Chinese authorities’ attempts to halt the spread of COVID-19 in several cities could delay the completion of a Southern California Edison battery storage project expedited last year as part of Gov. Gavin Newsom’s push to lower the risk of energy shortages.
Officials with Ameresco Inc., the contractor for SCE and parent company Edison International Inc., on April 11 said their Chinese battery supplier has told them it will struggle to meet the manufacturing deadlines laid out in the companies’ agreement. On top of that, various new COVID safety measures may also slow the shipment of some batteries from China to the West Coast.
SCE last fall said it would pull forward about $1 billion in spending plans to move ahead with the construction of storage projects at its Springville, Hinson and Etiwanda substations. (The California Public Utilities Commission in December approved SCE’s and Ameresco’s proposed work worth a little more than $1.2 billion.) Combined, those facilities are to have a capacity of 537.5 MW and had been scheduled to come online Aug. 1. SCE spokesman David Song told T&D World the utility does not yet have a clear view on when the construction might be completed or what other effects any delays might have.
“It is not clear at this point what the impact on costs will be,” Song said. “The standard for cost recovery above the approved level is whether SCE prudently managed the contract, which we are doing.”
In their statement, Ameresco executives said they do not expect battery delays to materially hurt their 2022 results and that other needed work on SCE’s sites is progressing. In addition, they said they are, among other things, talking to officials with the Port of Long Beach about expediting ship and container handling when the batteries have completed their ocean voyage. Ameresco also believes that the supplier’s word of COVID-related challenges constitutes a force majeure event under its SCE contract, which would allow for a delay without Ameresco having to compensate the utility. Song said SCE’s team “has been evaluating Ameresco’s notice and has requested additional information.”
Shares of Edison International (Ticker: EIX) fell 1.6% to $70.80 April 11. They are still up more than 25% over the past six months. Ameresco shares (Ticker: AMRC) fell more than 12% to roughly where they were changing hands in mid-October.
