Plans by Vistra Energy to build battery storage in the place of retiring fossil fuel plants in Illinois have been handed a boost by the Federal Energy Regulatory Commission (FERC).
US electricity retail and generation company Vistra has proposed to build battery energy storage system (BESS) projects at its Joppa and Edwards power stations. The state of Illinois is currently running a programme to transition away from coal to renewable energy, the “Coal-to-Solar Energy Storage Grant Program”.
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As part of that programme, in June this year, state grants totalling US$280.5 million were confirmed for power companies looking to build such facilities. Vistra’s Joppa BESS in Massac County and Edwards BESS in Peoria were among five large-scale BESS projects to be approved for grants.
Joppa would be converted from housing a 948MW coal-fired plant and 239MW gas-fired plant and Edwards from 560MW of coal-fired generation, with Vistra planning a 37MW BESS at each site.
Illinois agreed for each Vistra project to get US$40.7 million of grant funding, as reported by Energy-Storage.news in June. Vistra would own and operate them.
However, while Coal to Solar emphasised the urgent need to get new resources built, aiming for in-service dates during 2025, Vistra said that rules around connection to the regional Midcontinent Independent System Operator (MISO) grid made it difficult to meet the agreed timeline.
MISO generator interconnection procedure (GIP) rules have since 2019 allowed for owners of generation units connected to the grid an expedited route to replacing older, polluting generators with newer, more efficient resources.
However, provisions put into place to prevent queue-jumping ahead of other projects in the interconnection process in the new rules include requirements to file interconnection requests more than a year ahead of the outgoing facility’s retirement date. It also has various restrictions around sale or transfer of projects.
With Joppa and Edwards scheduled to go into suspension and then retirement between September this year to the beginning of 2023, Vistra pointed out that it is unable to use the MISO generation facility process for the two BESS projects.
That’s because the BESS projects are being developed by project business entities that are technically separate from the owners of the thermal power plant assets and the rules on replacement state that only the same owners can get an expedited grid interconnection agreement.
Putting the two BESS projects through a standardised interconnection study process instead would severely hamper Vistra’s ability to bring them online by an agreed June 2025 deadline for the Coal-to-Solar grant, the company argued.
Regular readers of Energy-Storage.news may remember that Vistra advocated for the introduction of the grant programme and associated policies back in April 2021 as the company brought forward Joppa’s closure date to this year from 2025, in response to complaints about the pollution it caused.
Originally called the Illinois Coal to Solar and Energy Storage Act, it was tabled in 2019. Vistra, as an operator of 5.5GW of coal power plants, equivalent to about 40% of MISO’s summer peak load is obviously more exposed to it than most.
The company warmly welcomed the programme’s introduction as part of Illinois’ Climate and Equitable Jobs Act in September 2021, which commits to 50% renewable electricity by 2040 and 100% carbon-free electricity by 2045.
FERC ruling ‘moves the line again’
Vistra applied in early August for a one-time limited waiver of MISO’s Open Access Transmission, Energy and Operating Reserve Markets Tariff.
FERC granted the waiver on 8 November, permitting the two projects to be built to replace the Joppa and Edwards generation facilities with energy storage systems at the same point of interconnection.
The Commission was satisfied that Vistra acted in good faith in making its request so that its BESS projects be executed in a “more timely, cost-effective and efficient manner” and that the waiver would be applicable this once only.
FERC also acknowledged that Vistra’s argument was well-founded. Requiring the BESS projects to go through the standard interconnection process without a waiver would indeed jeopardise the ability to get them commissioned on time to get the Coal-to-Solar funding.
MISO’s generation facility replacement process meanwhile would make it harder for Vistra to get external financing for the systems, given the restrictions on ownership transferability and changes.
FERC was also satisfied that Vistra was not effectively proposing a queue jump.
FERC Commissioner Allison Clements noted in remarks that while the transferability restrictions may be well-intentioned to prevent generation facility owners from selling on grid interconnection rights to unconnected third parties, “they need a fresh look”.
“In today’s order we allow two Vistra companies to fully transfer their existing generators and associated interconnection rights to new, non-subsidiary affiliated entities and allow those new entities to nonetheless use the fast-track generator replacement process,” Clements said.
“This essentially moves the line again—existing owners of generation need not retain any ownership or control over a retiring generator, but that generator’s interconnection rights can still be re-used on a fast-track basis for a replacement generator at that site.”
In some ways, interconnection to the grid is considered the most valuable part of a front-of-the-meter (FTM) utility-scale energy storage project, being the means through which assets can access the various revenue streams open to them through wholesale markets.
In this way, legacy power plant assets present a prime opportunity for redevelopment into battery storage sites, enabling the new resources to access the grid from an existing connection. Another major factor making this an attractive prospect is that, as hinted by Vistra’s waiver request, interconnection queues are congested and lengthy.
Various initiatives are underway to try and streamline the interconnection process, including through a multi-stakeholder programme with participants including the US Department of Energy and the Interstate Renewable Energy Council.
Energy-Storage.news’ publisher Solar Media will host the 5th Energy Storage Summit USA, 28-29 March 2023 in Austin, Texas. Featuring a packed programme of panels, presentations and fireside chats from industry leaders focusing on accelerating the market for energy storage across the country. For more information, go to the website.