Utilities meet tight energy storage deadline
Fewer than four months ago, the still-emerging energy storage industry faced a big challenge.
With the Aliso Canyon natural gas field in Los Angeles essentially out of commission after a massive leak, the California Public Utilities Commission called on San Diego Gas & Electric and Southern California Edison to come up with storage solutions to help ward off the risk of power outages for the upcoming winter.
The two investor-owned utilities did not have to come up with a specific amount of storage but they were under a major time constraint: SCE had to find the sources by the end of the calendar year while SDG&E was given roughly the same target deadline.
It seemed like a tall order but in less than three months, SDG&E came back to the commission saying it had lined up two lithium-ion battery storage facilities totaling 37.5 megawatts that are scheduled to be ready by Jan. 31 of next year.
And on Thursday, the CPUC is expected to approve contracts SCE has procured with three developers for 27 megawatts of energy storage expected to be online by Dec. 31.
“It really is unprecedented to see it happen this quickly,” said Gabriel Petlin, an analyst with the energy division of the CPUC.
SCE expects to bring even more online by the end of the year.
Colin Cushnie, SCE’s vice president of energy procurement and management, told the Union-Tribune on Tuesday that the utility plans on adding 40 more megawatts of energy storage by the close of 2016, bringing its total to 67 megawatts.
“That was at the high end of our estimate of what might be available in a very short period of time,” Cushnie said.
For supporters of the nascent energy storage market, the quick responses from SDG&E and SCE indicate the industry is about to live up to the high expectations often attached to it.
“What this really shows is how quickly we can add diversity to the fleet in these critical areas,” said Alex Morris, policy and regulatory affairs director at the California Energy Storage Alliance.
The CPUC order came in response to an emergency proclamation issued by Gov. Jerry Brown on Jan. 6.
Since the Aliso Canyon facility is the second-largest natural gas storage field in the western United States, there are worries that grid vulnerabilities may lead to power outages.
Brown ordered the CPUC and other state agencies ensure reliability of electricity while natural gas injections at Aliso’s 114 wells are inspected.
The latest figures from Southern California Gas — the utility that operates Aliso Canyon — show 20 of the wells have received approval by the Division of Oil Gas and Geothermal Resources (DOGGR) but injections won’t begin until DOGGR completes a safety review and the CPUC deems the field is safe.
SCE’s submissions consist of a 20-megawatt/80 megawatt-hour project that will use battery management software, a 2-megawatt lithium-ion battery array and a 5-megawatt lithium-ion system.
The anticipated extra 40-megawatt projects will come from energy storage devices that will be owned by SCE.
SDG&E signed its agreement with AES Energy Storage for a 30 megawatt/120 megawatt-hour facility in Escondido and a smaller 7.5 megawatt/30 megawatt-hour project in El Cajon.
The cost of energy storage contracts are paid by ratepayers. However, the financial details remain confidential, as per CPUC rules.
“What I can tell you is we were able to demonstrate to the CPUC this was a cost-effective deal for our customers,” said Josh Gerber, SDG&E’s manager of advanced technology integration.
Gerber said SDG&E has no further plans to add more storage projects before the end of this year.
The generally accepted figure for chemical, or battery, storage is $500 per kilowatt-hour, although some projects can run a bit higher depending on their complexity, while some academic papers have listed the break-even capital cost for large-scale storage systems at $100 per kilowatt-hour.
“It does have a cost,” Petlin said. “The objective was to avoid some of the other greater costs that are unknown — the cost of power outages, the cost of reliability issues. We can’t put a dollar figure on what the net cost figure is because we don’t know what we’re avoiding.”