California ISO (CAISO) is set to significantly boost its battery storage capacity in 2024, solidifying its position as a key player in electrochemical energy storage in the United States. According to S&P Global Market Intelligence data, developers are gearing up to install 6,813 MW of battery power storage within CAISO’s jurisdiction this year, primarily comprising 4-hour lithium-ion resources. This marks a substantial increase from the previous year’s additions. Non-hydro energy storage connected to CAISO’s grid started the year at 8,453 MW, with the majority of installations occurring over the past four years.
This surge in battery projects forms a crucial part of the planned 12,126 MW of net CAISO capacity additions in 2024. Following closely behind are new solar capacity additions of 4,801 MW, often coupled with storage solutions. Despite potential delays in development timelines, many projects scheduled for completion this year are progressing well and expected to be energized before the peak summer demand season. Notable among these projects is Calpine Corp.’s Nova Power Bank in Menifee, Calif., a substantial 680-MW/2,720-MWh battery system set to come online in June.
Backed by multiple offtake agreements and over $1 billion in debt financing, the Nova Power Bank signifies Calpine’s emergence as a major developer of battery storage facilities in the U.S., adding to its existing portfolio of approximately 26 GW of operating gas and geothermal assets across North America. The project will be deployed in phases, with two 230-MW sections expected to commence commercial operations in June under contracts with Southern California Edison Co. (SCE). Subsequent phases for community choice aggregator Peninsula Clean Energy and additional sections for SCE are also in the pipeline, positioning the Nova Power Bank for full operation within five years of the retirement of GE’s combined-cycle gas plant in January 2020.
Alex Makler, senior vice president of Calpine’s Western US region, emphasized the strategic value of battery storage, stating, “It’s not only economically valuable; it’s really valuable from a system planning standpoint. It helps with ensuring reliability, adequate supply, and it makes room for even more development of renewables.” Arevon Energy Inc. is another key player actively involved in constructing storage and solar projects in California, including the Condor Battery Storage Project in San Bernardino County and the Vikings solar-plus-storage complex in Imperial County. Long-term offtake agreements with utilities and community choice aggregators underpin these projects, aligning with the state’s mandate for load-serving entities to secure a minimum of 11,500 MW of clean energy resources by 2026.
The directive, originally intended to address potential shortfalls resulting from the decommissioning of Diablo Canyon nuclear power plant and aging gas plants, underscores California’s commitment to clean energy procurement. As the state accelerates its energy resource development, CAISO is implementing reforms to streamline its generator interconnection process, crucial for facilitating the integration of energy and storage projects. These reforms are in line with the ambitious goals outlined in Senate Bill 100, aimed at reinforcing the importance of timely and efficient resource onboarding to advance sustainable energy objectives.
The Nova Power Bank project, once operational, could power up to 680,000 homes for four hours, particularly crucial during peak demand hours when solar power generation is low. Calpine’s strategic move to explore opportunities for enhancing or replacing existing facilities with battery systems aligns with industry trends of maximizing infrastructure and leveraging federal tax credits. The company has already integrated lithium-ion batteries at the Russell City Energy Center in Hayward, California, enhancing grid recovery capabilities from blackouts.
With a pipeline of approximately 2,000 MW of additional battery power storage capacity in California, Calpine is at the forefront of the state’s energy transition. California has witnessed a remarkable 757% increase in battery storage capacity over the past four years, reflecting the growing emphasis on clean energy solutions. As CAISO leads the charge in battery storage expansion, the streamlined interconnection processes and innovative projects like Nova Power Bank will play a pivotal role in driving the state towards its decarbonization goals.
