Big things are happening in California this week. In the political sphere, Gov. Gavin Newsom is invoking the powers of a “nation-state” to provide lifesaving medical supplies that the federal government isn’t. In the power sector, another 100-megawatt battery just got contracted to support the grid near Los Angeles. 

Clean Power Alliance, a local power purchasing authority, or “community-choice aggregator,” for 1 million customer accounts in the greater L.A. region, signed the deal with independent power producer sPower Thursday. The signing ceremony took place over a GoToMeeting video chat, because it’s April 2020.

This marks the first battery deal for Clean Power Alliance. It’s also the first time a CCA, a relatively new structure in the California power scene, has entered the rarefied “100 Megawatt Club.” That’s equivalent to the largest battery in the world by megawatt capacity — the Tesla-supplied Hornsdale plant in South Australia — though Clean Power Alliance's project will have a considerably longer duration at 400 megawatt-hours. 

SPower will own and operate the Luna Storage facility. It will build the $100 million project with union labor in Lancaster, at the northern edge of Los Angeles County, a little over an hour's drive from downtown L.A. (in the rare event that the 101 and the 5 have emptied due to a general cessation of civic life).

Even larger power producer AES acquired sPower, in partnership with the Alberta Investment Management Corporation, for $853 million in 2017. SPower operates independently, but the project mirrors an earlier effort by its corporate parent: AES became the first to contract a battery of this size when utility Southern California Edison awarded it the Alamitos contract in 2014.

Also this week, the California Choice Energy Authority, a consortium of five community-choice aggregators, signed a deal with developer esVolta to build the 15-megawatt/60-megawatt-hour Black Walnut Energy Storage project in Santa Paula.

Big battery hot spot

Southern California's grid has become a hot spot for very large batteries stepping in to provide grid capacity. The region holds considerable amounts of renewable energy production but also a large number of coastal gas plants that face impending retirement due to an environmental regulation.

Instead of replacing the old gas plants with new ones, some communities have opted for battery plants, which provide local capacity without any local pollution or emissions. The city of Oxnard in Ventura County (an area served by the Clean Power Alliance) pulled that off, getting NRG’s Puente plant canceled in favor of a portfolio of battery projects.

The site selection in Lancaster plays a different role: It’s adjacent to the Antelope Valley substation, surrounded by solar and wind projects, Natasha Keefer, director of planning and procurement for Clean Power Alliance, said in an interview. The organization is dedicated to expanding clean energy, and it hopes to use the battery to integrate renewables into the system.

“Having this battery there is going to be good for the node,” said Trupti Kalbag, director of power marketing at sPower.

Can batteries edge gas peakers out of California's mix?

Batteries don’t clean up grids by their mere existence; their impact depends on how they operate.

For the Luna project, Clean Power Alliance set up a tolling agreement with sPower, which Keefer likened to a car lease: The customer pays a fixed monthly fee to use the asset within certain parameters geared to protect the health of the equipment.

Once the plant is operational, which is expected in August 2021, CPA will use it to satisfy a resource-adequacy obligation with the state. That means the plant will have to bid into the CAISO markets during the peak hours of grid demand: 4 to 9 p.m. Outside of that, CPA can operate the battery however it chooses, balancing goals such as revenue maximization and greenhouse gas reduction.

Ideally, those two objectives will align.

“Any given day, once solar ramps down and you’re hitting that peak load time, you have a significant increase in greenhouse gas emissions intensity,” Keefer said. “Fossil-fueled generators are picking up the slack.”

The battery can charge during the sunny hours when renewables surge and prices drop, then discharge to fulfill its obligation in the evening, when carbon-intensity and prices increase. To the extent that such plants compete effectively with gas generators — which remains to be seen — they will push the evening resource mix in a cleaner direction.

Since battery plants are still quite novel in a peak-power role, grid-planning questions remain about what happens when you replace gas plants, which can run indefinitely, with batteries that have finite duration before they run out of juice.

The goal with Luna, said Clean Power Alliance Executive Director Ted Bardacke, is to finish it quickly to show California grid operators, regulators and utilities that battery plants can reliably take over the peak-power role from gas peakers.

“If we get this built and it operates right, you just can’t argue with that,” Bardacke told Greentech Media. “That’s been important for us: taking it out of the theoretical and into practice.”

As far as speed, sPower and CPA moved from bids to contract execution in under six months. It helps that community-choice aggregators don’t have to run their projects through the California Public Utilities Commission for approval, but that’s nonetheless an agile timeline for such a large project.

That contracting sprint, and the forthcoming task to deliver the project in a little over a year, was only possible thanks to years of work the sPower team had put into power-plant development in the Lancaster area. The firm has built hundreds of megawatts of solar there and decided to lay the groundwork for energy storage on land it had already acquired.

"We had filed for a specific storage interconnection a long time ago, which we’re using for this project," Kalbag said. "That’s how we’re able to bring this project online in a year.”

With the contract signed, it's onto procurement and construction.

Updated with comments from sPower's Trupti Kalbag.