Two private equity firms — EnCap Investments and Yorktown Partners — have launched a company to develop utility-scale energy storage facilities.
With an initial focus on markets in California and the Electric Reliability Council of Texas, Broad Reach Power intends to have 2,000 megawatts of operating battery storage and linked renewable or thermal capacity by 2021, Steve Vavrik, company chief executive officer, said in an interview.
The push into battery storage comes amid an ongoing change in the U.S. resource mix, with more and more intermittent wind and solar coming onto the grid, according to Vavrik.
“There’s a new era, a new chapter beginning where reliability will be much more of a concern for utilities [and] load-serving entities,” Vavrik said.
In California, reliability issues can be seen in the state’s growing Duck Curve, a chart depicting escalating end-of-day ramps as natural gas-fired generators come online to take the place of fading solar output, and in Texas’ volatile electricity prices driven by fluctuations in wind production, according to Vavrik, who previously worked for GE, Enron, First Wind, SunPower and Apex Clean Energy.
Houston-based Broad Reach plans to develop projects where there is a need for flexible, fast-responding generation.
Essentially, Broad Reach aims to invest in risk-management services energy storage can offer utilities and generators, according to Vavrik.
The company, for example, intends to respond to utility requests for proposals, partly to supply load-following and ancillary services, he said. Utilities can also use energy storage to defer transmission investments, Vavrik said.
Wind and solar owners can use storage to smooth the output of their facilities and shift deliveries to when power is most needed, he said.
Broad Reach plans to integrate its battery facilities with existing wind, solar or thermal power plants to make the generating assets more efficient.
The company, for example, is considering buying a power plant in California and adding battery storage there, Vavrik said.
In ERCOT, Broad Reach intends to use batteries to provide risk management to retail providers and public power utilities, he said. The company is working on stand-alone battery projects ranging from 10 megawatts to 400 MW, according to Vavrik.
Broad Reach said it recently bought a portfolio of solar projects in Montana and Wyoming and is discussing several other initial opportunities.
One of those projects — called Broadview Solar — includes solar photovoltaic panels totaling 160 MW plus a 50-MW battery system that could deliver electricity for four hours before needing to be recharged.
Broad Reach has asked the Federal Energy Regulatory Commission to certify the project as a qualifying facility under the Public Utility Regulatory Policies Act. The company contends that after using inverters to switch the facility’s electricity from direct current to alternating current, the project will connect to the grid at 80 MW, the maximum size allowed under PURPA.
Broad Reach investor eyes ‘energy transition’ opportunities
EnCap has raised oil and natural gas investment funds totaling about $37 billion while Yorktown Partners has raised $9 billion.
Although EnCap has focused on fossil fueled sectors, the company is looking for investments to take advantage of the shifting generation mix in the United States.
The company’s “energy transition team” is focused on opportunities in management teams and projects involving renewable technologies, battery storage and service businesses that engineer, procure and manage renewable and battery projects for third parties.
The transition team includes Jim Hughes, former FirstSolar chief executive officer, Tim Rebhorn, previously a senior FirstSolar executive, Shawn Cumberland, previously the head of Quinbrook Infrastructure Partners North American operations, and Kellie Metcalf, who was a senior director at Pattern Development.