$600 million battery storage project faces resistance in California

Editor’s note: This story was originally published by Inside climate news. Appears here as part of Climate office cooperation.

By some criteria, 1290 Embarcadero in Morro Bay, California appears to be the best location for a renewable energy storage facility.

This strip of coastal land is home to a power plant that closed ten years ago and its smokestacks still standing. Vistra Corp.’s proposal regarding a project of energy storage in the form of batteries with a capacity of 600 MW on part of the area, includes the recultivation of the entire area and the removal of installations and chimneys in order to prepare the area for future development. And the site’s history as a power plant means it is well-placed for connection to existing transmission lines. Vistra estimates the project will cost between $500 million and $600 million.

“The location is fantastic and there is certainly demand on the California grid,” said Mark McDaniels, vice president of renewables and storage for Vistra, at an April 24 community meeting.

But some residents of the small town on California’s Central Coast disagree and put a measure on the ballot this fall that could impact the future of the project. Opponents of the project say they are concerned about its impact on tourism and the possibility of a fire at the facility, and one resident during the meeting called the proposal a “toxic bomb.”

California recently surpassed 10,000 megawatts of battery capacity, a 1,250% increase from 2019. At one point on April 19, batteries became the largest source of energy for the state’s grid for the first time. And in the inland southern California city of Menifee, a 680-MW storage project replacing an old gas-fired plant will be one of the largest battery reserves in the United States.

During the day, California gets an increasing share of its electricity from the sun, but when Californians come home from work, turn on the lights, the sun sets, creating demand that typically must be met by fossil fuels. Battery storage allows utilities to generate energy through solar panels and windmills when the sun is not shining and there is a calm breeze.

The state will still need nearly 42,000 megawatts of additional energy storage capacity through 2045 to meet its goal of using 100% clean electricity this year. However, in some communities, such as Morro Bay, proposed storage projects have faced fierce opposition.

This local opposition shows the tension between the desire for “really high-quality local permits” and the state’s desire to “really quickly transform the entire electricity grid and quickly deploy energy storage,” which will require quick permitting, said Mariko Geronimo Aydin, co-founder and chief economist for energy at Lumen Energy Strategy, which last year completed an analysis of the state’s battery storage status for the California Public Utilities Commission.

“I think ultimately we want to have both; we don’t want one at the expense of the other,” said Geronimo Aydin.

Vistra Corp. proposed a battery storage project in Morro Bay in 2020, and the project is currently in the draft environmental impact report stage, which will be open to the public until the end of May. The project is pending consideration by the zoning commission and the city council.

But a voting measure proposed by local opposition group Citizens for Estero Bay Preservation would redirect the process by requiring approval from a majority of voters. Last year, the group collected enough signatures — 10 percent of the city’s registered voters — to place Measure A-24 on the ballot.

In 2021, the city changed the zoning of the closed plant site from “Industrial” to “Guest Services/Commercial,” and for the energy storage project to move forward, the city council would have to vote to change the zoning to allow industrial uses again. If approved, the ballot measure would freeze the current zoning of the property and several others in the area, and then require a majority of voters to approve another change to the land’s zoning.

“We felt this type of facility in the center of our tourist area was inappropriate. Our entire city relies on its tourism economy,” said Barry Branin, a member of the group behind the ballot measure.

Instead, he argues that the battery storage project should be built inland, in the agricultural valleys east of Morro Bay, or “somewhere in the middle of the desert” near existing renewable energy projects.

“All the people in the valley like to come to Morro Bay and if I knew there was going to be a battery plant there. . . I wouldn’t want to take my family to Morro Rock,” Branin said. “So why deprive the rest of the country of the ability to use the coast for some economic reason?”

Branin also argues that inland residents use air conditioning more often than coastal residents, so “batteries should be located near users who have air conditioners that really use electricity (at night).”

This argument is at the heart of a key intersection of California’s climate and housing crises: For years, housing development on the generally wealthier coasts has stagnated as residents oppose new development, pushing more Californians inland into communities at greater risk of extreme heat .

Vistara says the project will meet both the state’s and local community’s energy needs.

“Our proposed plan puts ratepayers and residents of Morro Bay first by leveraging pre-existing interconnection infrastructure while allowing for the ultimate zoning and redevelopment of the remaining property to enhance the Embarcadero area and enable greater public access for the benefit of future generations,” it says statement attributed to Claudia Morrow, Vistra’s senior vice president of development.

However, abandoning the construction of large-scale storage facilities in places with existing transmission infrastructure, such as the former Morro Bay power plant, “would lead to higher costs for the entire power system,” said Geronimo Aydin.

Citizens for Estero Bay also cites concerns about potential fires at the battery plant, pointing to the nearby example of Vistra’s Moss Landing in Monterey County, where in September 2022, a faulty smoke detector released water onto battery racks, causing short circuits. The facility was then unavailable for many months.

A community safety report commissioned by Vistra for the Morro Bay project found “no significant risk to the community” and determined that if a fire broke out at the facility while wind carried emissions toward nearby homes, the fire would not release enough toxins to cause significant health risk. However, it did little to allay the concerns of community members who showed up at a recent community meeting holding blue “Yes on Measure A-24” signs.

According to Geronimo Aydin, safety incidents in battery storage facilities are “relatively rare” across the United States, affecting 1 to 2 percent of systems and typically occurring within the first few years of operation. The estimate puts the industry “in the pilot and demonstration phases” and says the industry has since standardized and improved security best practices. However, clearly and accurately communicating potential risks to local residents and other stakeholders remains a major barrier for the industry.

“We’re now at a place where people working in space have a very good understanding of the security risks and how to manage them, but the challenge now is communicating exactly what that risk is, that it’s a manageable risk and how to manage it,” Geronimo said Aydin.

Branin says he is confident the vote will be successful. However, new regulations that allow large battery storage facilities to enter the California Energy Commission (CEC) approval process rather than go through the local process could provide an alternative path for Vistra.

Vistra did not respond to questions about the impact of the vote on the project, and at an April 24 community meeting, a Vistra representative said only that the company was focused on the project and the city’s ongoing process.

“The applicant states that it is committed to the city’s process and we are working with them in good faith on this issue,” said Michael Codron, the city’s interim director of community development. “If the city-led process results in a denial, or if the voting pattern prevents the city council from approving the application, I believe it would use the CEC process.”