in which PGE reaffirmed its 2023 adjusted earnings guidance of US$2.60 to US$2.75 per diluted share as well as a US$300 million common stock offering.

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