It’s the energy storage industry’s equivalent of the Oklahoma land rush.
While most Americans were paying attention to election results, news emerged out of California on Wednesday that truly heralds a new era for the energy storage industry. Utility Southern California Edison announced that it will acquire 2200 megawatts (MW) of new power generation assets, of which 250 MW will be energy storage systems. This is the end result of the “Lowest Cost Resource” request for proposals that is designed to eventually replace the generation provided by the shuttered San Onofre nuclear power plant.
While the sheer scale of the announcement is staggering (no utility has ever purchased 250 MW of non-pumped-hydro energy storage before), the details of the announcement are even more impactful. Although SCE was expected to use some of this bid for energy storage (it listed energy storage as a “preferred resource” on the RFP), Navigant Research assumed the energy storage part of the purchase would be about 50 MW. By ordering five times that amount of energy storage, SCE is making a very loud statement about how highly it values energy storage as a grid management tool.
The Land Rush Begins
Another important aspect of this move is that it was done on a completely level playing field. SCE decided to purchase 250 MW of energy storage because it felt it had a higher value than any other generation asset (including natural gas, wind and solar). That in itself is an extremely important positive note for the energy storage industry.
Even more important for the industry is that SCE’s big vote of confidence for energy storage happened just before the launch of three big RFPs that were designed as part of the energy storage mandate that California is forcing on the big utilities. By December 1st, all three of the large investor-owned utilities in the state will introduce a total of more than 200 MW of energy storage purchases. It’s the energy storage industry’s equivalent of the Oklahoma land rush.