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Pairing energy storage with solar power generation is not just a good idea, it could influence whether a project receives regulatory approval. Solar developer BrightSource Energy and utility Southern California Edison are finding this out as they face potential rejection for two of their five projects that lack the energy storage component.
The staff of California Public Utilities Commission is recommending a “no” vote for two power purchase agreements in which SCE will buy power from BrightSource’s yet-to-be-built Rio Mesa solar project. The staff said the two agreements are too expensive and noted that the power plants for the contracts won’t have ways to store electricity for later use. The three remaining power purchase agreements between the two companies involve other power plants that will have energy storage, which will give Edison more flexibility to manage supply and demand.
The commission was originally scheduled to vote on the five power purchase agreements today but opted to postpone the decision until next month. The postponement request came from commission president Michael Peevey, who often pushes and wins approval for controversial projects from his fellow commissioners by coming up with alternative proposals that contain compromises.
The commission staff said in the report that storage is a “unique attribute” that “decreases renewable integration risk and provides more value to ratepayers.” With energy storage, a utility could bank electricity when demand is low and release the power when demand is high. It makes a solar power plant act more like conventional fossil fuel power plants, which can produce power any time of the day. California utilities are under mandates to increase the amount of renewable energy they serve to their customers, and they are turning to solar and wind energy to meet the requirements.
Solar and wind farms only produce power when the sun is out or the wind is blowing, so they won’t be able to send electricity to the grid consistently in ways that fossil fuel power plants can. An electric grid runs smoothly when there is a balance of supply and demand, however, and that makes managing solar and wind energy a tricky business. The ability to bank solar or wind electricity will help solve this dilemma. In fact, the commission is considering whether to require utilities to pay for energy storage as more solar and wind energy flows into the grid.
The cost of adding energy storage doesn’t always make sense, especially in the case of using newer storage technologies, such as batteries. But it does for BrightSource, which announced last August that it would start designing storage into its power plants. The Oakland company then revealed last November that it would add energy storage in some of the power plants that would serve Edison’s customers. The announcement mentioned three contracts to sell power to Edison, the same contracts that are now under review by the commission.
Edison actually sought approval for all five contracts back in 2009, when energy storage played no part. Then it re-negotiated the contracts with BrightSource in 2011 after BrightSource had modified those power plant proposals to reduce their environmental impact. This time around, energy storage made its way into three of the contracts.
The two contracts that won’t benefit from storage are part of the proposed Rio Mesa project, which is under review by California Energy Commission. BrightSource applied for Rio Mesa’s approval last October, and ideally it would have approved contracts to sell power from the project in hand once it gets the permits to build it. Lining up those contracts also will be important for convincing investors to finance the project.
BrightSource plans to use tanks of molten salt for storing the thermal energy produced by its fields of mirrors. The mirrors concentrate and direct sunlight to heat up a water-containing boiler atop of a tower. The steam from the heated water runs the turbine and generator to produce electricity. If the steam isn’t going to be used to generate electricity, then it will be piped to heat the molten salt, which is good at trapping heat. Power plant operators can then use the hot molten salt to produce steam for electricity generation whenever that is needed.
BrightSource isn’t alone in finding out the necessity of offering storage to attract utility customers. Areva Solar told me a few months ago that it had finally decided on using molten salt for storage for its power plants. Areva also uses mirrors to harness the sun’s heat to produce electricity, but the mirror and power plant design is quite different from BrightSource’s.