According to media reports, California Community Power (CC Power) recently announced that an 8-hour lithium-ion battery energy storage project has become their first long-term energy storage resource of choice.



Seven CCA member organizations, who jointly oversee procurement work, voted to sign an energy storage service agreement with their developer, REV Renewables, a subsidiary of LS Power.



The project is called Tumbleweed and will have an output of 69MW and a capacity of 552MWh. It is expected to be launched in 2026 and will be connected to the California Independent System Operator (CAISO) grid.



A representative of Silicon Valley's clean energy told the media that CC Power's procurement marks CCA Group's "first major procurement" for long-term storage.



"Long term energy storage is an important resource that can amplify the value of renewable energy and accelerate California's transition to a clean, reliable, and affordable power grid," said Girith Balachandrian, CEO of Silicon Valley's Clean Energy



This is due to regulatory requirements from the California Public Utilities Commission (CPUC), which require energy suppliers in the state to grid 11.5GW of energy resources (almost all of which must be low or zero emission) within five years to ensure it meets its defined "mid-term reliability".

This is to alleviate the impact of the retirement of some natural gas power plants and the upcoming retirement of Diablo Canyon nuclear power plant.



Pacific Gas and Power Company (PG&E) recently announced its participation in the construction of a 6.4GWh four hour lithium battery storage system, which includes plans to build the world's largest lithium battery storage system (BESS) project to date: Vistra Energy's Moss Landing, with a 1.4GWh expansion. After completion, Moss Landing's production capacity will reach 3GWh.



In June 2020, after the California Public Utilities Commission (CPUC) issued its interim reliability regulations, a CCA consisting of 11 members issued an information request seeking potential suppliers for long-term storage with at least 8 hours of discharge capacity.



In October 2020, the follow-up action of soliciting information for the first time initiated a Request for Quotation (RFO), seeking long-term grid connected energy storage resources of up to 500MW, with a discharge time of 8-16 hours, and providing a 10-year contract. At this point, the number of members participating in CCA has decreased to 8, and the others are expected to release their own RFOs at an appropriate time.



"The first project is an exciting milestone that showcases how CCA is working together to advance our common goal of transitioning to a carbon free grid," Balachandrian said.



The importance of long-term energy storage in helping California achieve climate and air pollution goals, while maintaining the long-term reliability of the power system, has received strong support throughout the state, especially Governor Gavin Newsom. Newham's recently announced 2022-2023 budget includes $380 million in funding to support long-term energy storage projects.



The results of CCA solicitation are very interesting because currently, most lithium-ion BESS connected to the grid around the world usually have a maximum duration of 4 hours. People have always hoped that other technologies, such as flow batteries or thermal energy storage, may be competitive for applications that require 8 hours or longer.

Previously, George Hilton, an energy storage industry analyst at IHS Markit, also stated that flow batteries may compete with lithium batteries for 8 hours or longer.



However, the winning bidder in this bidding is lithium batteries. The editor believes that the reasons for the victory of lithium batteries over flow batteries are as follows:

California has deployed the world's largest lithium battery energy storage project, Mosslanding, with relatively rich operational experience, while flow batteries lack large-scale commercial operation experience.

At present, the main type of flow battery is all vanadium flow battery. Due to the high price of vanadium, the cost reduction is not very significant when expanding capacity for more than 6 hours (as shown in the following figure)



Data source for this chart: NeLCOS Energy Storage Calculator

3. Due to the cost reduction and rich application experience brought by the large-scale application of power batteries, lithium batteries have won the bid.



The winning of the 8-hour energy storage project for lithium batteries also indicates that the current market demand for long-term energy storage is becoming increasingly urgent.

In the future, choosing different technological routes for liquid flow batteries can result in lower cost raw materials. When the system's energy storage capacity expands, the cost of energy storage can rapidly decrease, forming a cost advantage for lithium batteries. At the same time, compressed air energy storage also has the opportunity to form a cost advantage over lithium batteries in long-term energy storage.



In addition to cost reduction, various long-term energy storage technologies must have more and larger mature commercial operation cases to support them in order to be applied more in the future.



Based on the energy storage cost calculation method of the US Department of Energy, ZH Energy has developed an energy storage cost and investment return calculator called NeLCOS. We welcome everyone to try it out and provide feedback:
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