Dive Brief:
- AES has been awarded 20-year contracts by Southern California Edison (SCE) to provide 1,284 MW of combined cycle gas-fired generation, to be constructed at the company’s existing power plant sites in Huntington Beach and Long Beach, south of Los Angeles.
- The company also agreed to provide 100 MW of interconnected battery-based energy storage, equivalent to 200 MW of flexible energy storage resource.
- SCE signed a slate of new contracts as it seeks to replace the retired San Onofre Nuclear Generating Station and a number of older natural gas-fired power plants that are expected to retire in the near future.
Dive Insight:
SCE said its solicitation was the first time a wide range of resource types were evaluated in a head-to-head competition to meet a specific reliability objective. In addition to five offers with new natural gas generation plants, SCE selected 69 offers from preferred resources and energy storage facilities.
Preferred resources are methods of delivering electricity that are cleaner, or more environmentally sustainable, than traditional resources.
AES said it offered SCE several energy solutions designed to modernize aging power plants and bring the cleanest and best technology to Southern California.
“AES is providing innovative energy solutions designed to meet California’s long-term electricity needs and help to achieve its environmental goals,” said Ken Zagzebski, President of AES US. “By using advanced energy storage and modern combined cycle technology, we are laying the groundwork for a better, smarter and cleaner power grid.”
For the gas-fired capacity, financing agreements are expected to be finalized in 2016, construction is expected to begin in 2017 and commercial operation is scheduled for 2020. For the energy storage capacity, commercial operation is scheduled for 2021.
AES is pursuing permits to build both the gas-fired and energy storage capacity, and will complete the licensing process before financial close. The total cost for these projects is expected to be approximately $1.9 billion.