By: Cameron Schilling, Vice President, Market Strategies and Regulatory Affairs, NHA
Employees working at the San Diego County Water Authority and the City of San Diego likely won’t be taking much of an August vacation. Instead, many of them will be gearing up for preliminary studies, environmental reviews, and licensing activities for the proposed San Vicente Energy Storage Facility.
That’s because the facility – being proposed in partnership by the city and the county – received a shot in the arm in July 2021, when California Governor Gavin Newsom signed the state budget into law. Specifically, the budget includes $18 million in funding – enough to advance the project through initial design, environmental reviews, and the federal licensing process.
The proposed 500-MW project would be located outside of San Diego. It is designed to be closed loop or “off-river,” which means the facility will have few environmental impacts to the local area.
The city and county say the project is vital to supporting the grid’s integration of variable resources like wind and solar. Here’s an excerpt from a news release on the San Diego County Water Authority’s website:
“California sources nearly one-third of its power from renewables, mainly solar and wind. The target for renewable energy in California is 60% by 2030. Such a major shift to renewables will require new kinds of investments, markets, and business practices. Electric grids need to be more flexible; new kinds of power supplies will help deliver energy flexibility when needed; and new pricing systems are needed to send clear signals to developers and financial markets that these projects need to move forward.
Pumped energy storage projects are a major piece of the solution. They are designed to store excess renewable energy from solar and wind during the day, and then discharge that energy when energy use increases in the evening and renewable energy is not available.
Why It Matters
California has one of the strongest renewable portfolio standards (RPS) goals in the United States – to reach 100% of retail sales coming from renewables by 2045. The state is the tip of the spear for regions who are trying to integrate renewables in a cost-effective, reliable, and swift manner.
As the electric power blackouts of 2020 demonstrated, that aggressive goal is being met by the stark reality facing grid operators who must balance load and demand on a 5-minute basis.
In recent years, grid operators have struggled with the “duck curve” with solar generation peaking in the middle of the day and receding at the same time load increases for the evening residential load. The end result is a daily 8-GW ramp in less than three hours that cannot be reliably filled with solar or wind.
The California grid will need roughly 50 GW of long-duration storage by 2050. In 2019, backers of the proposed San Vicente Energy Storage Facility released a whitepaper detailing the value this facility would bring to Southern California. The paper explained how the facility will be critical to serving both the morning and evening peak, while also lowering costs by absorbing excess solar in the middle of the day. Two years later, that need is critical as ever.
What’s Next? Still a Long Way to Go
While the $18 million in funding is a positive development, the proposed project still needs to be licensed by the Federal Energy Regulatory Commission (FERC) — a process that can take 3 years.
In 2018, Congress and FERC adopted a 2-year licensing process for closed loop pumped storage and for adding power components to existing dams. However, that expedited process requires the applicant to come to the Commission with a near completed application. So, rather than streamlining the permitting, the 2018 law merely truncated the same laborious process into a much quicker time frame. This is why no proposed pumped-storage projects have successfully applied for the expedited licensing.
All this means that the San Vicente Energy Storage project still has many hurdles ahead.
Yet, the $18 million from the state means the project can proceed into the next phase. “This $18 million in State funding is the jump start we needed for the City of San Diego and the San Diego County Water Authority to move forward with the environmental permitting and licensing that is needed,” said Gary Bousquet, Deputy Director of Engineering at San Diego County Water Authority.
At the National Hydropower Association (NHA), we see this project, and many others like it, will bring significant value to a California grid that is starving for long-duration storage.