Southern California Edison last week divulged a blockbuster portfolio of 74 newly signed contracts totaling 2,221 MW of power from natural gas, distributed solar, distributed and grid-scale energy storage, energy efficiency and demand response.
The investor-owned utility needs the power in the West Los Angeles Basin and Moorpark areas to replace the soon-to-be decommissioned San Onofre Nuclear Generating Station and older natural gas plants that rely on ocean water for plant cooling.
The California Public Utilities Commission must still approve the contracts, which represent enough power for about 950,000 homes, according to SCE.
Among the big winners are:
- AES, which is contracted to supply 1,284 MW of combined-cycle natural-gas capacity and 100 MW of grid-scale battery storage;
- NRG Energy, which is signed up for 316 MW of gas-fired peaking power, 102.5 MW of energy efficiency, 75 MW of demand response and 500 kW of distributed energy storage;
- Stem, which signed two contracts to supply 85 MW of battery energy storage;
- SunPower, which inked six deals to provide 50 MW of behind-the-meter photovoltaic systems; and
- Advanced Microgrid Solutions, which agreed to four contracts to supply a total of 50 MW of distributed energy storage.
Edison received more than 1,800 bids in the solicitation, which was initiated last year.
“This solicitation is the first time that such a wide range of new diverse resources were directly competing in the purchasing process,” said Colin Cushnie, SCE VP of energy procurement and management, in a statement. “No single energy source can give us everything we need all of the time, particularly with our emphasis to use environmentally clean resources. To provide for flexibility, we need to accommodate a mix of energy resources.”
‘Historic’ moment for energy storage
With five energy storage suppliers combining for 261 MW in 24 separate contracts, the nascent industry heralded the development as key moment in the commercialization of non-hydro-based energy storage.
“This is a historic event in the history of the grid. We have definitely reached a turning point, or a no-turning back point,” Janice Lin, executive director of the California Energy Storage Alliance, said in an email. The trade association noted that California utilities “are proving the value of energy storage in various applications from transmission-connected to customer-sited systems.”
According to the U.S. Department of Energy’s energy storage database, currently there are only 50 operational battery-based energy storage systems connected to California’s grid. These mostly commercial and grid-scale storage systems range from 15 kW to 8 MW, and total approximately 32 MW. Another 25 projects totaling about 7 MW currently are under construction, shows the DOE database.
Karen Butterfield, Stem’s chief commercial officer, called the company’s selection “a really stabilizing factor” and its “biggest single deal.” The first of its projects contracted by Edison is scheduled for completion in 2016.
The five-year old company previously has been picked to provide its advanced storage technology, proprietary software and data analytics to the Sacramento Municipal Utility District and the Hawaiian Electric Company, and it is active in California’s wholesale energy market. The company focuses on storage solutions for commercial buildings.
“In many ways, it’s a guarantee that the company will have a certain amount of glide path into the future, with uncertainties around various incentives,” Butterfield said in an interview. “It’s also really important that utilities, and Southern California Edison in particular, recognize the value of distributed storage and allow it to compete in an all-source way.”
Like some solar companies, Stem offers a financing program that allows customers to install its storage system with no upfront cost. The company is backed by approximately $105 million from investors including Angeleno Group, Iberdrola and GE Ventures.
Edison ‘changing the game’
“Edison is changing the game with this investment in ‘customer-sited’ energy storage,” stated Susan Kennedy, chief executive of Advanced Microgrid Solutions. “By harnessing the power of energy demand in commercial buildings, SCE is turning its largest energy users into its cleanest, most efficient grid resource.”
Founded just two years ago by Kennedy, who was chief of staff to former California Gov. Arnold Schwarzenegger, the company is developing what it calls “hybrid-electric buldings,” which include battery technology and advanced energy management software. Its first 10 MW-project is targeted for completion in late 2016.
LA skyline photo CC-licensed by Geoff Simon on Flickr.