For California to meet its ambitious goals to reduce greenhouse gas emissions, developing more energy storage solutions appears to be an absolute necessity.
On that front, San Diego Gas & Electric is ahead of schedule.
SDG&E has just announced it signed five new contracts for local battery storage facilities totaling 83.5 megawatts.
That number is significant because the California Public Utilities Commission (CPUC) has laid down targets for SDG&E — along with fellow utilities Pacific Gas & Electric and Southern California Edison — to add energy storage projects to their portfolios by the end of 2020.
Pending CPUC approval, SDG&E’s five new contracts will put the investor-owned utility on the cusp of meeting its energy storage mandate with more than three years to spare.
“I’m very pleased with the results of this solicitation and I’m confident we’ll achieve this mandate,” Emily Shults, SDG&E’s vice president of energy procurement, said on Tuesday.
Shults said the utility is asking the commission to approve the contracts by the end of this year.
The CPUC set SDG&E’s energy storage target for 2020 at 165 megawatts in three different areas. The new contracts would put SDG&E over the top in two energy storage domains (transmission and distribution) and just 7.5 megawatts shy in the third (customer or third-party owned).
Shults said the remaining 7.5 megawatts will likely come from commercial and industrial sources.
Pacific Gas & Electric and Southern California Edison were given larger energy storage targets — 580 megawatts each — but also seem to be well on their way to meeting their respective mandates.
PG&E officials said it has 225.3 megawatts of storage either in place or lined up whileEdison reported it has contracts that have 409 megawatts counting toward the target “which is almost double the amount that was installed in the entire nation in 2015.”
Energy storage comes in a variety of forms, ranging from such sources as batteries to pumped hydro, in which water is pumped uphill behind dams and then released, with the ensuing rush of water generating power.
State policymakers want to reduce greenhouse gas emissions to 80 percent below 1990 levels by 2050 and as California keeps integrating more renewable energy sources into its power grid, storage is increasingly seen as a key driver to keep the system operating.
For example, solar power has increased its percentage of in-state electricity generation from 0.4 percent in 2009 to 7.7 percent in 2015, the most recent year tabulated by the California Energy Commission.
But renewable sources have a problem with intermittency — that is, producing power from solar when the sun is not shining or from wind power when the wind isn’t blowing.
Energy storage technologies are designed to smooth out the ebbs and flows, as well as helping the state’s power mix become less reliant on natural gas.
Natural gas makes up 59.9 percent of in-state generation and the shutdown of the Aliso Canyon natural gas storage site in Los Angeles County after the massive methane leak at the facility has raised questions about the durability of the state’s power system.
The chief criticism of energy storage systems centers on cost. Some analysts have estimated the CPUC’s energy storage mandate may come to as much as $3 billion, which will be picked up by utility ratepayers.
Defenders of storage say costs are coming down rapidly. The management consulting firm McKinsey & Company came out with a report last August predicting costs will drop by half by 2020.
Shults would not disclose the cost of the five systems SDG&E contracted last week, citing confidentiality agreements.
All five of the systems use lithium-ion battery technology.
Two of the five facilities will be owned and operated by SDG&E — a 40-megawatt site that will be constructed by AES Energy Storage and a 30-megawatt facility in Miramar to be built by Renewable Energy Systems America.
Three other storage projects totaling 13.5 megawatts will be owned by third parties and constructed in Escondido, Poway and San Juan Capistrano.
SDG&E officials say the new facilities are like having batteries from more than 5,500 all-electric, long-range vehicles at the ready.
The most recent announcement comes less than two months after SDG&E unveiled another energy storage project — a 30-megawatt plant in Escondido that consists of 400,000 batteries. SDG&E partnered with Virginia-based AES Energy Storage on the facility.
Shults said she was not surprised at how fast the company is reaching its storage targets.
“Everybody in the industry is really focused on energy storage as being a solution to deal with renewable integration and bolstering reliability,” she said.
SDG&E Closes in on Energy Storage Goals, by Rob Nikolewski, The San Diego Union-Tribune, April 26, 2017.