The Next Giant Leap for Electric System Reliability: PG&E Proposes Nearly 1,600 MW of New Battery Energy Storage Capacity

Rhea-AI Summary

Pacific Gas and Electric Company (NYSE:PCG) plans to add nine new battery energy storage projects totaling approximately 1,600 MW to enhance California's renewable energy integration. If approved by the California Public Utilities Commission, this will increase PG&E's total storage capacity to over 3,330 MW by 2024. The projects aim to support California’s greenhouse gas reduction policies and replace retiring natural gas generation. The first projects are expected to come online as early as August 2023, contributing to grid reliability and cleaner energy delivery.

Positive

• Expansion of battery storage capacity to 3,330 MW by 2024.
• Projects support California's GHG reduction policies.
• First projects expected to be operational by August 2023.

Negative

• None.

Projects Expected to Deliver Clean Energy to Customers by 2024

OAKLAND, Calif.--(BUSINESS WIRE)-- As part of its mission to build a stronger, more resilient energy grid for the hometowns it serves, Pacific Gas and Electric Company (PG&E) is proposing nine new battery energy storage projects totaling approximately 1,600 megawatts (MW), to further integrate renewable energy resources and improve reliability of the California electric system.

If approved by the California Public Utilities Commission (CPUC), these nine projects would bring PG&E’s total battery energy storage system capacity to more than 3,330 MW by 2024.

“As we work year-round to strengthen our electric system, we are also planning, engineering and building the grid for a future that harnesses the power of solar plus storage on an unprecedented scale. We are committed to safely delivering reliable and clean energy in a way that achieves the greatest value for our customers. And we know we can’t go it alone. We welcome continued partnerships with the best and the brightest to make California’s clean energy future a reality,” said Joe Bentley, Senior Vice President, Electric Engineering, PG&E.

These large-scale battery systems will participate in the California Independent System Operator (CAISO) markets, providing energy and ancillary service—such as serving as an operating reserve to help provide enough energy supply to meet demand—to the CAISO-controlled grid.

Timeline Toward a Cleaner Energy Future for California

The nine project agreements are the result of a competitive request for offers (RFO) PG&E launched to procure energy resources ordered by the CPUC’s June 2021 decision directing all load serving entities (LSEs) in California—including California’s investor-owned utilities, such as PG&E—to collectively procure 11.5 gigawatts (GW) of new electricity resources.

The energy would come online between 2023 and 2026 to support California’s greenhouse gas (GHG) reduction policy, and to replace electricity generation from the expected retirements of Southern California natural gas plants and PG&E’s Diablo Canyon Power Plant (DCPP).

The CPUC decision requires the resources to begin delivering energy to customers incrementally: at least 2,000 MW by August 1, 2023; an additional 6,000 MW by June 1, 2024, an additional 1,500 MW by June 1, 2025; and an additional 2,000 MW by June 1, 2026.

To replace the current supply of energy from DCPP without a net increase in GHG emissions when DCPP retires in 2025, at least 2,500 MW of the resources procured by the LSEs collectively, between 2023 and 2025, must be from zero-emission electric generation resources, generation resources paired with storage, or demand response.

In total, PG&E is responsible for purchasing at least 2,302 MW to be delivering energy to the grid between 2023 and 2026. PG&E will issue another (phase two) competitive solicitation later this year for resources to be delivering energy by June 1, 2025 and June 1, 2026.

Charging Ahead with Battery Energy Storage

Today, battery storage helps integrate renewable sources onto the grid, enhancing the overall reliability of an ever-changing energy supply. Batteries are charged when energy demand and prices are lower (generally, when solar generation is higher) and then send that reserved power to the grid when demand and prices increase, providing additional capacity and resulting in lower overall costs for our customers.

Including these nine new projects, PG&E now has contracts for battery energy storage systems totaling more than 3,330 MW of capacity being deployed throughout California through 2024.

To date, more than 600 MW (of the 3,330 MW contracted) of new battery storage capacity has been connected to California’s electric grid including:

• 400 MW Vistra Moss Landing Battery Energy Storage Facility in Monterey County, commissioned August 2021
• 63 MW NextEra Blythe BESS located in Riverside County, commissioned August 2021
• 50 MW Gateway BESS located in San Diego, commissioned July 2021

PG&E anticipates an additional 1,100 MW of storage capacity (of the 3,330 MW contracted) to come online in 2022 and 2023 including PG&E’s Elkhorn Battery – a 182.5 MW BESS comprised of Tesla Megapacks – which is anticipated to be operational before summer 2022, pending final testing and certification.

