Although the two projects’ energy storage capacity in MWh was not revealed, large-scale battery energy storage system (BESS) projects in the state tend to be four-hour systems, especially those delivered by or for California’s three investor-owned utilities: SDG&E, PG&E and SCE.

Four hours is the required duration to provide energy to utilities through long-term agreements through grid operator CAISO’s Resource Adequacy framework. Based on this, the two projects’ combined capacity could be 684MWh.

The projects are the third and fourth large-scale BESS units SDG&E has turned online in recent years, after it commissioned the 30MW Top Gun project in late 2021 and then the 30MW Kearny project late last year, both in San Diego. By the end of 2023, it expects to have 345MW of BESS online, sufficient to meet 15% of customer load on a typical day and 7% on a system peak day.

The projects are part of a fleet of large-BESS in the state which is helping it balance out peaks and troughs in demand, maintain grid flexibility, and move away from fossil fuel resources. California is seeing to become entirely carbon-neutral by 2045.

“With our state experiencing more frequent climate extremes such as record heat waves and droughts, it is essential to invest in innovations like energy storage to make sure we can continue to power the world’s 4th largest economy reliably,” said CAISO President and CEO Elliot Mainzer. “The rapid growth of energy storage in California in recent years gives me optimism about our state’s future and its capacity to respond to climate change.”

Ameresco to deliver 379Mh of BESS for Avenue Capital-owned group

In related news, system integrator Ameresco will deploy four BESS projects co-located with gas power plants owned by Middle River Power (MRP) across California. MRP is an independent power producer (IPP) owned by investment firm Avenue Capital.

The BESS projects will enhance the efficiency of MRP’s natural gas power plants, reducing their emissions and providing capacity to CAISO’s grid. MRP has eight gas plants in California, and ten nationwide.

Construction on the four projects will start this summer and is expected to be completed by Q3 of 2024.

“The energy storage assets allow for the shifting of solar energy from the middle of the day to supply the grid during evening peak hours, while maintaining our natural gas facilities as a flexible, reliable backstop,” said Mark Kubow, CEO of Middle River Power. “We are excited to introduce our first tranche of projects that takes such a meaningful step in helping California in the transition to more renewable resources.”

Legacy power plants make ideal locations for renewable energy and energy storage thanks to their large existing grid infrastructure. This has been particularly seen in the US market, and this week Energy-Storage.news reported on similar plans in Colombia.

Ameresco recently said it would get a three-site project totalling 2.1GWh of BESS capacity for one of the state’s three big IOUs, SCE, to “substantial completion by summer 2023”. The project made headlines last year with Ameresco invoking ‘force majeure’ clauses in its contract, citing the chaotic effect of Covid lockdowns in China on the BESS supply chain.

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By May 2023, this year had already seen more scheduled power cuts than the entirety of 2022, the report said. Deployment of batteries in commercial & industrial (C&I) and residential markets has been growing in South Africa as consumers look to protect themselves from load-shedding, but the report calls for a concerted effort at the national and municipal level for grid-scale energy storage.

“While deployment of batteries at commercial, industrial, and residential sites is accelerating, the rollout is happening in an uncoordinated manner, primarily as a self-funded response to worsening load shedding,” says Richard Halsey, policy advisor at IISD and the lead author of the ‘Watts in Store’ report. “South Africa needs national and municipal grid storage strategies, which will provide a positive signal to the energy storage industry that it can safely develop supply chains.”

The report said that deploying energy storage with solar PV will help in reducing demand for coal supply from Eskom, South Africa’s national grid operator which primarily provides coal-fired generation, as well as optimising the existing grid capacity by decoupling electricity generation and supply times and adding flexibility to the country’s brittle and fragile transmission system.

Peak shaving – where potential excess power supply at off-peak times can be stored and used to lessen the spike in supply needed at peak hours – is another benefit that battery energy storage system (BESS) can provide and would contribute to the general levelling out of Eskom’s grid and create a more stable generation curve.

BESS could also be a cheaper alternative to full-scale grid expansion in the short term, widening the reach of the power network by deploying batteries for use at peak times to areas where costly and time-consuming grid infrastructure is yet to reach.

Pumped hydro is also a part of South Africa’s energy makeup, and the report found that it can play a significant role as a supporting technology to lithium-ion battery storage. It offers longer duration storage but requires a lot of time to build, which precludes it from contributing in the short term.

Ultimately, the report said that grid-scale batteries should be an immediate priority for South Africa. As it stands there is no government energy plan for the future development of energy storage, despite the significant growth of the global market and the almost 80% drop in the cost of lithium-ion batteries since 2013.

