Deal details: Under the 15-year agreement, the entire 504 MWh storage capacity of the facility will be contracted to the utility division of Edison International. The facility, located in Kern County, California, is currently under development, with commercial operation scheduled for early 2024. Once complete, the facility will be LRE’s first standalone BESS and will expand its growing renewable energy portfolio to include approximately 1 GWh of operating storage capacity.
Deal rationale: The transaction acts as a revenue guarantee for Leeward, providing a stable income stream for their project prior to construction. By contracting the BESS capacity to a utility, Leeward capitalizes on the profitable revenue opportunities of energy storage projects, including auxiliary service participation. This model offers battery developers a blueprint for efficiently securing project financing and expanding storage capacities while avoiding direct exposure to market fluctuations.
For Southern California Edison, the agreement will help to bolster grid reliability and resiliency in California while minimizing power curtailment during peak production hours. This PPA expands upon SCE's existing partnerships with AES, Calpine Corp, LS Power, and Falcon Energy to develop a combined 497 MW/1,988 MWh of BESS capacity. These projects are targeted for completion in 2023 and 2024. By increasing its contracted energy storage capacity, the company contributes to its allocated portion of the 11.5 GW of clean energy capacity mandated by the California Public Utilities Commission (CPUC) for load-serving entities in the state, as outlined in the June 2021 order.
The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.