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San José Clean Energy and Terra-Gen Ink Two Long-term Agreements for New Renewable Energy Resources

More than 162 MW of solar plus battery storage will be added to the California grid, helping San José meet its climate goals and increasing renewable energy consumption during more hours of the day 

SAN JOSE, Calif. April 30, 2020 – San José Clean Energy (SJCE) and developer Terra-Gen have signed two long-term power purchase agreements (PPAs) that will provide San José with 162 megawatts (MW) of new renewable energy. Both projects will be built in Kern County, California with union labor.

  • 15-year PPA for 100 MW of new solar energy, expected to reach commercial operation by the end of 2022.
  • 12-year PPA for 62 MW of new renewable energy that will be provided in a unique format: guaranteed delivery of 62 MW of renewable energy between 6:00 a.m. and 10:00 p.m. every day. To meet this obligation, Terra-Gen will build more than 100 MW of new solar energy and new battery storage. This project is expected to reach commercial operation by the end of 2021.

The innovative 12-year PPA will help reduce reliance on local natural gas plants by providing renewable energy in the late afternoon and evening hours, when demand for electricity is high but renewable energy availability is low. This in turn will help decrease asthma and other respiratory issues.

“SJCE’s latest investments in renewable energy will produce enough clean electricity to power nearly 79,000 homes each year—the same impact as taking 1.3 million cars off the road,” said Mayor Sam Liccardo. “Increasing the amount of renewable energy in our power supply will bring us closer to meeting our aggressive Climate Smart San José goals—providing a livable planet for future generations.”

As the city’s Community Choice Aggregator (CCA), SJCE provides electricity generation service for more than 328,000 residential and business customers, with a high participation rate of 98.2%. SJCE’s default power mix, GreenSource, is sourced 45% from renewable energy, 6% more than PG&E’s standard mix, at rates 1% lower than PG&E.

“Firm delivery of cost-effective renewable electricity is critical as we transition to a renewable energy future,” said Lori Mitchell, Director of San José’s Community Energy Department, which operates SJCE. “Innovative projects like these save our community money and get us closer to our goal of providing more renewable energy during all hours of the day to ensure reliability.”

“Terra-Gen is pleased to collaborate with SJCE to create a more flexible and reliable grid and help them meet their customers’ request for reliable, clean, and renewable electricity,” said Jim Pagano, CEO of Terra-Gen.

“The average total cost to build and operate renewables is now typically lower than fossil fuels,” said Jeanne Solé, SJCE Deputy Director of Power Resources Management. “The competitive pricing we’ve secured for our PPAs will lower operational costs and allow us to provide cost effective electricity to our customers. During this public health crisis, where residential usage has increased, it is more important than ever to lower electricity costs for customers.”

SJCE launched service to most residents and businesses in San José in February 2019. In just over a year, SJCE has made significant investments in renewable energy to serve the community. In August, SJCE signed a long-term PPA with EDP Renewables for 100 MW of new solar energy and 10 MW of battery storage. These new agreements with Terra-Gen are an important step to meeting customer demand for renewable energy.

SJCE customers can elect to receive 100% renewable energy with SJCE’s TotalGreen service. Nearly 1,400 residential and commercial customers have chosen TotalGreen, including large customers Samsung Semiconductor, eBay, and HPE and small businesses Dogtopia, Aqua Lab Aquaria, and Schnitzer Steel Industries.

Increasing the amount of renewable and carbon-free energy powering San José is a key component of Climate Smart San José, the city’s climate action plan. A central goal of the plan is to provide San José with carbon-neutral power by 2021 and 100% renewable power by 2050.

SJCE joins East Bay Community Energy (EBCE), another local CCA, in contracting for new solar energy in Kern County with Terra-Gen. Collaborating on power purchase agreements creates planning and economic efficiencies. CCAs are driving California’s clean energy future: in total, the CCAs have plans to contract for more than 10,000 MW of new renewable resources by 2030.

 

About the City of San José

With more than one million residents, San José is one of the most diverse large cities in the United States and is Northern California’s largest city and the 10th largest city in the nation. San José’s transformation into a global innovation center has resulted in one of the largest concentrations of technology companies and expertise in the world. In 2011, the City adopted Envision San José 2040, a long-term growth plan that sets forth a vision and a comprehensive road map to guide the City’s anticipated growth through the year 2040.

 

About the Community Energy Department

San José Clean Energy is the new electricity generation service provider for residents and businesses in the City of San José, operated by the City’s Community Energy Department. Governed by the City Council, it provides over 328,000 residential and commercial electricity customers with cleaner, lower carbon power options at competitive prices, from sources like solar, wind and hydropower. For more information, please visit www.SanJoseCleanEnergy.org.

