AltaGas Ltd., (TSX: ALA) said in its Oct. 20 quarterly earnings report that it is still working on an expansion of its Blythe Energy Center in California, plus adding a 20-MW battery storage project in that same state.
The existing Blythe Facility, and the planned Blythe II Facility (called the Sonoran project), are well situated to serve a larger western regional transmission organization comprised of several western U.S. states. AltaGas expects several request for proposals (RFPs) to emerge from these states throughout 2017 and beyond, and expects to bid both the potential re-contracting of its Blythe Facility after its PPA expires July 31, 2020, and the potential Sonoran Facility, into these upcoming RFPs.
Separately, AltaGas continues to have bilateral discussions with utilities, municipalities, and corporations for multi-year capacity agreements, while also considering Resource Adequacy market pricing, potential energy and ancillary service offerings, and alternative configurations (gas, combined with solar and energy storage) for the Blythe facilities using the multiple transmission options available to best serve potential customers in the west. It is expected that up to 15,000 MW will need to be replaced in California due to retirements over the next decade. As utilities, non-utilities and large generators evaluate heir future resource needs to achieve California’s 50% renewable portfolio standard, sufficient flexible, fast ramping gas-fired capability will be required to help backstop intermittent, non-dispatchable, low capacity factor renewable energy sources and meet peak load requirements.
In August 2016, AltaGas, through its subsidiary, AltaGas Pomona Energy Storage Inc., signed a 10-year Energy Storage Agreement (ESA) with Southern California Edison (SCE) for 20 MW of energy storage at the existing Pomona facility, located in the east Los Angeles Basin of Southern California. AltaGas will build, own and operate the Pomona Energy Storage Project, which is expected to cost between US$40 million to US$45 million and will be among the largest battery storage projects in North America when it comes on-line as anticipated by the end of December 2016.
Under the terms of the ESA, AltaGas will provide SCE with 20 MW of resource adequacy capacity for a continuous four-hour period, which represents the equivalent of 80 MWh of energy discharging capacity. AltaGas will receive fixed monthly resource adequacy payments under the ESA and will retain the rights to earn additional revenue from the energy and ancillary services provided by the lithium-ion batteries.
In conjunction with the ESA, AltaGas isaid it s working with Greensmith Energy Management Systems Inc., a leading provider of energy storage software and integration services, to provide and integrate its software control platform in addition to the batteries and power conversion technology. AltaGas will retain control for the overall project management, execution and operations.
AltaGas is also continuing to work on repowering the existing Pomona facility. In the first quarter of 2016, AltaGas, through its subsidiary AltaGas Pomona Energy Inc., submitted an application with the California Energy Commission to repower the Pomona facility to a flexible, fast ramping peaking facility under the small power plant exemption process. The application review process is expected to take approximately 12 months and include a review of the emissions profile by the local air district. The existing Pomona facility is a 44.5 MW gas-fired peaking plant strategically located in the east Los Angeles Basin load pocket. The repowered facility could be comprised of more efficient gas-fired technology with capacity of up to 100 MW. Following approval, AltaGas said it will be ready to bid the proposed repowered facility into upcoming RFPs or enter into other bilateral contract arrangements.