Clearway closes financing on 588MWh California BESS - Energy-Storage.news
Clearway closes financing on 588MWh California BESS
Independent power producer (IPP) Clearway Energy has closed US$421 million in financing for the 147MW/588MWh four-hour Rosamund Central lithium-ion Battery Energy Storage System (BESS) in Kern County, California.
Expected to reach commercial operation in 2024, the project will be paired with the already operational 192MW Rosamund Central solar PV project. The energy storage capacity will be purchased by investor-owned utility Southern California Edison under a Resource Adequacy contract, which requires utilities to ensure the reliability of their energy supplies.
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German bank Nord LB acted as coordinating lead arranger for the project financing, and Clearway secured a cash equity close with US climate investment firm HASI.
“Scaling up battery storage is the crucial next step for California’s clean energy transition,” said Steve Ryder, CFO of Clearway Energy Group. “With the successful financing of Rosamond Central BESS, we’re excited to play a role in helping ensure that California’s grid remains reliable and resilient for homes and businesses.”
The storage systems for the Rosamund Central BESS project will be supplied by energy technology firm Wärtsilä, which already has a presence in California; in February it completed a 125MW/250MWh BESS project for REV Renewables. At the start of this year, Clearway bought a 36MW/144MWh solar-plus-storage facility on O’ahu island, Hawaii delivered by Wärtsilä.
In August 2022, Clearway inaugurated the first ever utility-scale solar-plus-storage system on O’ahu, a 39MW/159MWh project. Wärtsilä supplied the battery storage for this site, too.
California’s BESS market has been growing in recent years, in part because of the resource adequacy programme making BESS more attractive and certain for utilities and investors. The California ISO (CAISO) began deploying the scheme in 2004 to keep power supplies reliable and avoid outages in the state.
Related Knowledge Center: Offshore wind energy
Over the next decade, U.S. offshore wind power is expected to grow from a single 30-megawatt wind farm off Rhode Island to more than 2,000 MW of capacity along the Atlantic Seaboard. There are contracts for wind power off the coasts of Massachusetts, Connecticut, New York, Maryland, New Jersey, Rhode Island, and Virginia.
The National Renewable Energy Laboratory has estimated the United States has over 4,000 gigawatts (GW) of offshore wind potential, enough to power the country four times over.
The growth in part being spurred by state solicitations, including in New York, where then-Gov. Andrew Cuomo (D) set a commitment of 9,000 MW of offshore wind by 2035, and in Connecticut, where in June 2021, Gov. Ned Lamont (D) signed legislation authorizing the construction of 2,000 MW of offshore wind by 2030.
The offshore development is also being driven by an investment tax credit set to end in December 2019 and is equal to 12 percent of expenditures. U.S. Sens. Susan Collins (R-Maine) and Tom Carper (D-Del.) have introduced a bill to extend the tax credit for up to eight years.
The Interior Department has held eight competitive lease sales that resulted in 15 offshore wind leases over 1.7 million acres that has the potential for 21 GW of capacity. In February 2022, the Bureau of Ocean Energy Management completed a bidding process that realized $4.37 billion for 488,000 acres across six lease areas in federal waters off New York and New Jersey.
Projects have also been proposed off the Southeast coast, off California and Hawaii, and for the Great Lakes.