Replacement of Dirty Oakland Peaker Delayed

By Published On: November 2, 2021

The plan to swap out the polluting Oakland Energy Center with battery storage this coming January has been delayed because of interconnection issues. It is a serious problem that is not limited to this plan to replace polluting energy with cleaner alternatives. Last week, California Public Utilities Commission member Martha Guzman Aceves pointed to a big delay in a pilot project in the San Joaquin Valley because of grid inadequacies. The funded project was launched in 2018 and supposed to provide cleaner fuels in more than 1,600 low-income residences but fuel swapping has taken place in only about 80 homes.

The 165 megawatt Dynegy-owned jet-fueled peaking plant near Oakland’s Jack London Square was supposed to be replaced with substation upgrades, electricity switching agreements, and battery storage, under an agreement signed between Pacific Gas & Electric and East Bay Clean Energy in the spring of 2020. The two providers also entered into contracts with Vistra Energy for a 30-40 megawatt battery anchor project with a 4-hour duration to provide local reliability starting at the beginning of next year.

“During studies on how to interconnect battery-storage facilities with substations at the existing plant, the parties determined that necessary upgrades would take longer than expected,” PG&E spokesperson Lynsey Paulo told Current.

Because it was a joint solicitation, EBCE’s contract with Vistra was contingent on PG&E obtaining CPUC approval of the interconnection, EBCE’s spokesperson Melissa Brandt said.

After failing to get regulatory approval, PG&E ended the Vistra contract as well as a smaller project with esVolta in April.

The first of its kind IOU-community energy proposal is expected to be more climate-friendly and a more affordable alternative than a new power plant or transmission line upgrades.

Both energy providers said they were frustrated by the delay. EBCE added it is working with stakeholders to find a “new path forward.”

PG&E Paulo noted that substation upgrades near the Oakland peaker are underway. The investor-owned utility also worked with the California Independent System Operator on revising the 2020 demand forecasts, which allowed the retirement of one of the three 55 MW peaking units.

Both providers are striving for a clean and reliable energy solution for Oakland by 2023.

“PG&E will continue to negotiate for clean energy resources, including potential battery storage, and will file new plans with CAISO and the CPUC as agreements are reached,” Paulo wrote in an email.

The Dynegy-owned plant has been operating under a “reliability-must-run” contract with the grid operator. In late September, CAISO approved extending RMR contracts for two of the three 55 MW units until the end of 2022, according to an Oct. 27 CAISO memo.

PG&E owned the plant, built in 1978, until 1998 when it divested it as part of California’s botched effort to open up the state electricity market to competition. The utility also has been the buyer of the Oakland plant output.

Since the agreement between PG&E and EBCE, the community aggregator has signed six contracts to develop 550 MW of wind and solar power, and 110 MW of battery energy storage. Two projects went online this year: a 162 MW utility-scale solar project in Rosamond in Kern County pursuant to an agreement with the City of Palo Alto and Community Energy Alliance, with 112 MW to EBCE. The other is a 57.5 MW wind project in Livermore.

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