The majority of planned grid storage projects are delayed, it said, with deadlines for IRP and Eskom projects extending and finances yet to be secured.

Halsey said: “With the current electricity crisis requiring fast and effective measures, grid batteries can be an important part of the solution.”

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A member of the World Bank Group, this is IFC’s first sustainability-linked loan in Chile’s energy sector and is set to accelerate Engie’s decarbonisation programme in the country.

The financing package consists of US$200 million provided by the IFC; US$114.5 million from investors under IFC’s Managed Co-lending Portfolio Program; and US$35.5 million from ILX Fund, a Sustainable Development Goals (SDG)-focused investor under IFC’s B Loan Program.

IFC is also expecting to close a US$50 million parallel loan in the next few weeks, bringing the financing package to a total of US$400 million.

According to IFC, the loan was structured with the specific objective of decommissioning or converting ENGIE Chile’s remaining coal generation assets.

“IFC is mobilizing the necessary capital for sustainable innovation to promote decarbonization initiatives and adapt to global warming,” said Manuel Reyes-Retana, regional director at IFC.

“Supporting leading companies such as Engie is vital to face the current climate challenges efficiently, and, for us, it is setting a precedent in green and sustainability-linked loans for the energy industry in Chile.”

Rosaline Corinthien, CEO of Engie Chile, added: “We are very happy to have obtained this support from the IFC, a green loan that accounts for the work we do every day hand in hand with caring for people and the environment. Linked to our ESG performance, we have committed with IFC on targets for non-financial indicators on emissions and diversity, two key elements of our corporate strategy. This financing is a fundamental piece to materialize our ambitious investment plan in renewable energies in Chile, and thus continue leading the country’s energy transition.”

The funding package represents IFC broadening its international financing portfolio. Earlier this year the company partnered with fellow development bank AfDB to finance a total of 25MW of co-located energy storage in Malawi and Eritrea.

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San Diego Gas & Electric (SDG&E) has completed two additional utility-owned energy storage facilities totaling 171 MW, enough to power almost 130,000 homes for four hours.

The 131 MW Westside Canal project located in Imperial Valley – home to a high concentration of solar, wind and geothermal generation facilities – is the largest storage asset in SDG&E’s energy storage portfolio; the 40 MW Fallbrook project, located in Northern San Diego County, is the second largest in its portfolio.

By the end of this year, SDG&E’s energy storage portfolio is expected to reach 345 MW of power capacity, sufficient to meet over 15% of its customers’ load on a typical day and 7% on a system peak day. These energy storage assets participate in the energy markets managed by the California Independent System Operator (CAISO), allowing CAISO to store and dispatch clean energy from the facilities to meet electricity demand as needed.

“The beauty of energy storage is it can help California solve two problems simultaneously: It can soak up surplus renewable energy during the day, so solar and wind farms don’t have to cut off production when demand on the grid is low,” says Miguel Romero, SDG&E vice president of energy innovation.

In recent years, as wind and solar generation capacity has soared in California, renewable generation facilities have had to increasingly curtail, or scale back, energy production to keep the grid balanced. At times, California has had to pay neighboring states to take its oversupply of solar energy in order to avoid overloading the grid. 

California has also experienced repeated grid emergencies during record heat waves, which pushed the grid to the brink due to energy demand exceeding supply.

The Westside Canal storage facility consists of more than 800 cubes of stacked lithium-ion batteries that stretch across roughly 16 acres of land. It began commercial operation in June. The Fallbrook energy storage project is also made up of stacks of lithium-ion batteries tightly packed inside metal cubes. It began commercial operation in May. Both facilities are equipped with safety features, remote monitoring and automation technologies. When smoke or other anomalies are detected, the units will automatically shut down.

The completion of these projects follows two other utility-owned storage projects SDG&E has brought online in recent years: the Top Gun Energy Storage Facility (30 MW) in San Diego’s Miramar area and the Kearny Energy Storage Facility (20 MW) in the Kearny Mesa area.

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However, a California Energy Commission (CEC) status report on 23 June said that Hydrostror “….is considering “alternative surface facility configurations,” “cavern engineering options,” and “alternate sites”. The applicant did not provide a definite timeline for selecting a best path forward to ensure a viable project.”

