In California, heat waves are pushing peak electricity demand to new highs. Most new capacity is solar and wind, adding to intermittency. Millions of EVs on the road are adding to the challenge in this state of 40 million, where over 20% of new car sales are electric. It makes sense that California is one of the world’s leaders in bringing utility-scale lithium battery storage online.Â
California has almost 4 GW of pumped hydro and estimates exceeding 7 GW of battery storage, most of which can be dispatched at peak hours. Exact numbers are difficult because California has such a wide-array of front-of-the-meter (FTM) and behind-the-meter (BTM) storage in operation.
This article looks at battery storage in operation at three large investor-owned utilities.
Southern California Edison (SCE)
SCE delivers electricity to 15 million people in its vast 50,000 square-mile service area in Southern California. SCE delivers electricity, not gas, as investor-owner utility that is part of Edison International. For decades, SCE has benefitted from over 1,000 MW of pumped hydro. Starting in 2015, SCE got serious about contracting for a wide-range of additional storage solutions.
SCE deserves admiration for pioneering the use of renewables, demand management, and intelligent battery energy storage systems (BESS) to replace old power plants and peakers. SCE meets growing demand for electricity even as it shuttered two large nuclear plants and navigated the massive the Aliso Canyon natural gas storage failure of a supplier. Ten years ago, SCE issued an all-source procurement for its capacity needs, and considered hundreds of alternatives including natural gas, renewables, and many forms of storage. Many contracts were signed.
AES proposed the Alamitos BESS, the largest grid-scale energy storage project in the industry at the time. SCE boldly recognized the potential of large grid-scale energy storage and awarded AES a 20-year power purchase agreement (PPA) to provide 100MW/400 MWh of energy storage using a Fluence integrated system of lithium batteries, electronics, and advanced software. Then, Fluence was an AES/Siemens joint-venture. Now Fluence is a public company.
A growing number of companies provide advanced storage management software with AI enhancements for FTM, BTM, or both. These are some:
Fluence
Stem
Tesla
Schneider
Samsung
Engie
SolarEdge
Sonnie
SCE’s willingness to pioneer and its ability to overcome obstacles has been impressive, but not problem free. In 2021, SCE contracted with Ameresco for 537MW/2,150GWh. After years of delays, supply chain issues, and Ameresco’s exercise of force majeure, the project is still not complete. As of this writing, SCE may withhold liquidated damages.
As Los Angeles prepares to host the 2028 Summer Olympics, all forms of transportation are being electrified from cars to buses to light-rail to drones to small planes. Over 20% of new car sales are 100% electric. SCE has over 40,000 EV chargers in its service area, potentially demanding more generation, but also creating the opportunity to shift charging to off-peak. There is also a long-term potential for vehicle-to-everything (V2X).
Approximately 80% of the electricity delivered to SCE customers is now generated by independent power producers. SCE plans to invest approximately $6 billion annually in grid improvements, including storage, as SCE transitions from large water-thirsty polluting plants to being a distributed systems operator (DSO) of distributed generation resources (DER) such as solar, energy storage, efficiency, and demand response. In the past, its grid was a one-way flow of electricity from large power plants. In the future, it will be more like the internet cloud, facilitating a two-way flow from wind, solar, and storage. SCE is investing billions in the transformation.
Pacific Gas and Electric (PG&E)
The company provides natural gas and electric service to 16 million people throughout a 70,000-square-mile service area in northern and central California.
Moss Landing Energy Storage Facility has a massive 750MW/3,000MWh of capacity - more than many power plants; more than a dozen peakers. The facility is owned by Vistra Energy, operating under a 15-year resource adequacy agreement with PG&E. Hundreds of Tesla Megapacks are at the heart of the facility.Â
Beyond batteries, Moss Landing has intelligent storage. Using artificial intelligence, advanced price forecasting, portfolio optimization and market bidding algorithms, the software provides optimal participation in the California Independent System Operator (CAISO) wholesale market. Throughout California, 4-hour lithium battery storage coupled with AI-enhanced software provides the ability for a storage project to participate in multiple income streams from CAISO and from the utilities.Â
The benefits of Moss Landing far outweigh any challenges. In 2022 a Tesla Megapack at the facility caught fire. There were no injuries, but there was a closure of busy California Highway 1.
Since this incident, the storage facility is in regular use. Capacity has expanded. The site has room to be expanded to 1,500MW/6,000MWh. In total, PG&E is on track to add about 700 MW of intelligent battery storage annually.
San Diego Gas and Electric (SDGE)
SDGE distributes energy service to 3.7 million people through 1.5 million electric meters and 905,000 natural gas meters in 4,100 square miles in San Diego and southern Orange counties. SDGE is a Sempra utility.
SDGE has 21 BESS and microgrid sites in operation with 335 MW of utility-owned storage. SDGE locates many BESS projects adjacent to existing substations. In addition to supporting grid reliability, most can be dispatched for four hours during peak hours.Â
Westside Canal is an example of the type of large BESS that SDGE continues to deploy. The lithium-battery system has 131MW/524MWh of storage. It was commissioned May 2023.
West Canal participates in CAISO Resource Adequacy framework
Gateway is another large system, with 250MW/1,000MWh of capacity. Storage projects do not always help in times of emergency, sometimes they are the cause of the emergency. On May 15, 2024, a fire erupted at Gateway in the Otay Mesa industrial park, the result of thermal runaway, a risk of lithium batteries. Rob Nikolewski provides excellent reporting about the 17-day fire and its potential impacts. As of this writing, Gateway Energy Storage is still offline.Â
Storage systems, like power plants and larger T&D projects, can face obstacles, delays, and downtime. With their hours of added electricity during peak hours and multiple income streams, SDGE continues to expand. Another seven projects are under development, targeting an additional 50 MW. SDGE has used a diversity of storage technology including lithium-ion manganese, lithium-ion phosphate, vanadium redox flow, iron-salt flow batteries and hydrogen. SDGE BESS
From a Pumped Legacy to a Multi-Storage Future
During heatwaves, California has already been rescued with up to 3 GW of battery-storage being dispatched during critical hours.Â
Globally, utilities are benefitting from a rapid expansion of battery storage and falling lithium prices. BloombergNEF measured 45GW of battery storage installation in 2023, and projects 137GW annually by 2030.
Innovation continues. Currently, most popular are 4-hour lithium battery storage coupled with AI-enhanced software that provides the ability for a storage project to participate in multiple income streams from CAISO and from the utilities. For the future, a variety of startups and pilots are targeting Long Duration Energy Storage (LDES) with flow-batteries, other battery chemistries, hydrogen, thermal, and mechanical systems.
California is on a path to having 10 million electric vehicles, from cars, to trucks, to specialized vehicles, to buses, to rail. Many are already following incentives to charge off-peak, including this author that programs his Tesla to start charging at 9 pm. There is great storage potential in V2X.
Massive microgrids are already in daily use from some Tesla Supercharging stations, to US Marine Corp bases, to University of California campuses. Many use innovative combinations of solar, storage, and fuel cells.
By 2030, Virtual Power Plants (VPP) could reduce US peak demand by 60 GW;Â 200 GW by 2050. By avoiding generation buildout, decreasing wholesale energy costs, and deferring transmission and distribution investments, VPPs can help reduce annual power sector expenditure by $17 billion in 2030 according to this RMI report.
In the years ahead, we will all learn from California as it adds to Solar + Storage + Software + Smart Grid.
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