Energy company could build 200-megawatt battery storage facility in Morro Bay

Vistra Energy has filed a plan to build a four-acre, 200-megawatt battery storage facility in Morro Bay just behind the company’s mothball power plant and next to the big PG&E substation there.

City community development Director Scot Graham says the Vistra proposal follows similar storage projects the Houston-based business is building at its power plants in Moss Landing and in Oakland.

The application, filed on Nov. 12, says the Irving, Texas-based company wants to build a new 90,000-square-foot building to house some 60,000 battery modules using lithium ion technology. Vistra also plans to build a new substation to connect to the PG&E station that connects by high voltage transmission lines to the rest of California.

The application says the company expects to be under construction by 2023 after all approvals are met including permits from the city of Morro Bay, San Luis Obispo County, California Coastal Commission and the California Independent System Operator (CAISO), which manages the state’s grid.

In Morro Bay, community meetings on the project are several months away.

Morro Bay energy project

Eric Cherniss, senior director, corporate development and strategy for Vistra Energy, says the decision to site the energy project in Morro Bay allows the battery units to connect to both the existing grid and by transmission lines to renewable energy projects to the east and the west. That’s where offshore wind power could come online in the future including the big 1,000-megawatt Trident Winds project off of Morro Bay.

“We have multiple options to receive, store and distribute power and provide reliability for the grid as well,” Cherniss said.

For example, batteries can absorb solar energy when rates are low and sunshine is plentiful. Then, from 4 p.m. to 9 p.m., batteries can be activated so customers do not have to pay for the high-priced electricity.

Battery energy projects can help extend renewable power by storing solar energy generated in daylight hours and deliver that energy back to the grid after the sun goes down and the need for power is great. That is where CAISO grid management comes in.

Cherniss said the decision to build a new large energy storage building for the battery units allows Vistra some flexibility to make plans to develop the existing vacant power plant into a mixed-use facility. He hinted that the height of the building might be attractive to some developers.

To that end Cherniss says the company has applied to the county for a lot line adjustment that could allow the battery project to be separated from the rest of the 107-acre Vistra property that includes those iconic 450-foot-tall tall stacks.

The Morro Bay power plant was commissioned in 1953 and decommissioned in 2014. It has not generated electricity since then, and there are no plans to resurrect it.

It will not be connected to this new battery facility.

Company retires fossil fuel power plants

Since its $1.7 billion merger with Dynegy in April 2018, Vistra has been backpedaling on fossil fuel generation including coal and toward renewables.

Since 2010, Vistra claims that itand its predecessor companies have retired, or announced plans to retire nearly 13 gigawatts of fossil generation — including 14 coal generation plants and 3 natural gas generation plants —while opening multiple solar and battery energy projects.

Vistra’s Moss Landing battery project is 300 megawatts. A second Tesla battery storage project at the same site takes it to 570 megawatts, making it the largest in the world.The big project is under construction now and should be operating a year from today.

In California, Vistra is retiring so called gas-fired peaker plants that have provided standby emergency power needs but are considered a dirty source of energy.

Recently, Vistra signed an agreement with East Bay Community Energy, a community energy provider for Alameda County.

It will replace a jet-fuel peaker in downtown Oakland with a 20-megawatt, four-hour-duration lithium ion battery plant. Unlike solar and wind, this energy source can dispatch on command.

California is demanding more battery energy for the grid requiring the state’s three investor-owned utilities to buy 1,325 megawatts of storage by the end of 2020.

It’s not just the investor utilities but also community-based aggregators such as Monterey Bay Community Power that demand more energy as long as it is carbon free. That 11-agency member group includes the town of Morro Bay.

As of September, Monterey Bay Community Power (MBCP) is looking to acquire 10 to 100 megawatts of front of the meter battery storage capacity and discharged energy over a two-hour to eight-hour period.

Ina news release, MBCP noted in a Sept. 13 request for offers that the storage capacity and discharged energy is being sought in order to satisfy a projected long-term need for capacity and energy delivery beginning in 2021.

Vistra’s Morro Bay project is expected to start up after that date.

Adding to the potential demand are more calls for back-up systems after millions of Californians underwent days-long blackouts under the fire-prevention power outage plan of utility Pacific Gas & Electric.

Tom Habashi, CEO of Monterey Bay Community Power, says storage will help with the state’s renewable energy problem.

“The bottom line is, if we are to further reduce our carbon emissions in a significant way, we must reduce our need for natural gas and other fossil fuels during the hours that renewables are not producing electricity through storage,” Habashi said.

Batteries have the potential to capture energy as it’s being produced and discharge it whenever consumer demand is high enough.

As of 2018, California has the goal to meet 100% zero emission electricity by 2045 for its 40 million residents.

Correction: An earlier version of this story misidentified Vistra Energy’s home base. The company is located in Irving, Texas. The error has been corrected.

This story was originally published December 4, 2019 at 4:45 AM.