CALGARY—Canadian energy company AltaGas Ltd. is moving into the California energy storage market after winning a 10-year storage and power purchase contract with West Coast utility Southern California Edison (SCE).
Under the agreement, AltaGas is required to provide the U.S. electricity supplier with 20 megawatts of continuous power supply over a four-hour period, or 80 MWh of discharging capacity.
To meet its obligations, the company plans to build an approximately $45 million lithium-ion battery system at its existing Pomona natural gas plant east of Los Angeles, Calif. AltaGas said it will contract much of the work, including the installation of the batteries and software control platform to Greensmith Energy Management Systems Inc., but retain overall management of the project.
The Calgary-based company’s President and CEO, David Harris, said the deal is an important next step for the company in the most-populous U.S. state.
“Adding battery storage to our California power portfolio proves the versatility of our asset base and greatly enhances the value of what we can offer the California and Desert Southwest markets through integrated energy centers providing clean reliable electricity,” he said.
Awarded through a SCE Request For Offers, AltaGas will receive fixed monthly payments for the storage capacity while retaining the right to earn additional revenue from the lithium-ion system. Typically, energy storage systems are used to improve the reliability of the electricity grid and offset fluctuations in supply from renewable sources such as wind and solar.
The new storage project is expected to come online by the end of this year and will be one of North America’s largest battery storage projects.