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Texas utility CPS issues 500MW energy storage RFP

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CPS Energy, a municipal utility serving San Antonio, Texas, has launched a request for proposals (RFP) for up to 500MW of energy storage projects.

The utility has launched the RFP as part of a new power generation plan approved by its Board earlier this year. It said the RFP is diverse and responses are welcomed for both large-scale and smaller projects.

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The storage resources will strengthen its future power generation portfolio by adding flexible resources that can quickly respond to changes in customer demand or grid conditions, said CPS, which claims to be the largest municipally owned electric and natural gas utility in the US.

Smaller-scale projects can be strategically placed at different locations within the CPS Energy service area, improving reliability in specific locations, it added.

The new RFP is the first it has done for standalone storage projects though past RFPs have included storage as part of generation projects. It issued a 700MW solar one and a 50MW community solar one earlier this year.

The deadline for proposals is 18 October, 2023, and CPS detailed the following key dates below.

Texas is the largest energy storage market in the US along with California. Although California has more online today, over 5GW versus around 3.3GW in Texas, the latter has a huge pipeline which could exceed 8GW of operational capacity by October 2024 (figure from ERCOT, which operates the bulk of the state’s grid.

However, battery storage operators in the state recently voiced concern over a proposed rule change from ERCOT which would see large-scale battery projects forced to, in their view, hold more charge than necessary to participate in ancillary services.

As a municipally owned utility, CPS Energy now has the ability to take advantage of the investment tax credit (ITC) for clean energy projects, including storage, by receiving its value in the form of direct payments from the US government, a provision brought in by the Inflation Reduction Act.

Another municipal utility, Austin Energy, said at the Energy Storage Summit US in March this year that there is now more incentive for utilities like it to fully own energy storage projects than just contract with or purchase power from them.

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