Dive Brief:
- The California Public Utilities Commission on Thursday authorized three energy project contracts proposed by San Diego Gas & Electric, in addition to four contracts proposed by Southern California Edison, that may collectively present more than 800 MW of new solar and storage capability to assist make sure the reliability of the state’s electrical grid this decade.
- SDG&E’s proposal included one hybrid solar and storage undertaking, anticipated to come on-line in June, in addition to two battery storage initiatives scheduled to come on-line in mid-2024. SCE’s proposal, in the meantime, comprised 4 front-of-the-meter power storage initiatives.
- The initiatives are the consequence of solicitations carried out after the CPUC authorized an 11.5-GW procurement package in 2021. The order goals at guaranteeing the reliability of California’s grid towards the center of the last decade, and marked the company’s largest-ever capability procurement in a single shot.
Dive Insight:
The CPUC’s 11.5-GW mid-term reliability procurement order sought to meet the state’s grid wants between 2023 and 2026, given the then-planned retirement of the two.2-GW Diablo Canyon nuclear power plant by 2025, in addition to the closure of a number of pure fuel crops. The state is now contemplating extending the life of the Diablo Canyon plant via the top of the last decade. However, it continues to concentrate on procuring new clear power sources to meet grid wants, with the 2021 resolution requiring 2 GW to come on-line by August, one other 6 GW by mid-2024, adopted by installments of 1.5 GW and 2 GW in 2025 and 2026, respectively.
In September 2021, SDG&E issued a request for presents to meet its share of these procurement wants, and then reopened the solicitation final April for brand spanking new bids in addition to updates to earlier ones. It filed a proposal with the fee in October, looking for approval of two lithium-ion battery storage initiatives – the 80-MW Bottleneck undertaking and 100-MW Cald undertaking – in addition to a 20-MW hybrid solar and storage facility. SCE, in the meantime, additionally launched an RFO in 2021, and filed its newest proposal with the fee in October, proposing 4 storage initiatives, starting from 69 MW to 230 MW, for a mixed capability of 619 MW.
The expedited approval of the 4 power storage contracts from the fee will assist present certainty to maximize the probability of bringing the initiatives on-line on time, in accordance to SCE spokesperson David Song.
“[T]his energy storage will provide additional reliability to the grid, especially during the critical hours of 4 p.m. to 9 p.m,” Song said, adding that “they can also be used to respond to the CAISO’s signals, high-demand events, heat waves, or when the energy grid is strained, as we saw last September.”
Both utilities’ proposals obtained pushback from the CPUC’s Public Advocates Office, which filed protests with the fee in November. In the case of SDG&E’s request, the workplace notes that the Inflation Reduction Act, signed into regulation in August, created an funding tax credit score for standalone power storage sources, and that SDG&E didn’t attempt onerous sufficient to negotiate down the value of two of its initiatives to account for that.
SDG&E has pushed again on these arguments, noting in a submitting with the fee that making an attempt to restart negotiations for the contracts would decelerate the approval course of and jeopardize the initiatives.
The Public Advocates Office additionally raised considerations with SCE’s proposal, saying that the utility may be overpaying for one of its contracts. In response, the utility reiterated that its proposed contracts are “the least value, best-fit sources” to meet its procurement targets.
The fee concluded in its resolution that SDG&E’s solicitation was managed fairly and that re-negotiating contracts at this stage would threaten its capacity to meet procurement necessities. And whereas the company voiced considerations that utilities not overpay for procurement, it concluded that SCE has opted for “least cost, best-fit” sources.