California sets 1,325 MW by 2020 target for energy storage

The California Public Utilities Commission (CPUC) on Oct. 17 established an energy storage target of 1,325 MW for Pacific Gas and Electric, Southern California Edison and San Diego Gas & Electric by 2020, with installations required no later than the end of 2024.

The guiding principles of the commission decision are: the optimization of the grid, including peak reduction, contribution to reliability needs, or deferment of transmission and distribution upgrade investments; the integration of renewable energy; and the reduction of greenhouse gas emissions to 80% below 1990 levels by 2050, per California’s goals.

The Oct. 17 decision, under the authority of Assembly Bill 2514, directs the utilities to file separate procurement applications containing a proposal for their first energy storage procurement period by March 1, 2014. The decision further establishes a target for Community Choice Aggregators and electric service providers to procure energy storage equal to 1% of their annual 2020 peak load by 2020 with installation no later than 2024, consistent with the requirements for the utilities.

“This decision represents an important first step in encouraging the storage market and supporting grid reliability,” said Commissioner Carla Peterman, the lead commissioner for this proceeding.

Added Commissioner Mike Florio: “As California looks ahead to meeting needs due to the closure of the San Onofre Nuclear Generating Station and retirement of conventional generation, I look forward to the role that energy storage can begin to play in our mix of resources.”

Southern California Edison earlier this year decided to permanently shut the idled San Onofre nuclear plant (with about 2,150 MW of net capacity), setting off a scramble to replace that capacity in the Los Angeles area over the long term.

Said Commissioner Catherine Sandoval: “Storage is a game-changer that can help people manage their energy use and expand the capacity of renewable resources to provide power to homes and businesses. This decision will spur investment and innovation in energy storage and help Californians unleash their creative and economic power.”

“Energy storage has the potential to be a game changer for our electric grid, and I fully support the goals of grid optimization, integration of renewable energy, and reduction of greenhouse gas emissions,” said Commissioner Mark Ferron. “As the utilities procure storage, we should evaluate the projects on whether or not they fulfill a system need at a reasonable cost.”

Commission decides pumped storage hydro too big to include

The decision cited some example storage projects. For example, for Southern California Edison, it would include the 8 MW Tehachapi Wind Energy Storage Project to be installed in the Tehachapi renewable resource area. For PG&E, it includes the commission-approved power purchase agreement between PG&E and Rice Solar for a solar thermal generation project paired with molten salt storage. For SDG&E, it includes the Borrego Springs microgrid project, undertaken as part of SDG&E’s smart grid deployment plan.

“PG&E requests that, in addition to its power purchase contract with Rice Solar, two existing pilot projects – the Vaca-Dixon Battery Project and the Yerba Buena Battery Project – should count towards its procurement targets once they have transitioned into operations,” the order noted.

Probably the most controversial aspect of what should count against the storage target is whether pumped storage hydro, which is basically an older storage technology, should be included or excluded from the target. Many parties expressed strong views regarding this determination, the order noted.

“We are sympathetic to parties’ arguments that pumped storage complies with storage definitions under AB 2514,” said the Oct. 17 decision. “However, the sheer size of pumped storage projects would dwarf other smaller, emerging technologies; and as such, would inhibit the fulfillment of market transformation goals. The majority of pumped storage projects are 500 MW and over, which means a single project could be used to reach each target within a utility territory. Therefore, we find it is appropriate to exclude large-scale pumped storage projects from the procurement mechanism outlined in this decision.”

The commission is not against pumped storage, it added. “We emphasize that our decision to limit the size of pumped storage projects in the decision is not to discourage large-scale pumped storage projects. On the contrary, these types of projects offer similar benefits as all of the as all of the emerging storage technologies targeted by this program; it is simply their scale that is inappropriate for inclusion here. We strongly encourage the utilities to explore opportunities to partner with developers to install large-scale pumped storage projects where they make sense within the other general procurement efforts underway in the context of the LTPP proceeding or elsewhere. Commission staff shall hold a workshop to further explore the operational characteristics and uses for pumped storage projects. In particular, we encourage the utilities to consider pumped storage projects in all-source solicitations for new resources, and see no reason why the evaluation metrics and protocols developed in the context of the Storage Framework designed in this decision cannot be used as a basis to evaluate pumped storage projects in other proceedings or solicitations.”

There are a lot of pumped storage projects in the works in the region

There are several proposed pumped storage hydro projects in and around California, with the project developers saying they are needed to even out power supply to the grid due to variable output from the increasing number of wind and solar projects in and around the state.

For example:

  • EDF Renewable Energy reported Oct. 11 to the Federal Energy Regulatory Commission that it has taken over sole control of the 1,000-MW Swan Lake North pumped storage hydro project along the California-Oregon line and is now working on a power interconnect deal with PacifiCorp.
  • An affiliate of Hydro Green Energy LLC filed this past summer with FERC for two preliminary permits on pumped storage projects (1,338 MW and 1,270 MW in size) along the California coast that would use seawater as the pumped storage medium.
  • BPUS Generation Development LLC, a subsidiary of Brookfield Renewable Energy Group, told FERC on July 15 that it is making progress on the 280-MW Mulqueeney Ranch Pumped Storage hydro project in California.
  • Eagle Crest Energy is pursuing a FERC approval for the 1,300-MW Eagle Mountain Pumped Storage Hydroelectric Project in California.

The commission in the Oct. 17 decision emphasized that since the objective of AB 2514 is to increase the use of energy storage systems, and not to identify existing energy storage systems, it does not believe it would be reasonable to count projects that were in existence prior to January 2010 towards the procurement targets.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.