The California Public Utilities Commission ruled Thursday to authorize PG&E to procure energy storage or preferred resources (such as demand response or distributed solar) to ensure local reliability in areas previously served by the gas plants. The new resources can be individual or aggregated, and must be available by 2019 “if feasible and at a reasonable cost to ratepayers.”
This appears to be the first time a utility will procure energy storage to replace existing gas plants for local capacity needs. In Oxnard, a procurement process has begun to select storage instead of the proposed Puente gas plant. California deployed more than 100 megawatts of storage to shore up capacity after the loss of a major gas storage facility in the southern part of the state.
In this latest decision, though, regulators have chosen storage as a potentially cheaper alternative to maintaining two gas peakers and a 580-megawatt combined cycle plant. This process could become a playbook for phasing out more gas plants that become uneconomical in the future.
“The commission is showing confidence in the idea of preferred resources and energy storage as an alternative to the gas assets that currently provide reliability,” said Katie Ramsey, staff attorney at the Sierra Club, which filed a motion in support of the proposal. “This is a signal that clean resources don’t just compete with new gas plants — they can also perform the same services as existing gas plants.”
The case will test the economics of storage compared to existing gas infrastructure, and whether batteries in practice can provide the full range of services that a large gas plant performs.
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