Dynegy Pulls Battery Project

Written by Neil Farrell

Neil has been a journalist covering the Estero Bay Area for over 27 years. He’s won numerous journalism awards in several different categories over his career.

July 1, 2020

It looks like plans to have the Morro Bay Power Plant become part of the State’s energy future are questionable, after the owners of the plant pulled plans for a giant battery storage facility.

Dynegy (now a part of Vistra), the plant’s owner, had proposed last November to build a 200-megawatt battery storage facility sited directly behind the main power plant building, in a space next to a Pacific Gas & Electric substation.

The “Battery Energy Storage System” or BESS was purported to be part of the infrastructure that will be needed as the state moves further towards sustainable, carbon-free energy, utilizing sources like wind and solar.

The problem is that wind and solar energy can’t always be counted on when demand is high, and being able to store that energy in battery facilities is a way to match up the supply with the demand.

At the time, Meranda Cohn, Director of Media Relations & Corporate Affairs for Vistra Energy, said, “Customers in California continue to express interest in battery energy storage options, and Vistra Energy believes there will continue to be potential for these projects across the state.

“With that in mind, Vistra has taken the first steps in anticipation of potential future development of a battery system at the company’s retired Morro Bay Power Plant by applying for an interconnection and taking the initial application steps for California Environmental Quality Act permitting.”

But through some apparent difficulties the company said it had with the City, the proposal was withdrawn on Feb. 14. In an email to City Planner Cindy Jacinth, Vistra’s Eric Cherniss said, “I would like to withdraw our application for approval of Coastal Development Permit #CDP19-041 and Conditional Use Permit #CUP19-14 for the proposed 200-megawatt Battery Energy Storage System project located at 1290 Embarcadero Road, Morro Bay, California.

“We enjoyed working with you and the City and wish you all the best.”

Asked by EBN why they pulled the project, Cohen said, “With battery energy storage developments underway in both Moss Landing and Oakland, Vistra would like to extend its battery capabilities at its retired power plant site in Morro Bay — and remains willing to do so.

“Unfortunately, we’ve reached a stalemate with the City of Morro Bay about the long-term ownership of the site impeding development of the property, which could contribute economic activity and tax revenues to the community.”

She added that the company is weighing options. “Under a contractual arrangement with the City,” Cohen said, “Vistra has the opportunity, until at least 2033, to redevelop the property and either build a conventional power plant and/or develop the property for an alternative use, including battery storage.

“We are hopeful that we can reengage with the City on a productive basis in the future to accelerate the development of the property for battery storage and work toward a mutually beneficial use for the remainder of the property.”

EBN asked City Manager Scott Collins what the stalemate with Vistra was. He issued a statement, “The City is willing to proceed with review of a potential battery project at the power plant site, if or when Vistra decides to pursue it.”

On another track, the City wants a utility pipeline easement running from its lift station under the Front Street parking lot, through the power plant to Main Street, as part of its Water Reclamation Facility project’s conveyance system.

Collins said the BESS is a separate issue. “That potential project is unrelated to the easements needed for the WRF,” he said. “The City is committed to continuing good faith negotiations and seeks to reach mutually agreeable resolutions with Vistra on the easements.”

The BESS project would have constructed a 45,000 square foot, 2-story building (90,000 s.f. total floor area); housing 60,000 “battery modules” arrayed in 2,240 “battery racks.”

They’d planned to use either lithium-nickel-manganese-cobalt batteries or lithium-iron-phosphate [lithium-ion] batteries, each with its own room, with fire barriers and safety systems, according to the application.

Morro Bay Fire Chief Steve Knuckles and Fire Marshal Matt Vierra toured a similar battery facility at Dynegy’s Moss Landing Power Plant.

Chief Knuckles told EBN, “Wow. I was really impressed with the technology, with the fire suppression system. I was impressed with the concept of storing the energy from when it’s generated during the day to when it’s needed at night.”

They went to Moss Landing “To make sure it would be safe for our community,” Knuckles said. “We’re not like Moss Landing, which sits out by itself. Our power plant is in the middle of town.”

With lithium-ion batteries there is considerable fire danger and the Moss Landing BESS had about 70,000 fire sprinklers arrayed in groups of about 100, an impressive amount of suppression but also a potential maintenance and inspection issue, as such systems must be tested every year.

“They had triple redundancy with the sprinkler heads,” Chief Knuckles said, adding that he believes that they could make a BESS in Morro Bay work for the community.

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