Southern California Edison President Ron Nichols says battery advancements are reshaping how the utility thinks about generating resources new and old.
Two years ago, a San Diego Gas and Electric executive announced a bold aspiration at the Energy Storage North America conference.
“I see a future where there will be no more gas turbines,” said Jim Avery, SDG&E’s chief development officer.
Avery told the conference that one day battery storage could become cost-effective enough to displace the need for gas-fired power plants. It was a striking prediction, particularly at a time before the Aliso Canyon gas leak, when California utilities proved that storage could be deployed in a matter of months to help manage peak demand.
Two years later, market and public policy drivers are pushing another major California utility to integrate that vision into its worldview, prioritizing renewables and energy storage over new gas-fired resources.
“We will constantly be looking at, every time we need a new resource — how can we avoid the need to add another gas-powered resource?” Ron Nichols, president of Southern California Edison, told Utility Dive in an interview at the conference. “Even if they are built, they’re not gonna run much. They’re going to be there exclusively for reliability, full stop. That would be the only reason they’re added.”
“Even if [new gas plants] are built, they’re not gonna run much. They’re going to be there exclusively for reliability, full stop. That would be the only reason they’re added.”
Nichols, the former general manager of the Los Angeles Department of Water and Power, reiterated that point in his keynote address at the event, saying that rapid advancements in energy storage are making batteries viable faster than he ever imagined.
“Five years ago, I would not have believed that we would run solicitations and come out with over 400 contracts for over 450 MW of batteries and other storage in the timeframe we have,” Nichols said. “I wouldn’t have thought we’d have contracted for 160 MW of [behind-the-meter] energy storage for our customers.”
Many of those contracts stem from SCE’s mammoth solicitation for local capacity requirements in 2013. At the time, the utility was mandated to contract for 50 MW of storage, but head-to-head comparisons with other resources resulted in five times that amount — more than 250 MW of storage received contracts.
That solicitation also resulted in PPAs for two new gas-fired plants, sparking criticism from some clean energy activists who said the storage deals were window dressing for the siting of more carbon-emitting resources.
Nichols said those critiques don’t appreciate the capacity situation SCE faced in 2015. New regulations on power plant cooling are set to push many old gas-fired generators offline, and SCE needed to replace them with new flexible generation.
D Utility Dive – Gavin Bade – 08/10/2017