| Independently Powered Energy News

Updated Feb. 10 San Diego Gas & Electric has lined up three contracts to build 161 megawatts of utility-owned energy storage set to be online by summer 2023 to help balance the grid. All three will use lithium-ion battery technology. They come at an estimated $400 million cost to ratepayers and range in location from the Pala Indian Reservation to Vista to the Imperial Valley. They got the green light from the California Public Utilities Commission on Feb. 10. The big batteries are supposed to power a grid stressed by heat-driven air conditioning, starting in 2023. The contracts are for battery projects sized 131 MW, 20 MW and 10 MW. The two larger projects will provide four hours of output and the smallest one reportedly will provide up to six hours of continuous output, according to the CPUC’s resolution. This resolution, which approved SG&E’s request for cost recovery, waives building permit requirements for the three projects. That is because the utility is responding to last summer’s emergency order to bring online 2,000-3,000 MW of new resources to meet this summer and next summer’s peak demand on roasting days and evenings as solar power drops. SDG&E’s share of that amount is 200-300 MW. The projects also are being advanced to help increase the planning supply cushion from 15% to 20-22.5% to keep power flowing across the grid during intense heat waves. “We’re very supportive of these projects" and see SDG&E’s procurement as “critical for emergency reliability” and “greening our grid,” Alex Morris, California Energy Storage Association executive director, said in an email to Current . He added that the expected approval, albeit rushed, “can allow for healthy competition from projects and developers coming through the interconnection queue.” The 131 MW battery storage would be built, operated, and owned by Consolidated Edison Development for 10 years and then transferred to SDG&E. The 20 MW unit would be built by Fluence Energy. The smallest one would be built by Mitsubishi Power America. ConEdison, Fluence and an affiliate of SDG&E’s parent, Sempra Energy, are members of the California Energy Storage Association. Are costs reasonable? Cal Advocates raised concerns about the costs of the 131 MW deal with ConEdison. The CPUC ratepayer advocate also called for extending the depreciation of the projects from 10 to 20 years to lower costs charged to ratepayers. The CPUC resolution agrees with Cal Advocates that the 131 MW Westside Canal proposal is above-market costs. But it also finds the higher price tag, which was not revealed, is largely due to supply chain constraints. Covid and other factors have caused the market to experience “an increase in capital cost for [battery storage] projects over the last year,” it states. The resolution declines to address the issue of depreciation, whether 10 or 20 years. It says that should be dealt with in SDG&E’s upcoming May 2022 general rate case rather than in an Advice Letter proceeding. The California Community Choice Association raised no objections to the three battery projects but seeks clarification on how the Commission intends to oversee the operations and allocate the benefits. The projects are expected to start up at the end of 2022 and early 2023 and be ready to serve peak loads in the summer of 2023. Batteries next to substations The lithium-ion batteries are slated for locations near three SDG&E substations. The 131 MW ConEd Westside Canal will loop into the Campo Verde-Imperial Irrigation District gen-tie line and 230kV transmission interconnect to SDG&E’s Imperial Valley Substation. The 20 MW Fluent project will go in directly next to the Melrose Substation in Vista. The 10 MW Mitsubishi, known as Pala Gomez, goes next to the Pala Substation in Pala. All the projects are in the California grid operator’s interconnection queue. The 131 MW Westside battery project entails a major modification of another project to allow for the full capacity to be delivered, with a large-generator interconnection agreement expected to be reached this month. SDG&E says it also will reach Small Generator Interconnection Agreements for the 20 MW Melrose and 10 MW battery projects this month. Last week, the City of San Diego and the San Diego Water Authority announced they were negotiating with a Berkshire Hathaway subsidiary to finance and build a long-planned 500 MW pumped storage project at the San Vicente reservoir, which would provide 8 hours output. Photo: Courtesy of California Solar and Storage Association

No Result