How to Replace a Nuke Plant? One Utility Leans on Energy Storage

Energy storage technology from a few California startups will help fill a gap left by the closing of the San Onofre nuclear power plant in southern California. It’s a sign of the dramatic changes happening in some pockets of the U.S. electric grid.

Southern California Edison today detailed how it intends to generate enough power to run nearly one million homes with a mix of technologies, including energy efficiency, renewables, and energy storage. The proposal still needs to be approved by state regulators.

One of the big winners is Millbrae, CA-based Stem, which has been contracted to provide 85 megawatts from a distributed collection of refrigerator size batteries in buildings. The company earlier this year lined up $100 million to finance installation of these batteries in commercial customers, such as hotels and office buildings.

Using Stem’s analytics software, the batteries lower electric bills by providing power to a building during peak hours when prices are highest. Those batteries will act as “dispatchable capacity” in the Los Angeles-area grid, earning money from utilities the way natural gas power plants do today.

San Francisco-based Advanced Microgrid Solutions, which has said little publicly until now, was contracted to provide 50 megawatts of capacity. The company, which was founded last year by a former public utility commissioner in California, intends to install and own battery systems at commercial buildings. The batteries will lower peak-hour charges in those buildings and Advanced Microgrid Solutions will also bid services into the wholesale energy markets.

Another “behind the meter” energy storage provider will be Ice Energy Holdings from Glendale, CA. It makes an air conditioner system that makes ice during off-peak hours and draws on the stored cold energy to lower the air-conditioning load during the hottest hours of the day.

Also part of the plan are more conventional energy sources, including a gas-fired power plants and a giant, 100-megawatt battery plant from AES that will act like a traditional power plant in many ways. Efficiency technologies are also part of the mix, including demand response, which lowers power usage at buildings automatically during peak hours.

It’s often said that the utility industry moves slowly and is averse to adopting new technologies. But because California’s state regulators wrote laws to force utilities to consider alternatives to power plants, these smart grid technologies can demonstrate their worth—or lack of—at large scale.

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