The Roadhouse Project is one of NEER’s most advanced pipeline projects and has already entered into an offtake agreement with a public utility covering a portion of the project’s capacity and an interconnection agreement with the California Independent System Operator (CAISO).
BESS capacity worth 300 MW/1,200 MWh at a fixed price of US$18.76/kW/month
The proposed Roadhouse Energy Storage project utilizes lithium-ion battery technology and is located on a 20-acre site approximately 1.8 miles south of Champagne in the city of Ontario, California.
NEER has already entered into a power purchase agreement for half of the project capacity with Anaheim Public Utilities (APU), which was approved by the utility’s board of directors at a meeting on April 24, 2024.
Under the terms of the Energy Storage Agreement (ESA), the Roadhouse Project will supply 300 MW/1,200 MWh of energy, capacity and ancillary services to APU for a period of 20 years at a fixed rate of $18.76 per kWh per month.
As stipulated in the agreement, NEER has guaranteed a battery efficiency of 83.1% in the first year, decreasing annually to 78.2% in the final year.
Project aims to cover 60% of APU’s summer peak demand
The Roadhouse project was selected by APU after the utility issued a request for proposals (RFP) in October 2023 to provide renewable energy sources to meet its goal of having 60% renewable energy in its portfolio by 2030.
As detailed in the agenda documents for the April APU meeting, NEER’s Roadhouse proposal for the RFP was evaluated by software and consulting firm Ascend Analytics. As part of the suitability assessment, Ascend considered the project’s location, grid connectivity, distributability, developer experience, and a cost-benefit assessment.
APU will be responsible for distributing the battery, which can meet 60% of the utility’s summer peak demand.
Construction of the APU portion of the project is contractually scheduled to begin on April 1, 2026, with commercial commissioning scheduled for October 1, 2027.
Annual savings of $7 million for the use of additional renewable resources
APU expects the ESA to cost an estimated $71 million annually, including $67.5 million annually to NEER and $3.5 million annually for battery charging. However, when factoring in saved capacity payments to CAISO and the project’s wholesale energy revenues, the utility expects savings of an estimated $7 million annually.
The utility has announced that it will use the savings to “purchase additional renewable energy sources to meet state compliance requirements.”
CAISO Liaison Agreement
The developer has entered into a 300 MW interconnection agreement with CAISO and utility Southern California Edison (SCE) for the Roadhouse project, which will be processed under the system operator’s Cluster 13 process (queue number 1768).
NEER will likely submit a separate interconnection agreement for the remaining 300 MW as part of a later CAISO cluster process. The project will connect to the CAISO grid via SCE’s 230-kV Mira Loma substation.
Rapid BESS deployment in CAISO
Utility-scale BESS facilities, such as NEER’s proposed Roadhouse project, are critical to maintaining California’s electric grid – a fact recently highlighted in a CAISO report on battery storage in July 2024.
CAISO has seen a huge increase in new BESS capacity connected to its grid in recent years, from 500 MW in 2020 to 11.2 GW in June 2024, according to statistics from the latest report.
The report found that batteries account for a significant portion of CAISO’s energy and capacity needs, particularly in the early evening when net load is highest. During the hours between 5 p.m. and 9 p.m. in 2023, batteries met an average of 5.6% of CAISO’s energy needs, up from 2.4% in 2022, according to an identical study conducted by CAISO last year.
