A wave of grid storage and energy efficiency projects in California traces back to the disastrous Aliso Canyon natural gas storage leak last fall, as the state scrambles to avert supply shortages and backups by building new resilience into its energy system.
“Although Sempra Energy plugged its massive gas leak in February, use of its Aliso Canyon complex, California’s biggest gas storage field, remains restricted,” Bloomberg reports. “Grid storage projects are now being fast-tracked and built in less than four months, compared to an average of 3½ years in previous procurements.”
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One of the big winners in the realignment is Tesla Motors, which won a contract to supply 20 megawatts (80 megawatt-hours) of battery storage to Southern California Edison. “The Powerpacks, worth tens of millions of dollars, will be operational in record time—by the end of this year,” writes Bloomberg’s Tom Randall. The deal will briefly be the biggest lithium ion battery project in the world.
“The storage is being procured in a record time frame,” months instead of years, said Yayoi Sekine, a battery analyst at Bloomberg New Energy Finance. “It highlights the maturity of advanced technologies like energy storage to be contracted as a reliable resource in an emergency situation.”
California regulators have also approved two contracts with AES Corporation to supply 37 MW of grid-scale storage, as well as a 20-MW deal with AltaGas Ltd.
“This isn’t a Tesla-only story,” Sekine said. “This is a broader energy win.”
In a post last week, the Tesla blog noted that the Aliso Canyon methane leak “is considered the worst in U.S. history, with aggregate greenhouse gas emissions said to outweigh those of the 2010 Deepwater Horizon oil spill.” A year later, “Los Angeles is still in need of an electric energy solution that ensures reliability during peak times. As winter approaches, homes and buildings in the basin will need more natural gas for heat.”
The company said the rapid battery production capacity of its Reno, Nevada gigafactory “will allow this system to be manufactured, shipped, installed, and commissioned in three months. The system will charge using electricity from the grid during off-peak hours and then deliver electricity during peak hours to help maintain the reliable operation of Southern California Edison’s electrical infrastructure.”
Last month, as well, SoCalEd announced a deal with smart thermostat-maker Nest to deliver a 50-megawatt “virtual power plant”, delivering a kilowatt per home of reliable load reduction for 50,000 homes “across a stretch of Southern California grid that may run short of power during hot afternoons next summer,” Greentech Media reports.
“50,000 households enrolled in particular geographical bounds is certainly an ambitious goal,” said Nest Energy Businesses Director Ben Bixby. “We’ll be tapping our existing installed base to provide immediate relief,” and the two companies will work together to sign up new customers for “what remains a very attractive offer to give households an opportunity to be part of the solution.”
The normally pro-fossil Wall Street Journal also ran a feature last week that showcased the California Energy Commission’s plan to require a zero net energy (ZNE) standard for all new homes by 2020.
“The real challenge in implementing ZNE isn’t the technology but the financing,” the Journal notes. “Mortgage writers and insurers nationwide have been slow to account for the value of efficient homes. In theory, lower monthly bills should free up cash that homeowners can use for higher mortgage payments. What often happens, however, is appraisers don’t know how to value a solar system, so the appraisal comes in below the sale price.” (h/t to Adrian Irving-Beer for first pointing us to the Tesla blog post)