Dive Brief:

• Vista Energy has revealed plans to develop a 10 MW, 42 MWh lithium-ion battery at a Texas solar plant. It would be the largest energy storage project in the state so far.
• The battery will be constructed at the Upton 2 Solar Plant, which can produce up to 200 MW during peak hours. Because the project's interconnect is for 180 MW, the battery will absorb some power that would have been lost while also charging with cheaper energy during the night.
• Vistra President and CEO Curtis Morgan said last week that the company is also looking to develop storage at two sites in Pacific Gas and Electric’s territory in California.

Dive Insight:

Vistra, which emerged from the bankruptcy of Energy Future Holdings and recently completed the acquisition of Dynegy, said last year that it will close 4.2 GW of Texas coal capacity. Despite that, the company has said it has no plans to build new plants and will instead look to optimize its remaining fleet.

At a June 12 analyst meeting, Morgan said he is "happy with what we have in conventional generation."

The Upton 2 battery project is expected online in the fourth quarter of this year to soak up renewable energy that would have been wasted.

"With batteries, some of this extra generation will be captured and discharged at peak times," the company explained in a presentation. "Batteries can also be charged from [the] grid at low power prices (i.e., at night) and discharged in the morning."

The project should have attractive returns because of its eligibility for the Investment Tax Credit and bonus depreciation, its ability to use excess solar generation, and energy arbitrage opportunities, Vistra told analysts.

In the near term, batteries are "most likely to threaten investment in new peaking plants ... short duration storage may allow peaking plants to provide non-spinning reserves," Vistra noted in its presentation.

A GTM Research report released in March concluded a third of new gas peaker capacity will be at risk from four-hour energy storage by 2027. The report said 20 GW of new peaking capacity are forecast to come online by 2027.