LS Power brings in the super batteries

Climate Economy

LS Power brings in the super batteries

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California’s Gateway project is ushering in the future of energy storage and making the Wild West the new green frontier

In the far southwest corner of the United States, with almost no fanfare, an obscure energy industry player has unveiled the largest battery power storage facility in the world.

The Gateway Power Storage Project in San Diego county opened in June and expanded to a whopping 250 MW in August – easily surpassing the previous title holder, the 150 MW capacity facility operated by electric car titan Tesla in South Australia. 

“This is a key piece in scaling up wind and solar power,” says Daniel Kirschen, Close Professor of Electrical and Computer Engineering at University of Washington. “As we have more renewables, we are going to need more batteries with longer duration.” 

If these projects seem far-flung and far-fetched, they may not be for long. Monster battery farms could become commonplace across the U.S. as communities pursue reliable, clean energy. One industry analyst predicts that California alone will need storage facilities with at least 60 times more capacity (or 15,000 MW) for the state to reach its carbon-cutting goal.

If these projects seem far-flung and far-fetched, they may not be for long.

“We are at a turning point for storage on our system,” stated Steve Berberich, president and CEO of the California Independent System Operator (CAISO), in a press release.

Who is LS Power?

The developer leading the pack with the Gateway project is hardly a household name. LS Power is a private investment and power grid development company that is dwarfed by many competitors in the industry.

The company was established in 1990 by Mikhail (Mike) Segal, who emigrated from the USSR in 1978 after working for the department of energy in the former Soviet Union. According to LS Power, the company has raised $45 billion for investments in U.S. energy infrastructure since then.

Most of their power generating operations are natural gas plants acquired from legacy players including Duke and Dynegy. They also own at least 10 power transmission projects

But its recent investments indicate the company is going all in on battery farms, with a focus on California.

In 2018, LS Power launched a 40 MW battery storage project at Vista, CA. It was the largest battery in the U.S. until Gateway’s launch.  

 

 

LS has several more large grid-scale battery storage projects in the works including the Diablo Energy Storage facility in Pittsburg, CA (200 MW) and LeConte Energy Storage facility in Calexico, CA (125 MW).

LS Power’s recent investments indicate the company is going all in on battery farms, with a focus on California.

The company’s most ambitious battery storage project — with 316 MW capacity — is underway in Queen’s, New York. The Ravenswood Battery Storage Project dovetails with goals set under the state’s Green New Deal by providing emissions-free power during peak demand.

LS Power already owns the 2480 MW Ravenswood generating facility serving a vast swath of New York City, which it acquired in 2017 as part of a concerted push into the regional energy market.

Monster battery storage trending

Energy storage allows operators to balance market supply with demand as both are constantly fluctuating. It is also critical for integrating renewable power sources — collecting surplus energy from the sun or wind when it is abundant and dispensing it to consumers when it is needed.  

As usual, California is leading the way. Sacramento has set an ambitious renewable energy goal: to get 100 percent of the state’s power from carbon-free resources by 2045. The plan includes retiring natural gas-fired plants and using energy from battery storage to fill the gap. 

So far, energy storage for the power grid is dominated by “pumped hydro” technology, which uses surplus energy to pump water up to a reservoir, then allows the water to flow down, generating energy, when demand for power is higher. But pump edhydro projects are expensive and they tend to wreak havoc on natural landscapes, wildlife and groundwater. Ideal sites are hard to come by.

Large-scale lithium-ion battery storage projects present a new alternative — and lots of competition.

Gateway, and similar large-scale lithium-ion battery storage projects, present a new alternative — and lots of competition. In fact, the Gateway project will not be the largest for long.

Texas-based Vistra Corp. (NYSE: VST) is now expanding a battery storage system at Moss Landing, just outside of Monterey, CA to 400 MW battery energy storage system.

Meanwhile, Tesla is working with Pacific Gas and Electric on a battery storage facility — also located at Moss Landing — with a capacity of 182.5 MW. Florida Power and Light Co. is building a 409 MW battery storage facility, the largest on the East Coast.

Rewards and risks

Since LS Power is privately held, details of its business are not readily available. For the Gateway project, it contracted NEC Energy Solutions to build the system and integrate it with the independent grid operator CAISO, using battery cells produced by South Korean chemical giant LG Chem.

Unlike Tesla, which claims its Moss Landing facility will have storage for up to four hours, LS has not revealed how many hours Gateway can pump out energy at its 250 MW-hour capacity. Nor has the company disclosed how much it invested in the Gateway project and its projected revenue.

According to Kirschen (the professor at the University of Washington) there are several ways power storage operators can make money. Given the massive size of the project, he says LS is likely banking on arbitrage — charging when the price for power is low (or negative) and discharging it during peak hours when the price is high. A lucrative site would be one where there are large swings in price.

The risk involved in building a battery storage facility as large as Gateway lies more in the coordination than in the technology, says Kirschen.

“Going to 250 MW is a big step because it’s not a single technology. It’s a combination of technologies.”

“The basic technology exists, but it’s putting it all together and utilities learning how to build those (systems) that is the challenge,” he adds. “Going to 250 MW is a big step because it’s not a single technology. It’s a combination of technologies.”

Likewise, there are many factors that determine the success of grid-scale battery storage projects. Among the risks are lack of clear rules for their integration in most markets, rapidly changing technology and uncertainty over battery lifespans. With these pioneering projects, LS Power and its rivals are placing big bets that they can keep the lights on, the air clean and the profit margin healthy.

Written by

Kari Huus

Kari Huus is a freelance writer based in Seattle. She was a reporter for MSNBC.com from 1996-2014, with stints covering international business, foreign policy, and national affairs. Earlier, she reported on China for the Far Eastern Economic Review in Hong Kong, and Newsweek in Beijing. Since 2015, she has worked as managing editor for the website Money Talks News.