AES has secured $2bn in long-term, non-recourse financing for its 1,384 MW Southland repowering project in Southern California.

The repowering project consists of 1,284 MW of combined cycle gas-fired generation and 100 MW of four-hour duration, battery-based energy storage.

In 2014, Southern California Edison (SCE) awarded 20-year power purchase agreements (PPAs) to AES for the project through a competitive bidding process.

Under the PPAs, AES will sell the total power generated from the project to SCE by collecting a fixed monthly capacity fee. The fee is expected to enable AES to cover fixed operating cost, debt service and return on capital for the Southland repowering project.

Kiewit Power Constructors will construct the gas-fired power plant under a turnkey engineering, procurement and construction (EPC) contract.

While construction on the project has already started at AES’ Huntington Beach site, it is expected to be initiated at its Alamitos site in early July 2017.

The gas-fired facility is expected to begin commercial operations in 2020 and the energy storage plant in 2021.

AES president and chief executive officer Andrés Gluski said: “The $2.3bn Southland repowering project is a key component of our strategic objective of increasing our U.S. Dollar-based, long-term contracted position.

“This project will provide Californians with clean and reliable energy by integrating 1,284 MW of efficient combined cycle natural gas generation with 100 MW of advanced battery-based energy storage.”

Currently, AES has a total of 3,941 MW of gas-fired capacity operating at its three Southland facilities.

In August last year, its subsidiary AES Energy Storage entered into two contracts with San Diego Gas and Electric (SDG&E) to install and commission two energy storage arrays totaling 37.5 MW  at sites in San Diego County, California.

Image: The gas-fired facility is expected to begin commercial operations in 2020. Photo courtesy of alex_ugalek/