Inside construction of the world’s largest lithium ion battery storage facility
SDG&E’s 120 MWh Escondido storage project will help mitigate a natural gas shortage in southern California
e largest battery storage system in the world will also be one of the fastest constructed in history.
In August, San Diego Gas & Electric tapped energy storage company AES to install two energy storage projects totaling 37.5 MW, 150 MWh. When completed, the larger, 120 MWh project is expected to be the single biggest lithium ion battery in service on a utility grid in the world.
Both battery facilities are expected to be online by the end of January 2017 — nothing short of miraculous in an industry where deploying assets, especially newfangled technologies, can take years.
And the companies are not alone. Southern California Edison and Tesla announced a 30 MW, 80 MWh project in September that is expected to be online even sooner, and will be the largest operating battery for a time.
The accelerated deployment comes in response to an unprecedented shortage of natural gas for electricity generation in southern California. Last October, a leak at the Aliso Canyon gas storage facility outside Los Angeles caused it to be shut down, constricting fuel supplies for area plants.
Fearing blackouts, the California Public Utilities Commission quickly mandated a series of mitigation measures, including an expedited procurement for local energy storage resources. The more renewable energy that can be stored during the day, the reasoning went, the less need to fire up fossil fuel generators as electricity demand increases in the evening.
The CPUC order directed the utilities to identify storage projects that could be sited, constructed and put into operation in only a few months. Though the regulators said storage resources must be “cost-effective” compared to other local capacity products, no pricing details for the projects have been released.
At first, the order only concerned Southern California Edison, whose service territory includes the affected area. But when the procurement was expanded to include SDG&E, storage company officials said the utility was ready to hit the ground running, thanks in part to a previous CPUC order to procure 165 MW of storage in its territory.
“They were already looking at storage and understood the technology,” Brian Perusse, vice president for international market development at AES told Utility Dive during a visit to the 120 MWh battery in Escondido. “They were doing things before this ever came on the radar and nothing would have happened at this speed had they not already been doing things.”
The expedited deployment is testing the mettle of both utility and developer — pushing them to condense the typically year-long siting and construction process into just a few months. But executives say the gas crisis could help prove that energy storage can serve needs on the bulk power system, potentially becoming a viable replacement for gas peaker plants. And the lessons from the speedy installation could help build confidence in long-duration storage and boost the sector around the world.
The SDG&E project
Initially, the CPUC mitigation plan for Aliso Canyon included the utilities in the greater Los Angeles area. The Department of Water and Power, for instance, was authorized to halt economic dispatch of generation and allowed burn diesel in dual fuel plants when demand spiked during the summer.
But comments in the regulatory docket suggested that SDG&E be allowed to include some of its local capacity resources in the mitigation plan, and regulators assented in May. At that point, the utility was already was already running a Request for Offers for large-scale energy storage to meet its CPUC mandate, according to Randy Nicholson, SDG&E’s policy manager for advanced technology.
“We had gone through an evaluation of firm bids from AES and others and that actually started about 10 days before the [Aliso Canyon] resolution came out,” Nicholson said, “so we were getting to know each other really well when the resolution hit and that allowed us to move really quickly.”
Because of the tight timeline, SDG&E leaned toward firms with ample experience in deploying large-scale storage quickly. That gave AES, the largest battery installer in the world, an advantage.
“We’ve done this a number of times. We built a 32 MW project in 2011, another 20 MW facility and other projects around the world,” Perusse said. “There’s a knowledge base and a team built so you know some of the problems before they occur in the process so there’s some comfort around that.”
“One of the things that made the choice easier with AES was [they] were coming off six successful deployments,” Nicholson said. “That helped because we knew for this project meeting the timeline was critical … and we didn’t want to take a chance on someone who didn’t do a project this year or hasn’t done something in a while.”
When Utility Dive visited San Diego in early October, the AES facility was little more than an empty industrial lot next to a substation — a site chosen for its easy access to the bulk power grid. Wooden frames sat on slabs of cement where, eventually, the batteries would be sited:
Battery operation and upkeep
Once in operation, the two AES systems will combine to provide 37.5 MW of power for four hours on a nearly daily basis. Because the batteries count toward the utility’s local capacity requirements, that stored energy will replace fossil fuel generation otherwise deployed to meet peak demand in the evening.
“It’s going to act like a sponge,” said Hanan Eisenman, SDG&E spokesperson. “Let’s say the middle of the day you have overproduction of solar, you just soak that up with the battery and then you got the evening peak usage time at 5 p.m. … we can release it at that time.”
Under the Aliso Canyon resolution, storage resources must qualify for any local capacity requirements stipulated by the California ISO, Perusse said. “That’s sort of California industry code for being a resource adequacy resource, so you’re obligated to bid or schedule into the markets on a daily basis.”
“In effect and in administrative form at the ISO, these [batteries] would be peaking resources,’ he said. “They will be bid and scheduled and receive market rents and receive the same compensation as a generator.”
Using a battery to meet demand peaks means it will likely be fully charged and discharged nearly every day. That puts a lot of strain on lithium batteries, which degrade as they get older and are cycled more often.
Under SDG&E’s contract, AES must maintain the batteries’ nameplate capacity and performance for 10 years, after which the utility takes responsibility for the project. Typically this is done two ways — by oversizing a battery project upfront or by adding new cells during operation to support capacity.
In some small projects, AES may oversize battery facilities to start, Perusse said. But in large-scale projects, “our philosophy is more to be adding than substituting.”
“There’s extra racks that you can populate with additional cells, so the number of batteries at the project will be greater at the end than at the beginning,” he said.