It recommended that CEC staff pause active work on the long duration energy storage (LDES) project until Hydrostor submitted a new project proposal backed up by new reports confirming site viability, and then a week later representatives for the Hydrostor told the CEC:

“In particular, recent geological investigations at a location outside the Application For Certification project site are demonstrating superior geological conditions for the compressed air cavern. Once we have finished evaluating the results, we will be in a position to complete Project Optimization anddocket these results.”

Hydrostor president Jon Norman told Energy-Storage.news that the company expects the CEC permitting process to resume “in the near term as these optimisations are finalised” and that it remains “fully committed to Willow Rock”, in a statement reproduced in full further down this article.

He added that while it continues to target a commercial operation date (COD) in 2028 for the compressed air project, that could change to 2030.

The firm is also developing another project in California, the 400MW/3,200MWh Pechos Energy Storage Center in San Luis Obispo County, as well as the 200MW/1,500MWh Silver City Energy Storage Center in Broken Hill, New South Wales, Australia.

A-CAES has a better round-trip efficiency (RTE) than conventional compressed air energy storage (CAES), with Hydrostor’s CEO Curtis VanWalleghem discussing the tech in an interview on this site at the start of 2022.

The company counts the Canada Pension Plan Investment Board and Goldman Sachs Asset Management amongst its investors.

See the full statement from Hydrostor president Jon Norman provided to Energy-Storage.news below, and its latest response to the CEC in full further down.

Norman: We understand and support the CEC’s decision to pause on their analysis while we continue to perform optimisation activities for the Willow Rock project. This is reasonable and does not impact our commitment to the project or the Kern County community. We expect the CEC permitting to resume in the near term as these optimizations are finalised.

The project is still proceeding. Hydrostor remains fully committed to Willow Rock, and continues to advance key project milestones including the recent signing of the $1B offtake contract with Central Coast Community Energy as well as near-term execution of the project’s interconnection agreement with the California ISO.

Hydrostor has been actively working on project optimisation activities in 2023, which is a normal part of development for this infrastructure.

This includes geological optimisation which has highlighted significant benefits of additional sites for delivery into the Whirlwind Substation in Kern County.

We are exploring a number of locations in Kern County and exploring multiple opportunities and locations in parallel. Hydrostor believes Kern County offers a bright future for energy storage investment.

The benefits of additional sites that Hydrostor already controls further to the east of the current Willow Rock location includes opportunities to potentially reducing the environmental impacts as well as ideal geologic conditions, which will result in improved certainty and potential savings to overall schedule and cost of the project.

Hydrostor continues to target a 2028 COD date, with potential flexibility out to 2030 based on offtaker needs and evolving regulatory requirements.

We have appended our official response to the CEC here for convenience as well.

Read all of the dockets relating to the project on the CEC’s website here.

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Ormat Technologies is known for developing, building, owning and operating geothermal power plants, as well as waste-to-energy facilities. It opened an energy storage division in 2020 following its 2017 acquisition of energy storage company Viridity for US$35 million, targeting what it saw as growth opportunities in the sector and has also added solar PV plants to its portfolio.  

Through a 20-year contract, Ormat will supply the CCA with energy generated from the plant at what it described as “predictable rates” for the load-serving entity’s customers. Arrowleaf will be a 42MW solar PV plant paired with a 35MW/140MWh battery energy storage system (BESS), and is scheduled to begin commercial operations in the first half of 2025.

Ormat did not disclose the BESS technology provider to the project, but said equipment had been purchased at “an attractive purchase price”.

Also helpful to the project’s economics is that Arrowleaf, in California’s Imperial County, is located close to an Ormat geothermal power plant, North Brawley, which was put into service in 2010 with 13MW generation capacity. Arrowleaf will share the geothermal plant’s grid interconnection infrastructure.

“As a result, Ormat can leverage prior investments to seamlessly integrate the solar and storage components into the grid, optimising the overall energy generation and distribution system,” Ormat Technologies CEO Doron Blachar said.

The project is in the service area of utility Imperial Irrigation District, with SDCP, like other CCAs, utilising its host utility’s grid infrastructure while guaranteeing its customers can get a choice of the energy mix they buy their power from.

A few days earlier, on 26 June, Ormat announced that it had completed and brought into commercial operation two standalone BESS projects, one in Texas to compete in the ERCOT market and another in New Jersey, which is participating in the PJM Interconnection market.

The two 1-hour duration BESS facilities total 43MW/43MWh. Upton, in Texas, is 23MW output and 23MW capacity, Andover BESS is 20MW/20MWh. While Upton will participate in ERCOT’s energy and ancillary services markets, Andover will provide ancillary services only to PJM.

