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Morro Bay could become home to the largest electric battery system in the world if a project being proposed by the owners of the Morro Bay Power Plant is built, bringing a windfall of tax monies to a city left financially reeling due to the coronavirus pandemic response and near shutdown of the tourism economy.
Representatives from Vistra Energy made a presentation to the City Council Jan. 26, proposed a massive, 22-acre complex with three, 40-foot tall buildings, each some 91,000 square feet.
For comparison, Spencer’s Market in Morro Bay is 15,000 s.f., and the Family Dollar and Dollar Tree stores share a 19,000 s.f. space.
Vistra spokesman, Brad Watson, told the Council, “This is a major infrastructure project.”
Indeed, the company’s recently completed “Battery Energy Storage System” or BESS project at the Moss Landing Power Plant at 300 megawatts capacity is currently the largest such facility in the world.
The project being proposed for Morro Bay is 600MW and would double Moss Landing’s capacity, though Vistra is also trying to build another 100MW BESS in Moss Landing.
Their plan is to get the Morro Bay BESS online by 2024 to coincide with the closure of the Unit 1 reactor at the Diablo Canyon Nuclear Plant. To do that, Watson said, “We need to start on the property next year.”
That may be easier said than done, as the project, which is being sited for the northwest side of the 107-acre power plant property, roughly covers the plant’s former tank farm area.
The plant had five, giant fuel storage tanks grouped on that area, but those were removed years ago when the now-defunct Duke Energy North America owned the plant. It’s the same spot where Duke had tried to get permits to install a 1,200 MW combined-cycle, natural gas-powered plant.
Though Duke spent over 7 years and an estimated $35 million, it never did get a permit from the State to build its project. Duke eventually sold the plant and it’s changed hands a couple of times through corporate mergers before being shuttered forever in 2014. The plant property was up for sale for the past several years.
Now Vistra, which absorbed Dynegy in 2018, is in charge and this company is making great strides across the nation and in Canada and Japan, turning towards renewable energy and sustainable sources, of which battery storage is essential.
Eric Cherness, who assisted Watson in their online presentation, noted that BESS projects increase the reliability of energy sources like solar and wind. Those renewable means of producing electricity have drawbacks in that they can only produce energy when the sun shines or the wind blows and often produce energy when demand is low. With a BESS, that energy can be briefly stored and fed into the power grid when needed.
The company’s presentation said the project would have 2,400MWh of capacity in 180,000 lithium-ion batteries. The batteries are grouped into “racks” and enclosed inside the buildings, each with its own room. The three buildings being proposed total 273,000 s.f. Again as a comparison, the parking lot at Spencer’s is about 170,000 s.f.
Each building will have extensive fire suppression systems, as Lithium-ion batteries have been known to overheat and catch fire.
Vistra estimates the project to cost $500-$600 million and will result in a value of some $450 million for property tax purposes.
That means they expect the BESS to generate about $4.8 million a year, of which the City of Morro Bay would get 10.26%, or some $490,000 a year. That would be a welcomed boost for the City, which has spent down its reserve fund to bridge the gap in funding caused by the pandemic response.
City Manager Scott Collins told Estero Bay News that as he understands it, the taxes are calculated through a complex formula that ties in with the amount of energy it handles. “It’s a moving target,” he said. “But it’s somewhere in the $400,000 range.”
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