 

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Vistra’s Oakland Battery Will Have Two Customers, Suggesting New Path for Storage Market

Utility PG&E finalized its contract with a battery project slated to displace a jet-fuel-burning power plant in downtown Oakland, California.

The Oakland Clean Energy Initiative models a pathway for removing decades-old power plants in dense urban settings while keeping the lights on with new lithium-ion batteries. But the project’s collaborative business model also makes it potentially groundbreaking for energy storage development, by formalizing the use of the battery for discrete grid services on behalf of two different clients.

PG&E, which is working to emerge from bankruptcy by the end of June, has experience building batteries and contracting with third parties for the use of their batteries. Battery owners often contract services to an offtaker while playing in merchant markets themselves. But the Oakland project marks a new foray into an owner sharing a front-of-meter battery plant with multiple customers.

Independent power producer Vistra Energy, which owns the 165-megawatt jet-fueled plant in question, signed a deal with PG&E to build a 36.25-megawatt/145-megawatt-hour battery at the existing site in Jack London Square. The facility will provide “local area reliability service,” helping the utility with its job of transmitting power to residents in Oakland. Doing so avoids a far costlier investment, like running new wires over the hills from the Moraga substation.

Click here for full article.

Vistra’s Oakland Battery Will Have Two Customers, Suggesting New Path for Storage Market, by Julian Spector, Greentech Media, April 17, 2020.

Hawaiian Electric Announces ‘Mind-Blowing’ Solar-Plus-Storage Contracts

This week Hawaiian Electric Company sent seven new solar-plus-storage contracts to state regulators. Six come in at record-low prices for the state, under 10 cents per kilowatt-hour.

The projects, which now await regulatory approval, would add 262 megawatts of solar and 1,048 megawatt-hours of storage distributed over three islands. The company said the projects will provide power “in place of volatile prices of fossil fuels,” which it quotes at about 15 cents per kilowatt-hour.

AES, Innergex, Clearway and 174 Power Global are developing the projects.

Source: Hawaiian Electric Industries

Both the pricing and the size of the contracts are significant.

“It’s hard to overstate the scale of this announcement,” said Dan Finn-Foley, a senior energy storage analyst at Wood Mackenzie Power & Renewables.

If the state’s public utility commission approves the power-purchase agreement contracts, it would mean a big boost for the U.S. storage market. WoodMac currently logs 1.4 gigawatt-hours of energy storage installed in the nation, with just 75 megawatt-hours in Hawaii. According to Finn-Foley, Hawaiian Electric’s projects would nearly double what’s installed in the U.S. and grow Hawaii’s market exponentially. Taken together, the projects would also rank as the second-largest storage announcement ever, just behind the recently approved Moss Landing project in California.

But that’s not even the most thrilling part of this announcement for clean energy analysts.

“What’s even more notable is the range of PPA prices,” said Finn-Foley.

Past solar-plus-storage prices in Hawaii came in at 13.9 cents per kilowatt-hour in 2016 and 11 cents per kilowatt-hour in 2017. One of the projects announced this week by Hawaiian Electric is more expensive than the latter price — 15 megawatts of solar and 60 megawatt-hours of storage at 12 cents per kilowatt-hour. But another 90 megawatts of solar and 360 megawatt-hours of storage came in at what Finn-Foley called a “jaw-dropping” 8 cents per kilowatt-hour. That means that from 2016 to 2019 solar-plus-storage PPA prices in the state dropped by 42 percent.

Will Giese, executive director at Hawaii’s Solar Energy Association, called the pricing “mind-blowing.”

“With prices like these, it’s easy to understand the confidence of Hawaiian electric providers that their islands can hit 100 percent renewables ahead of the 2045 mandate,” said Finn-Foley.

Though Hawaii still relies mostly on oil for electricity, it’s gaining on its goal to reach 100 percent renewables by 2045. In a statement released before the new year, Hawaiian Electric President and CEO Alan Oshima said that in 2018 the company made significant progress in pursuit of that target.

“We have tremendous momentum as we move into 2019,” said Oshima. The contracts out this week suggest that momentum is already gaining speed.

According to Hawaiian Electric’s latest numbers, oil supplied between 58.52 percent and 79.02 percent of electricity in 2017, depending on the utility (Hawaiian Electric also includes subsidiary utilities Maui Electric and Hawaii Electric Light). But that same year, average generation from renewables for all three utilities increased to 27 percent, up 1 percent over the previous year.

On Hawaii Island, renewable generation reached 57 percent. Hawaiian Electric is currently updating its numbers for 2018, but spokesperson Peter Rosegg said the volcanic eruption on Hawaii Island — which took out a 38-megawatt geothermal plant — means its renewable portfolio standard will be relatively unchanged. The company said it’s still on track to reach its RPS milestone of 30 percent by 2020.

