“Super” CCA Collaboration for 500 MW of Long Duration Storage

Eight community choice aggregators are forming a procurement agency to jointly invest in much needed but neglected long duration energy storage.

Leaders of the new Joint Powers Agency will issue a groundbreaking solicitation from their “super JPA“ that will pool the eight members’ resources and bid for up to 500 MW of long duration energy storage by 2026, Silicon Valley Clean Energy CEO Girish Balachandran said. It may become California’s biggest single buy to date of storage that supplies power for 8 hours or more, doubling the current output of shorter-term storage.

The first goal is to make up to a $2 billion investment for “up to 500 MW of LDES from one or more projects” to be on-line date by 2026, according to SVCE’s Oct. 14 presentation to its board .

It should not be only for regulatory compliance but should also be used by JPA member CCAs to serve the California market and earn returns for its energy, resource adequacy, and ancillary services values. A range of technologies may be selected, ranging from second life electric vehicle batteries to pumped hydro storage.

By creating the super-JPA, CCAs would resolve one of the biggest problems in market dynamics “by creating large-scale demand,” Independent Energy Producers Association Executive Director Jan Smutny-Jones said.

CCAs have been procuring 4-hour or less storage for several years but the JPA collaboration is needed to de-risk long term storage’s more significant costs and technical complexities, Balachandran said. It will apportion long duration storage procurement, liabilities, and returns in accordance with each member’s investment.

The JPA’s 500 MW solicitation could be as much as half of the estimated 1,000 MW of long duration storage needed to meet California’s 60% renewables goal set for 2030. But the state’s approximately 24 CCAs could serve 70% or more of California’s load by the mid-2020s because of the growing number of investor-owned utilities’ customers being served by community energy.

Expedited procurement of long duration storage will supplement California’s growing supply of short duration storage to “keep renewables online longer” to meet the state’s ambitious renewables and climate goals, Long Duration Energy Storage Association Executive Director Julia Prochnik said. LDES might also have addressed the state’s recent blackouts by meeting both local and system wide needs.

But the proposed JPA’s real significance will be in driving large-scale procurements for LDES and other resources, IEP’s Smutny-Jones said. Though California agencies’ projections for meeting the state’s emissions reductions goals will require major procurements, this is the first indication of actual competitive solicitation for procurements, he added.

To date, providers of large-scale resources had to find multiple off-takers for “bits and pieces of their large projects,” he said. This is “willing buyers putting a single offer on the table for a specific product at the most competitive price and it is going to move the dial on demand and supply in the market.”

The super JPA

The eight JPA members are Central Coast Community Energy, CleanPowerSF, Marin Clean Energy, Peninsula Clean Energy, Redwood Coast Energy Authority, San José Clean Energy, Silicon Valley Clean Energy and Sonoma Clean Power.

The JPA would be a “risk-minimized, CCA-controlled structure to develop or acquire necessary resources exceeding the procurement needs of a single CCA,” SVCE’s recent presentation to its board stated. That will include storage and renewables.

Besides larger procurements, it will allow the member community energy more negotiating leverage and attract larger-scale, and therefore, lower cost financing. It does not eliminate underlying risks, but as the direct party contracting with project developers, it offers a layer of protection for the individual members.

Member approvals of the JPA agreement are expected no later than February 2021. Member approvals of participation is the procured projects are expected between March and September 2021.

The LDES solicitation

A technology agnostic June request from 13 CCAs “asked the market for ideas” about what long duration storage would be best, SVCE’s Balachandran said.

Providers proposed 58 projects representing 9,183 MW in 14 technology types, he said. They included 10 flow battery and 17 lithium-ion battery projects, 8 compressed air and 11 pumped hydro storage projects, and 12 projects using emerging technologies like thermal-, gravity-based-, and hydrogen storage and second-life electric vehicle batteries.

These technologies may provide “8-hour, 12-hour, multi-day, or even seasonal solutions,” Balachandran said. None of the proposed technologies have been ruled out for the new solicitation because each can supplement renewables and short duration storage in important but different ways.

The key selection criteria for the JPA members will be cost-effectiveness, but technologies that are more locationally feasible and have less harmful environmental impacts will be advantaged, he added.

For the next 10 years to 20 years, “we have to rapidly increase renewables production, but we need to do it in a responsible manner because we also need to keep the lights on,” Balachandran said.

The entire market is moving away from natural gas and toward resource portfolios that include long duration energy storage, Smutny-Jones said. Natural gas “is not going to go away before 2030, but LDES is one of the few alternatives for displacing a significant amount of natural gas through the night and continuing to supply power into the following day.”

The JPA’s proposed 500 MW “is a great start, but it is just the beginning,” the LDES Association’s Prochnik added. It shows the CCAs now understand that long duration storage is needed because “it adds value and does not compete with other sources, and that the power system will need all the options available as the climate crisis adds new and bigger challenges.”

-- Herman K. Trabish

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“Super” CCA Collaboration for 500 MW of Long Duration Storage

Herman Trabish

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