The pair are part of a four-project portfolio for the company, with the other two being Bowling Green, a 12MW/12MWh system in Ohio, and the 7MW/7MWh Howell BESS project, also in New Jersey. Those two already went into action earlier this year.

CEO Blachar noted that being able to leverage the investment tax credit (ITC) for standalone energy storage, which was brought in at the beginning of this year in the US Inflation Reduction Act (IRA), would “maximise the economic advantages of these storage assets”.

“This eligibility allows us to claim approximately 30% of the asset value in tax credits, reducing our capital needs and enhancing earnings,” Blachar said.

Ormat targets 500% growth in energy storage business by 2025

Energy storage still remains a relatively small contributor to Ormat’s total revenues: in its Q1 2023 results the company’s adjusted EBITDA from electricity sales, its biggest segment, was US$120.8 million, while for energy storage it was just US$0.8 million.

However, it has stated its aim to become one of the US storage sector’s leaders, with a growth target of between 468% and 502% in megawatts by 2025 in energy storage, while its ambitions for geothermal, a much more difficult sector in which to develop new facilities quickly, is between 21% and 24%.

In late June, Blachar said Ormat was “on track” to achieve its energy storage growth targets, having overcome supply chain challenges and project complexities to meet its desired growth trajectory in the first half of this year.

“We remain on track with our energy storage growth targets, with plans to bring online two additional assets in 2023 and make further progress towards achieving between 500 to 530MW and over 1GWh in total capacity by the end of 2025,” Blachar said following the announcement of the New Jersey and Texas projects coming online.

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As part of President Biden’s Investing in America agenda, the Department of Energy (DOE) has received $45 million, including $18 million from the Bipartisan Infrastructure Law, to support pilot manufacturing of solar components that can contribute to a domestic manufacturing sector.

The funding will also support the development of new dual-use solar technologies, such as agrivoltaics and building-integrated photovoltaics, to create new markets for American products. Revitalizing the domestic manufacturing sector is an essential component of President Biden’s economic strategy and is critical to achieving a clean energy future.

“President Biden’s Investing in America agenda has led to a surge of solar manufacturing announcements and has created thousands of good-paying, union jobs in solar deployment,” says Sec. of Energy Jennifer M. Granholm. “With these innovative, made-in-America technologies, the Biden-Harris Administration is powering the clean energy transition, lowering electricity costs for hardworking Americans and protecting the future for our children from the impacts of the climate crisis.”

Dual-use PV is a type of PV application where PV panels serve another function besides the generation of electricity. Dual-use technology, like agrivoltaics, BIPV, floating PV and vehicle-integrated PV, creates opportunities to develop domestically made products capable of expanding PV markets, as well as reducing reduce greenhouse gas emissions. By integrating solar energy systems into existing landscapes, dual-use PV has the potential to minimize land-use concerns.

There have been 63 domestic manufacturing announcements across the solar supply chain since the beginning of the Biden-Harris Administration, more than 40 of which have occurred since August 2022. Establishing a more diverse set of solar manufacturers in the U.S. creates jobs and spurs economic activity, while also building workforce technical expertise and capability, simplifying shipping and logistics and reducing supply chain insecurity.

The Silicon Solar Manufacturing and Dual-use Photovoltaics Incubator funding opportunity will:

Fund up to 12 projects to help establish a network of manufacturers across the domestic solar supply chain focused on polysilicon production, silicon ingots and wafers, solar cells, glass and other module components, plus associated manufacturing equipment.

Fund projects that will aim to open new markets for the emerging dual-use PV sectors, in particular agrivoltaics, building-integrated PV, floating PV and vehicle-integrated PV.

Create opportunities to develop domestically made products capable of expanding PV markets and reducing greenhouse gas emissions, through dual-use technologies.

Image by Freepik.

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The two projects are Medway Grid Battery Storage, a 250MW/500MWh BESS in development by infrastructure investor and developer Eolian, and Cranberry Point, a 150MW/300MWh facility from developer Plus Power, in the Town of Carver, about 80km from the other project in another town, Medway.

As reported by Energy-Storage.news almost a year ago, the two projects had gone before the Massachusetts Energy Facilities Siting Board (EFSB), requesting special conditions to enable their development despite local authority restrictions.

The projects had fallen victim to a state of regulatory limbo however. The two towns of Medway and Carver had some time before enacted a moratorium on new utility-scale BESS until zoning laws could be updated to adequately encompass the technology set. In Carver’s case, a moratorium on new utility-scale solar PV plants was also put in place in 2022 and drew criticism from the Massachusetts Attorney General’s office, while Medway’s moratorium on energy storage facilities in the town’s Energy Resource zoning district, in place from late 2021, appears to have ended on 30 June this year.