If the projects are approved, Hawaiian Electric said they will also help double current reductions in oil demand, with reductions totaling about 100 million gallons below 2008 levels.

Aside from the impact the contracts could have on Hawaii’s electricity landscape, WoodMac’s head of storage research Ravi Manghani said the unique PPA structures tied to some of the contracts signal overall trends for the storage industry.

AES’s 25-year, 30-megawatt solar and 120-megawatt-hour storage PPA, for instance, uses a monthly “lump sum payment” to the developer based on net energy potential and facility availability, rather than energy delivered.

“This will certainly start to become more mainstay for solar-plus-storage PPAs going forward,” said Manghani. “This reduces the curtailment risk for the developer, which is non-trivial in a market such as Hawaii, but also provides the utility a means to operate the combined solar-plus-storage asset almost like a dispatchable traditional asset in a cost-effective way.”

Marco Mangelsdorf of Hawaii’s ProVision Solar said the announcement indicates the state is on the path to achieving dispatchability for solar-plus-storage, with projects able to provide essential grid services and grid support to the electric utility.

“The grand takeaway for me is utility solar-plus-storage is hitting price points that we’ve been hoping and waiting for a number of years to make utility-scale solar-plus-storage competitive, and then some, with other forms of power generation,” he said. “We in Hawaii are on the cutting edge.”

 

Hawaiian Electric Announces ‘Mind-Blowing’ Solar-Plus-Storage Contracts, by Emma Foehringer Merchant, Greentech Media, January 4, 2019.

SV Clean Energy Signs Major Contracts for California’s Largest Solar-Plus-Storage Projects

Sunnyvale, Calif. – Silicon Valley Clean Energy (SVCE) signed two long-term agreements for the largest utility-scale, solar-plus-storage projects to be built in California. The two projects will provide 153 megawatts (MW) of solar and 47 MW of storage and will be developed by Electricité de France (EDF) and Recurrent Energy Development Holdings, LLC. (Recurrent). These projects will come online in 2021 and will harness enough energy to power 39,000 homes annually.

Image from Silicon Valley Clean Energy

Building storage in addition to solar turns the sun’s energy into a resource that can be used on demand, rather than only when the sun is shining. These projects will combine solar panels with large batteries to store energy that the sun produces during the day so that more clean energy can be discharged onto the grid during times of high energy usage in the evening.

“As a Community Choice Energy agency, we’re proud to partner on these groundbreaking developments that not only increase the long-term supply of renewables to our customers, but also make the electricity grid cleaner,” says Courtenay Corrigan, SVCE Board Chair. “These projects show our maturity as an agency, our financial strength and our continued commitment to decarbonization.”

“We are excited to help California lead the transition to clean, reliable and flexible energy,” said Girish Balachandran, CEO of Silicon Valley Clean Energy. “These new renewable energy projects are a significant investment towards reaching our state’s carbon-free energy goals and contribute to solving the state’s grid integration problem by investing in large grid-scale energy storage.”

The contracts are the result of a competitive bidding process that began in September 2017. SVCE’s collaboration with its neighboring Community Choice Energy agency, Monterey Bay Community Power (MBCP) took advantage of economies of scale for the combined four counties, allowing for more purchasing power to invest in these long-term agreements. The two agencies issued a joint RFO which received over 80 offers for new projects that were in various stages of development. The overwhelming response represents the vast amount of interest in new renewable energy development that continues to grow.

The RE Slate 1 project, developed by Recurrent, will be built in Kings County and will provide 150 megawatts (MW) of solar capacity, plus 45 MW of storage, for a 15-year agreement. The BigBeau Solar project, developed by EDF, will be built in Kern County, providing 128 MW of solar capacity and 40 MW of storage and is a 20-year agreement. These projects will support approximately 840 jobs during construction. SVCE will receive 55% of the output, and MBCP will receive 45%.

SVCE signed long-term power purchase agreements with each development, ensuring that customers will be receiving clean power from California renewables for years to come.

About Silicon Valley Clean Energy

Silicon Valley Clean Energy is a community-owned agency serving the majority of Santa Clara County communities, acquiring clean, carbon-free electricity on behalf of more than 270,000 residential and commercial customers. As a public agency, net revenues are returned to the community to keep rates low and promote clean energy programs. Member jurisdictions include Campbell, Cupertino, Gilroy, Los Altos, Los Altos Hills, Los Gatos, Milpitas, Monte Sereno, Morgan Hill, Mountain View, Saratoga, Sunnyvale and unincorporated Santa Clara County. SVCE is guided by a Board of Directors, which is comprised of a representative from the governing body of each member community. For more information, please visit SVCleanEnergy.org.

Media Contact:
Pamela Leonard
Communications Manager
pamela.leonard@svcleanenergy.org
(408)721-5301 x1004