AGREEMENTS FOR
SOLAR POWER AND
BATTERY STORAGE
San José City Council
October 25, 2022
1 Lori Mitchell, Director of Community Energy
Jeanne Solé, Deputy Director of Power Resources
Phil Cornish, Senior Power Resources Specialist
Prachi Avasthy, Division Manager of Risk Management, Contracts & Administration
MID TERM RELIABILITY BACKGROUND
• In February 2022, SJCE and EBCE issued a
joint RFO for clean new resources including
renewables and batteries with heavy
emphasis on Mid-Term Reliability (MTR)
compliant projects
• 27 bidders and 44 projects
• 10 projects shortlisted
• Recommendations for today:
• Cascade and Noosa standalone storage
projects from Broad Reach Power: RA-only
• Nova Power standalone storage projects from
Calpine Corporation: RA + dispatchable energy
• Staff will return with additional agreements
later this year
2 CPUC PROCUREMENT MANDATE
(MID TERM RELIABILITY)
D.21-06-035 (2021) requires SJCE to buy 247 MW of Net Qualifying Capacity (NQC), which is capacity that can be delivered during September peak load:
• 43 MW in 2023: (already procured)
• 129 MW in 2024: (112 MW including today's recommendation) • 32 MW in 2025: (13 MW including today's recommendation) • 43 MW in 2026:
• 21.5 MW Long Duration Storage (already procured through CC Power LDS Solicitation) • 21.5 MW Firm Clean Resources (already procured through CC Power FCR Solicitation) Penalties:
• If SJCE does not procure resources needed ahead of time, PG&E will be required to undertake procurement and the costs will be allocated to SJCE • Additional penalties could be applied based on the cost of a new battery storage facility 3
BROAD REACH POWER: CASCADE
Seller: Cascade Energy Storage, LLC
Developer: Broad Reach Power
Technology: Battery Storage
Product: RA (meets CPUC MTR requirement)
Location: San Joaquin County, CA
COD: June 1, 2023
Price: Fixed $/kw-mo, no escalation
Terms: 10 years
Annual Cost: $360,000
Total Cost: $3.6 Million
4 BROAD REACH POWER: NOOSA
5 Seller: Noosa Energy Storage, LLC
Developer: Broad Reach Power
Technology: Battery Storage
Product: RA (meets CPUC MTR requirement)
Location: San Joaquin County, CA
COD: June 1, 2024
Price: Fixed $/kw-mo, no escalation
Terms: 10 years
Annual Cost: $2.6 Million
Total Cost: $26 Million
BROAD REACH POWER
• Broad Reach Power is a utility scale
independent power producer
• 350 MW of battery storage in operation
• Over 10 GW in development pipeline
• At the end of 2021, Broad Reach Power
received $400 Million of equity
commitment to accelerate their growth
and expansion plans
• Broad Reach Power is not a publicly
traded company
6 Source: Broad Reach Power website
CALPINE CORPORATION: NOVA POWER
Seller: Nova Power, LLC
Developer: Calpine Corporation
Technology: Battery Storage
Product: RA (meets CPUC MTR requirement), SJCE can direct battery operation (SJCE pays for charging and collect revenues from battery discharge, lowers evening energy costs)
Location: Riverside County, CA
COD: June 1, 2025
Price: Fixed $/kw-mo, no escalation
Terms: 15 years
Annual Cost: $9.9 Million
Total Cost: $148.5 Million
7 CALPINE CORPORATION
• Full-service energy company
• Develops power generation
• Owns and operates a fleet of natural gas,
geothermal, and energy storage projects
• Sells wholesale and retail electricity
• Calpine has a geographically and
technologically diverse portfolio
• 76 power plants operating or under
construction in US and Canada
• Total generation capacity of approximately
26,000 MW
• Calpine Corporation is a private
company with public debt
8 Source: Calpine website
EDWARDS SOLAR V BACKGROUND
• December 2019, the SJCE signed a PPA with Terra-Gen for Edwards V solar project; Projected Online Date: December 31, 2022. • March 2022, Terra-Gen informed the Department they would not build the project due to CEQA construction issues.
• Department and Terra-Gen negotiated a replacement package of 4 contracts.
• These replacement agreements:
• Replace value of the Edwards Solar V PPA
• Reduce power costs and risks by transitioning to firm renewable energy structure (i.e.10AM-10PM similar structure to the Edwards IV PPA) • Increase renewable energy components and resource adequacy components (from solar and batteries)
9 TERRA-GEN
• Leading developer, owner, and
operator of utility-scale
renewable energy projects
• Operating since 2008 with over
1700 MW of operating projects
• Terra-Gen is not a publicly
traded company
• Provide firm renewable power
contracts
10 Source: Terra-Gen website
TERRA-GEN: EDWARDS SOLAR V
REPLACEMENT PACKAGE
Seller: NTGP Energy Management II, LLC
Enterprise Solar Storage II, LLC
Enterprise Solar Storage III, LLC
Developer: Terra-Gen, LLC
Technology: 4 contracts: renewable energy plus storage
Product: RA (meets CPUC MTR requirement), Firm Renewable Energy Location: Kern County, CA
COD: Varies, 2023-2026
Price: Fixed $/MWh for energy and $/kw-mo for RA, no escalation Terms: 15 years
Annual Cost: $23,140,000
Total Cost: $352,300,000
11 QUESTIONS?
12 Recommendations:
Authorize the City Manager or designee to
negotiate and execute:
i. an agreement with Cascade Energy Storage
LLC, to buy Resource Adequacy from a battery
storage facility,
ii. an agreement with Noosa Energy Storage LLC,
to buy Resource Adequacy from a battery
storage facility,
iii. an agreement with Nova Power, LLC, to buy
Resource Adequacy and Dispatchable Energy
from a battery storage facility,
iv. agreements with Terra-Gen to replace the
Edwards Solar V PPA.
Staff:
• Lori Mitchell, Director of Community Energy
• Jeanne Solé, Deputy Director of Power Resources
• Phil Cornish, Senior Power Resources Specialist
• Prachi Avasthy, Division Manager of Risk Management,
Contracts & Administration
Source: Terra-Gen website