PG&E & CC Power Storage Solicitations: The Opening Salvo for “A Decade of Execution”
By Alex Morris, Executive Director
January 27, 2022
Energy storage in California started the new year with a jolt. Late last week, investor-owned utility Pacific Gas & Electric (PG&E) announced it intends to deploy nearly 1,600 megawatts (MW) of incremental battery energy storage by mid-2024. The announcement is just one of the first in what promises to be a very active year – and decade -- for the state’s energy storage industry.
Congratulations to CESA members Terra-Gen, Strata, NextEra Energy, and Arevon (working with Tenaska), which together will contribute seven projects totaling about 1,150 MW. If approved, the projects will come online between August 2023 and June 2024.
This mega-procurement announcement follows a banner 2021 for storage deployment. California – already the world’s largest and most mature storage market – increased its grid-connected storage capacity to almost 4,000 MW at year-end, from less than 500 MW in the summer of 2020.
PG&E’s procurement, selected from 73 bids, is the latest sign that the California storage market has transitioned from a state of market development to one of market execution and optimization. By updating traditional procurement sizes of tens and hundreds of MWs by an order of magnitude, this solicitation hints at the scale of market growth being realized in California. Considering the California Public Utilities Commission (CPUC) estimates the State will require approximately 14 gigawatts (GW) of storage by 2032, procurements in terms of GW likely will become more frequent.
January’s procurement news is not limited to 4-hour energy storage. As CESA’s special project Long Duration Energy Storage for California's Clean, Reliable Grid noted, California needs at least 45 GW of long duration energy storage (LDES) by 2045 to reliably and cost-effectively meet decarbonization goals. Underscoring the importance of LDES, the CPUC issued Decision 21-06-035, requiring load-serving entities to procure 1 GW of new long-duration storage in the next 5 years.
In light of this directive and the growing need for long duration storage, California Community Power (CC Power), an organization comprised of seven community choice aggregators (CCAs), approved entering into an energy storage service agreement with REV Renewables for 69 MW (552 megawatt hours (MWh)) of 8-hour storage. The REV Renewables Tumbleweed project will be located near Rosamond, in Kern County, California, with an expected online date of 2026. This project will satisfy approximately 55% of the D.21-06-035 LDES requirements of CleanPowerSF, Peninsula Clean Energy, Redwood Coast Energy Authority, San Jose Clean Energy, Silicon Valley Clean Energy, Sonoma Clean Power Authority and Valley Clean Energy. Additionally, Central Coast Community Energy (3CE) is contracting for four storage projects via a VRB Flow Battery to the tune of 42 MW (266 MWh), with three of the four projects being long-duration storage.
These two procurements demonstrate the pivotal role that energy storage, in all its forms, will play in the decarbonization of California’s economy.
At CESA, we are proud to be the voice of storage in shaping and accelerating the role of energy storage in the electric power sector and speeding the transition of the state’s grid to a more affordable, efficient, reliable, safe, and sustainable system. We are in final preparations for our 13th annual Market Development Forum, to be held March 1-2 in Berkeley, California. Its theme of “A Decade of Execution,” is an apt one as we analyze the very dynamic operating landscape around us and work together to chart a course that moves the market forward and ensures our 100+ members will continue to play a key role in California’s clean energy evolution. If you are interested in joining us in March or in becoming a CESA member, please contact our Membership Manager Emily Yan at eyan@cesa.org.