LONG-DURATION STORAGE
AND
PROCUREMENT AUTHORITY
San José City Council
March 8, 2022
Lori Mitchell, Director of Community Energy
Jeanne Solé, Deputy Director of Power Resources
LONG-DURATION STORAGE
OBJECTIVE – LONG-DURATION STORAGE
Seek authority to procure up to 25 megawatts (MW) from LS Power’s Tumbleweed long-duration storage battery project through CC Power, a Joint Powers Authority composed of CCAs
• $5.9M annual cost
• $89M in total not to exceed amount
3 WHAT IS LONG-DURATION STORAGE?
• Technologies that store
renewable energy for use at a
later time
• Long-duration storage
discharges power for 8 hours
or longer
• Important to pair with
renewables to ensure
reliability while reducing
carbon emissions
4 Battery storage from SJCE's Kern County
Solar and Storage Project
BACKGROUND
• 2021 CPUC Decision 21-06-035 requires SJCE to buy 247 MW of clean capacity by 2026, including 21.5 MW of long-duration storage • CC Power is a Joint Powers Authority comprised of 10 CCAs formed to buy large scale clean energy and reliability resources
• SJCE participated in a CC Power solicitation for long-duration storage in October 2021, which received offers from 51 entities
• LS Power’s Tumbleweed ranked the highest in the solicitation evaluation • Six other CCAs* participating in the agreements with LS Power: 4 investment grade credit rated, other 2 are each taking less than 5% of the project *Peninsula Clean Energy, Sonoma Clean Power, CleanPower San Francisco, Redwood Coast Energy Authority, Silicon Valley Clean Energy, and Valley Clean Energy5 LS POWER’S TUMBLEWEED PROJECT
• Project size: 69 MW; SJCE share: 15.37 MW
• Technology: 8-hour lithium-ion battery energy storage • Cost: ~$5.9 million annually, $89 million in aggregate • Location: Kern County, CA
• Online date: June 2026
• Term: 15 years
• Seeking approval for up to 25 MW to be able to take additional capacity if other CCAs drop out. Can be used to meet resource adequacy and energy needs.
6 AGREEMENT STRUCTURE
1. Energy Service Storage Agreement
CC Power buys the storage services from the project developer LS Power
2. Project Participation Share Agreement
Each participating CCA receives from CC Power its related share of the storage services
3. Buyer Liability Pass Through Agreement
The developer has direct recourse to each participating CCA for its share of the contract payments but is limited to only that CCA’s share.
Required as CC Power has no assets or revenues.
4. Coordinated Operational Agreement
Defines how the resource will be operated between CC Power and the participating CCAs 7 PROCUREMENT AUTHORITY INCREASE
WHY IS AUTHORITY NEEDED?
• Routine additional procurement as outer years move closer to current date in order to comply with Risk Oversight Committee coverage goals
• If SJCE does not procure in forward markets, SJCE must buy in more volatile CAISO markets to meet its load
• Address price increases since City Council authorized procurement for 2022-2025 in May of 2021
• Moderate delivery risks related to intermittent wind and solar power contracts that do not have well established delivery patterns 9 SUMMARY OF PROCUREMENT REQUEST
10 Calendar
Year
Total Existing
Authority
Requested
Additional
Authority
Total Authority
with Request*
Net Expected
Cost (Pro-
Forma)
Target
Coverage
Ratio
2022 $283,200,000 $77,000,000 $360,200,000 $289,000,000 120% 2023 $248,100,000 $72,000,000 $320,100,000 $277,000,000 110% 2024 $237,500,000 $54,000,000 $291,500,000 $295,000,000 90% 2025 $159,800,000 $88,000,000 $247,800,000 $286,000,000 90% Total $928,600,000 $291,000,000 $ 1,219,600,000 $1,147,000,000
POWER SUPPLY AUTHORITY
11 • Recommendation:
• Authorize procurement of up to
25 MW from LS Power's
Tumbleweed long-duration
storage project.
• Authorize additional
procurement authority of up to
$291 million through 2025 for
power supply contracts with
durations of 5 years or shorter.
• Staff
• Lori Mitchell, Director
• Jeanne Solé, Deputy Director
QUESTIONS?
12 SJCE's Kern County Solar and Storage
Project