Utility PG&E finalized its contract with a battery project slated to displace a jet-fuel-burning power plant in downtown Oakland, California.
The Oakland Clean Energy Initiative models a pathway for removing decades-old power plants in dense urban settings while keeping the lights on with new lithium-ion batteries. But the project’s collaborative business model also makes it potentially groundbreaking for energy storage development, by formalizing the use of the battery for discrete grid services on behalf of two different clients.
PG&E, which is working to emerge from bankruptcy by the end of June, has experience building batteries and contracting with third parties for the use of their batteries. Battery owners often contract services to an offtaker while playing in merchant markets themselves. But the Oakland project marks a new foray into an owner sharing a front-of-meter battery plant with multiple customers.
Independent power producer Vistra Energy, which owns the 165-megawatt jet-fueled plant in question, signed a deal with PG&E to build a 36.25-megawatt/145-megawatt-hour battery at the existing site in Jack London Square. The facility will provide “local area reliability service,” helping the utility with its job of transmitting power to residents in Oakland. Doing so avoids a far costlier investment, like running new wires over the hills from the Moraga substation.
But those consumers now buy their power from a community-choice aggregator called East Bay Community Energy, a locally administered group dedicated to rapidly scaling up clean energy. EBCE contracted with Vistra last year to use the same battery as a capacity source to fulfill its resource adequacy requirements, which provide power to ride out extreme peak events. The battery originally was going to deliver 20 megawatts/80 megawatt-hours, but the planned capacity has expanded since then.
The double-dipping addresses a structural challenge facing the rise of storage technology on the grid: Batteries can do all sorts of useful things, but it’s often hard to find one customer that needs all of those capabilities. A world that constrained batteries to single uses for single customers would result in redundancy and inefficiency compared to a system where multiple stakeholders use the same equipment for different purposes.
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