A long-awaited energy revolution is beginning to take shape in the vast open deserts of Southern California.
Riverside County is already home to four sprawling solar power plants, stretching across thousands of acres of desert between Palm Springs and the Arizona border. Now three developers have proposed building solar plants with built-in battery storage — meaning they could store electricity generated during the day and sell it to customers after dark.
The idea of pairing solar panels with energy storage isn’t new. But as lithium-ion batteries get cheaper, dreams and reality are converging. A report released last month by the research firm Bloomberg New Energy Finance found that in parts of the Southwest, energy from a new solar-plus-storage project is now cheaper than energy from a new gas-burning power plant. As battery costs continue to fall, it’s getting easier for solar to displace gas and coal, the fossil fuels typically used to generate electricity.
“It’s not a simple, ‘Oh yeah, it makes sense to add batteries in every single solar project,'” said Yayoi Sekine, a co-author of the Bloomberg New Energy Finance report. “But what’s happening in the Southwest — and I think we’re going to see this trend more broadly in other markets later — is there’s value that batteries can add.”
A handful of solar-plus-storage projects have made headlines over the past year. The utility company Arizona Public Service agreed to buy a 50-megawatt battery, which will store electricity for evening use from a 65-megawatt solar farm. Hawaiian Electric Company contracted for a 20-megawatt battery to support a 20-megawatt solar plant. In Colorado, the utility Xcel Energy received record-low bids for solar-plus-storage plants.
But what’s being contemplated on public lands in the California desert is bigger.
Recurrent Energy, based in San Francisco, wants to build a 350-megawatt desert solar farm with up to 350 megawatts of energy storage. The Arizona-based developer First Solar is planning a 450-megawatt solar farm, with a still-undetermined amount of storage. And San Diego-based EDF Renewable Energy recently announced a contract that involves 70 megawatts of solar power and 35 megawatts of storage.
None of the projects is expected to come online for at least two years. But they send a clear message about where the energy market is headed. California got 32 percent of its electricity from renewable resources including solar and wind last year, not counting energy generated by rooftop solar panels. Batteries could help address the challenge of solar and wind farms not always being able to generate electricity when it’s needed.
Recurrent Energy’s Crimson solar project would be built on federal lands south of Interstate 10 in eastern Riverside County. Mike Toomey, the company’s development director, said it’s not clear if demand will materialize for 350 megawatts of storage. But there may be more than enough demand — and Recurrent wants to be prepared.
“We’re making sure that we can fully respond to whatever the market demands might be in the future,” Toomey said. “It is primarily driven by what a customer’s looking for.”
There are plenty of electricity customers in California, and plenty of reasons they might buy solar power after the sun goes down. The average cost of electricity from a big solar or wind farm was on par with electricity from a gas-fired power plant last year, according to the investment bank Lazard. And lithium-ion battery costs have fallen 79 percent since 2010, according to a report this year from Bloomberg New Energy Finance.
California Gov. Jerry Brown, meanwhile, signed a bill in September requiring the state to get 100 percent of its electricity from climate-friendly sources by 2045 — the latest in a series of clean energy bills designed to bring solar and wind power into the mainstream.
Not all of that clean electricity will come from solar and wind. Geothermal power plants that generate energy around the clock are also an option, as are hydropower plants. But a lot more batteries will almost certainly be needed to support new solar and wind farms.
“We all acknowledge that, over time, storage will be a critically important portion of the electricity system,” said Eran Mahrer, vice president for markets and government affairs at First Solar. “When specifically that will occur has a lot of variables associated with it.”
In the short term, a key driver of the energy storage market is a 30 percent federal tax credit for solar investments. Developers who integrate batteries into their solar projects can take the tax credit on their entire investment, including the cost of the batteries. The 30 percent tax credit will begin phasing down after 2019, creating a strong incentive for developers like First Solar to start construction on their projects by the end of 2019.
But even after the tax credit drops, the economics of solar plus storage will still compare favorably to new gas plants in the Southwest, Bloomberg New Energy Finance predicts. Sekine, the Bloomberg analyst, said many solar-plus-storage plants will probably be built outside the handful of western states where the technology is now being pioneered.
“Solar and storage has become almost a new frontier,” Sekine said.
First Solar executives say batteries are just part of the story about solar’s future.
First Solar’s 450-megawatt Desert Quartzite project would be the fourth big solar farm the company has built in Riverside County, and potentially its first with storage. The federal Bureau of Land Management released a draft environmental impact report for Desert Quartzite in August, and is accepting public comments through November 8.
The developer also sees growing opportunities for solar power that don’t involve batteries. First Solar worked with the National Renewable Energy Laboratory and the California power grid operator on a groundbreaking report, released last year, which found that a solar plant can do many of the same things a traditional fossil fuel plant can do to keep reliable electricity flowing through the power grid — even without batteries.
The report was based on tests conducted at a First Solar facility in California, and showed that solar plants can quickly increase or decrease their output to respond to energy demand on the grid, at least while the sun is shining. Such “ancillary services” are critical to providing reliable power and avoiding blackouts. They’ve largely been the domain of coal and gas plants for decades, but the new report presents evidence solar plants can do the job, too.
“It’s a very big deal, in that now we’re obviously excited that renewables can provide some of these services,” the report’s lead author, Clyde Loutan, told The Desert Sun in February 2017. Loutan is a senior advisor for renewable energy integration at the California Independent System Operator, which oversees the power grid for most of the state.
Mahrer, the First Solar executive, said he anticipates rising demand for ancillary services as the solar industry grows its market share, and as utilities and regulators look for new and creative ways to add more renewable energy to the grid. Batteries will be another solution, but they create additional costs, and they may not be needed in every situation.
Mahrer also said he doesn’t want the solar industry to “fall into the same pitfalls that we fell into 10, 15 years ago,” when “entire states and regions of the country” decided not to buy solar power yet because they expected costs to continue to fall. That wait-and-see attitude delayed the growth of solar power, Mahrer said, and he’s worried the same thing could happen with batteries, which are seeing similar cost declines today. Even if batteries are cheaper in a few years, the energy industry needs to start experimenting with the technology and learning the full extent of its capabilities now, Mahrer said.
“The (solar plus storage) plant we build today won’t be the most economic plant on the grid 10 years from now,” he said. “And I don’t think that matters.”
Sammy Roth writes about energy and the environment for The Desert Sun. He can be reached at firstname.lastname@example.org, (760) 778-4622 and @Sammy_Roth.
The solar industry approaches a ‘new frontier’ in the California desert, by Sammy Roth, Desert Sun, October 4, 2018.