STAFF REPORT
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___________________________________________________________________ DAT
E: July 26, 2022
T
O: Justin Hess, City Manager
F
ROM: Dawn Roth Lindell, General Manager, Burbank Water and Power BY: Mandip Kaur Samra, Assistant General Manager, Power Supply S
UBJECT: Approval of a Master Equipment Purchase Contract and a Master Services Purchase Contract with ESS Tech Inc. for the P urchase, Installation , Maintenance, and Warranty Services for the I ron-flow Energy Storage System
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RECOMMENDATION
Approve and authorize the General Manager of B urbank Water and P ower (BWP), as designee of the City Manager , to execute a master equipment purchase contract and a master services purchase contract with ESS Tech, Inc. (ESS Tech) for the purchase, installation, maintenance, and warranty services for a 75-kilowatt (kW) iron-flow energy storage system in an amount not to exceed $400,000 , and to execute purchase orders thereunder and any other ancillary documents necessary to effectuate such purchase.
BACKGROUND
In December 2021, BWP was awarded a Demonstration in Energy and Efficiency Development (DEED) grant in the amount of $125,000 from the American Public Power Association (APPA). This grant is for a 75kW and up to 600 kW hour iron-flow energy storage pilot project (iron-flow battery). The DEED grant is available to APPA members that implement a pilot project , provide early commercialization of new technology , and demonstrate best practices, services, tools, and publications that strengthen public power utilities and impr ove customers ’ lives. On May 24, 2022, City Council approved the agreement with APPA for the DEED grant in the amount of $125,000.
To use the APPA DEED grant, BWP had to work with a vendor to deploy the iron- flow battery pilot project. BWP is working jointly with ESS Tech for the project. Over the past year, BWP has been working with ESS Tech to finalize contracts and purchase orders to acquire, implement, and deploy the iron-flow battery pilot project.
DISCUSSION
BWP is developing a pilot project to demonstrate an iron- flow battery on the M agnolia Power Project (MPP) eco-campus. This technology allows energy to be stored for a
WATER AND
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For M. Samra
2 longer period of time, compared to traditional energy storage technologies like lithium - ion. It has the additional advantage of being far more environmentally benign than other commercial energy storage technologies.
Overall, energy storage systems of all types assist with smoo thing out the intermittency caused by renewable resources (namely solar and wind resources), allow energy to be shifted when needed to meet energy demand, defer upgrades to the transmission and distribution system and have no air emissions (when interconnected to a renewable resource). This pilot project will be interconnected with the existing 265kW hour solar installation on the MPP eco-campus.
An iron-flow battery is a long duration battery which enables energy delivery for up to 12 hours. Iron-flow batteries use materials that are abundant on earth, such as iron, salt, and water for the electroly te. For comparison, on average, lithium-ion battery systems offer four hours of energy delivery.
BWP and ESS Tech will work cooperatively on this installation. ESS Tech has a successful track record on the iron- flow battery system. The iron-flow battery developed by ESS Tech is a long duration, all -natural battery which provides commercially ready products to support the decarbonization of the electric grid. With batteries that have up to 12 hours in duration, ESS Tech can enable more solar energy to be stored and used throughout the day, maximizing clean energy potential and supporting more low- cost solar utilization. This is i deal for utilities see king to provide 6- 12 hours of clean energy during peak demand in the evenings and to support clean electric vehicle charging in the evening. ESS Tech’s iron-flow battery provides flexible, frequent cycling (charge and discharge) without decreasing the efficiency of the batter y. ESS Tech’s products are manufactured in Wilsonville, Oregon, and it sources over 80% of its materials in the United States. ESS Tech has had multiple deployments since developing its iron-flow battery technology in 2015, including several in California. This BWP ESS Tech energy storage project will be the first ESS Tech system operated by a municipal utility.
BWP has negotiated a m aster equipment purchase contract and a master services purchase contract with ESS Tech. The m aster equipment purchase contract sets the price for the energy storage warehouse, which includes the shipping costs and installation and commissioning for the energy storage system. Overall, the expected cost for the master equipment purchase contract is estimated at $210,600. This does not include the prep work necessary to install the energy storage system onsite, which will be done by BWP personnel and/or an outside contractor that has expertise with these types of energy storage systems. The master service purchase contract provides warranty , and operations and maintenance of the iron-flow battery for a fixed price of $42,573 for a total of ten years. BWP is also including a conti ngency amount for the project to allow for potential supply chain and labor issues for a total cost not to exceed $400,000.
FISCAL IMPACT
Funds are budgeted in the fiscal year 2022-2023 budget and a portion will come from the public benefits f und since this is a research and development project. In addition, $125,000 of these costs will be offset by the APPA DEED grant.
3 CONCLUSION
Staff recommends that the City Council approve and authorize the General Manager of BWP, as designee of the City Manager , to execute the contracts with ESS Inc. for the purchase, installation, maintenance , and warranty services for the iron- flow energy storage system in an amount not to exceed $400 ,000 and to execute purchase orders thereunder and any other ancillary documents necessary to effectuate the foregoing.
ATTACHMENTS
Attachment 1 – Master Equipment Purchase Contract
Attachment 2 – Master Services Purchase Contract