Project Details

The nine projects announced today and listed below all feature lithium-ion battery energy storage technology, each with a four-hour discharge duration. PG&E has executed 15-year Resource Adequacy agreements for each of the following projects:

• Beaumont ESS I, LLC (a wholly owned subsidiary of Terra-Gen, LLC) – The Beaumont Energy Storage project is comprised of a 100 MW stand-alone, transmission-connected battery energy storage resource located in Beaumont, Calif. (Riverside County) and scheduled to be online by August 2023.
• Sanborn ESS I, LLC (a wholly owned subsidiary of Terra-Gen, LLC) – The Edwards Sanborn Energy Storage project is comprised of a 169 MW stand-alone, transmission-connected battery energy storage resource located in Mojave, Calif. (Kern County) and scheduled to be online by August 2023.
• Canyon Country ESS I, LLC (a wholly owned subsidiary of Terra-Gen, LLC) – The Canyon Country Energy Storage project is comprised of an 80 MW stand-alone, transmission-connected battery energy storage resource located in Santa Clarita, Calif. (Los Angeles County) and scheduled to be online by October 2023.
• Moss Landing Energy Storage 3, LLC (a wholly owned subsidiary of Vistra Corp) – The MOSS350 Energy Storage project is comprised of a 350 MW stand-alone, transmission-connected battery energy storage resource located in Moss Landing, Calif. (Monterey County) and scheduled to be online by August 2023.
• Poblano Energy Storage, LLC (a wholly owned subsidiary of Strata Clean Energy, LLC) – The Inland Empire Energy Storage project is comprised of a 100 MW stand-alone, transmission-connected battery energy storage resource located in Rialto, Calif. (San Bernardino County) and scheduled to be online by April 2024.
• NextEra Energy Resources Development, LLC (a wholly owned subsidiary of NextEra Energy Inc.) – The Corby Energy Storage project is comprised of a 125 MW stand-alone, transmission-connected battery energy storage resource located in Vacaville, Calif. (Solano County) and scheduled to be online by June 2024.
• NextEra Energy Resources Development, LLC (a wholly owned subsidiary of NextEra Energy Inc.) – The Kola Energy Storage project is comprised of a 275 MW stand-alone, transmission-connected battery energy storage resource located in Tracy, Calif. (Alameda County) and scheduled to be online by June 2024.
• Nighthawk Energy Storage, LLC (an affiliate of Arevon Energy) – The Nighthawk Storage project is comprised of a 300 MW stand-alone, transmission-connected battery energy storage resource located in Poway, Calif. (San Diego County) and, pending required local approvals, is scheduled to be online by June 2024.
• Caballero CA Storage, LLC (a wholly owned subsidiary of Origis USA, LLC) – The Caballero Energy Storage project is comprised of a 99.7 MW stand-alone, transmission-connected battery energy storage resource located in Nipomo, Calif. (San Luis Obispo County) and scheduled to be online by June 2024.

About PG&E

Pacific Gas and Electric Company, a subsidiary of PG&E Corporation (NYSE:PCG), is a combined natural gas and electric utility serving more than 16 million people across 70,000 square miles in Northern and Central California. For more information, visit pge.com and pge.com/news.

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Source: Pacific Gas and Electric Company

FAQ

What is Pacific Gas and Electric's plan for battery energy storage projects?

PG&E plans to propose nine new battery energy storage projects totaling about 1,600 MW to enhance its capacity to over 3,330 MW by 2024.

How will PG&E's energy storage projects impact California's energy system?

The projects will help integrate renewable energy and improve reliability in California's electric grid.

When are PG&E's new energy storage projects expected to begin operations?

The first projects are expected to come online by August 2023.

Who needs to approve PG&E's battery energy storage projects?

The California Public Utilities Commission (CPUC) must approve the proposed battery energy storage projects.

What is the significance of PG&E's battery energy storage expansion?

The expansion supports California's greenhouse gas reduction policies and replaces retiring natural gas generation resources.