Seeking a ruling that they were in the public interest and could therefore be exempted from moratorium and zoning ordinances, the developers were rebuffed by the EFSB, at which it had to appear since their facilities could be classed as generation assets of 100MW or greater.

The plot thickened as the EFSB ruled, after lengthy deliberation and a period for public comment, that it lacked jurisdiction to make the decisions involved, since energy storage facilities do not generate energy, they store and dispatch it.

The EFSB made its ruling in May, with local news outlet Commonwealth Magazine describing it at the time as a “regulatory black hole,” with the definitional problem leaving them in jeopardy. EFSB members noted that state siting statutes were last updated in 1997, well before the advent of large-scale battery storage on the grid.

As Medway Grid has a contract in place to supply capacity to electric system operator ISO New England that requires the 250MW BESS to be in operation by June 2024, its development team had been concerned about the delay’s impact on its business case.

Projects out of limbo

With ESFB unable to take a further step, the developers’ petitions went up to the DPU. In its 154-page ruling on Medway Grid, and its 145-page ruling on Cranberry Point, the DPU found zoning exemptions would indeed be required for both to go ahead.

Those exemptions were granted, as well as permission to construct associated transmission line infrastructure. The regulator did place various conditions on each, pertaining to areas including construction noise monitoring and environmental assessments, and that both enroll in the Massachusetts Clean Peak Standard programme within 120 days of the start of commercial operation.

The projects still need to clear other necessary approvals, but it appears that they will at least not remain in the state of uncertain deadlock they had been in.

With many local authorities having jurisdiction (AHJs) across the US currently wrestling with questions of energy storage system siting, and many different types of regulator around the world wrestling with the question of how to define energy storage within the energy system, the case looks likely to be followed closely.

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The fund was launched in January with targets of US$1.5 billion and 3.5GW of solar capacity, and NextEnergy has offered investors mid-double digit returns on commitments.

Of the US$480 million secured so far, NextEnergy said that US$330 million are direct commitments and US$150 million are co-investment allocations. Two pension funds, one Nordic and another German, are prominent investors in NPV, with others in the process of due diligence and expected to be confirmed in the second round later this year.

The fund said that it had identified a potential pipeline of 14GW worth of projects across its target areas.

The company has recently targeted energy storage deployments through separate funds, including in Greece and the UK through a partnership with developer Eelpower.

Michael Bonte-Friedheim, CEO and founding partner of NextEnergy Group, said: “NPV ESG’s first close represents an important milestone as the fund secures strong investor support from the get-go. Utility-scale solar represents a very large investment opportunity set globally, with total spending in 2023 forecast to reach US$382bn, and we aim to continue our leadership role in the sector.

“We leverage our focus, experience and expertise in the solar infrastructure sector to secure and invest in attractive solar projects and portfolios and generate superior investor outcomes.”

The previous iteration of the funding vehicle, NPIII ESG, closed in January last year with US$900 million in final investment and a UK-focused round called NextPower UK ESG fund secured commitments 20% in excess of its £500 million (US$635 million) target.

To read the full version of this story visit PV Tech.

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Hithium is a lithium-ion battery manufacturer which produces cells for the battery energy storage system (BESS) sector, whereas most manufacturers primarily cater the comparatively larger EV market.

Participants in the capital raise was led by the private equity investment arm of state-owned China Life Insurance and Beijing Financial Street (BFS) Capital, also a state-backed vehicle. Other participating investors were BOC Financial Asset Investment, Goldstone Investment, CS Capital, China Venture Capital Fund (CVC), CICC Capital, CDH Investments, and China-U.S. Green Fund.

CDI New Energy Investment (Shenzhen) and Hefei Innovation Scitech Venture Capital also took part, while existing shareholders Hainan Fenghe Private Equity Management, Matrix, ABC International, and ZBGT put funds in too.

The firm says it has a leading position in the Chinese BESS market and plans to expand its manufacturing capacity from 70GWh at the end of this year to 135GWh by 2025, it recently wrote on our site announcing a push into the European market.

Energy-Storage.news’ publisher Solar Media will host the 1st Energy Storage Summit Asia, 11-12 July 2023 in Singapore. The event will help give clarity on this nascent, yet quickly growing market, bringing together a community of credible independent generators, policymakers, banks, funds, off-takers and technology providers. For more information, go to the website.

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