Another Big Battery Storage Deal for California

Tesla and energy storage firm Advanced Microgrid Solutions (AMS) on June 4 announced a deal for 500 MWh of storage capacity using Tesla’s utility-scale Powerpack batteries, which it introduced last month.

A portion of the contract—50 MW, 200 MWh—will go toward meeting AMS’s commitment with Southern California Edison (SCE) under the utility’s procurement deal last November. Then, AMS contracted to supply 50 MW of commercial and industrial storage as part of meeting SCE’s mandate from the California Public Utilities Commission. At the time, AMS did not name a supplier for the batteries.

“Tesla’s focus on performance and design makes them the stand out technology choice for our projects,” said Susan Kennedy, CEO of AMS. “AMS’ projects require intelligent, powerful and scalable energy storage solutions. Tesla’s technology gives us the edge we are looking for.”

AMS said it will aggregate the distributed systems into regional “fleets” that provide fully dispatchable load reduction to utilities. AMS also signed an agreement with Black & Veatch for engineering and construction services.

AMS’ first 10-MW Hybrid-Electric Building Project will be installed in Irvine, about an hour south of Los Angeles, in 2016.

The deal is significant for Tesla as well. Though critics have questioned the cost-efficiency of its home batteries—which have nevertheless garnered far more press attention—the company’s 100-kWh Powerpack batteries are already being deployed and may be poised to make a bigger impact on the market. Tesla is also working with market leader AES Energy Storage on other grid-connected applications.

—Thomas W. Overton JD is a POWER associate editor (@thomas_overton, @POWERmagazine).