ESCONDIDO, Calif. — In Southern California in the fall of 2015, a giant natural gas leak not only caused one of the worst environmental disasters in the nation’s history, it also knocked out a critical fuel source for regional power plants.
Energy regulators needed a quick fix.
But rather than sticking with gas, they turned to a technology more closely associated with flashlights: batteries. They freed up the utilities to start installing batteries — and lots of them.
It is a solution that’s audacious and risky. The idea is that the batteries can store electricity during daylight hours (when the state’s many solar panels are flooding the grid with power), then release it as demand peaks (early evening, when people get home). In effect, the rechargeable batteries are like an on-demand power plant, and, in theory, able to replace an actual plant.
Utilities have been studying batteries nationwide. But none have moved ahead with the gusto of those in Southern California.
This idea has far-reaching potential. But the challenge of storing electricity has vexed engineers, researchers, policy makers and entrepreneurs for centuries. Even as countless technologies have raced ahead, batteries haven’t yet fulfilled their promise.
And the most powerful new designs come with their own risks, such as fire or explosion if poorly made or maintained. It’s the same problem that forced Samsung to recall 2.5 million Galaxy Note 7 smartphones in September because of fire risk.
After racing for months, engineers here in California have brought three energy-storage sites close to completion to begin serving the Southern California electric grid within the next month. They are made up of thousands of oversize versions of the lithium-ion batteries now widely used in smartphones, laptop computers and other digital devices.
One of the installations, at a San Diego Gas & Electric operations center surrounded by industrial parks in Escondido, Calif., 30 miles north of San Diego, will be the largest of its kind in the world, developers say. It represents the most crucial test yet of an energy-storage technology that many experts see as fundamental to a clean-energy future.
Here, about 130 miles southeast of Aliso Canyon, the site of the immense gas leak in 2015 — the global-warming equivalent of operating about 1.7 million cars over the course of a year — 19,000 battery modules the size of a kitchen drawer are being wired together in racks. They will operate out of two dozen beige, 640-square-foot trailers.
Made by Samsung, the batteries are meant to store enough energy to serve as a backup in cases of fuel shortages. They are also designed to absorb low-cost energy, particularly solar power, during the day and feed it back to the grid after dusk. They in effect can fill in for the decades-old gas-fired plants that might lack the fuel to fully operate because of the disastrous leak.
“California is giving batteries the opportunity to show what they can do,” said Andrés Gluski, chief executive of AES, which is installing the storage systems.
AES is installing a smaller array for the electric utility in El Cajon, a suburb east of San Diego. And separately Tesla, the company perhaps better known for its electric cars, has built an array for a different utility on the grid, Southern California Edison, near Chino, Calif.
The stakes are high for both energy storage companies. If their projects struggle or fail, it could jeopardize not only the stability of Southern California’s grid but also interest in the technology over all.
After a smaller, but pioneering battery project at a wind farm on Oahu in Hawaii went up in flames in 2012, investment in battery storage all but dried up for a few years. That installation, which used 12,000 lead-acid batteries to help even out fluctuations in the power flow, caught fire three times in its first 18 months of operation. The storage developer, Xtreme, eventually went bankrupt. The wind farm turned to a different technology to smooth its output.
Keeping a close eye on the Southern California battery efforts is Susan Kennedy, who helped shepherd California’s energy policy for more than a decade as a state utility regulator and high-level operative for two governors — Gray Davis, a Democrat, and Arnold Schwarzenegger, a Republican. She now runs an energy storage start-up, one not involved in the battery-building response to the Aliso Canyon gas leak.
“The moment one fails,” Ms. Kennedy said of the big bet on batteries, “they won’t build any more.”
As soon as AES’s chief executive, Mr. Gluski, learned last June that San Diego Gas & Electric had awarded AES the big battery contract, he leapt out of his chair and interrupted a meeting in his board room at the company’s headquarters in Arlington, Va. As employees watched in astonishment, he barreled down two flights of stairs, grabbed a mallet and, with a ceremonial flourish, banged a gong that one of his executives kept on hand for big news.
Mr. Gluski had not had much occasion to celebrate since he had taken the AES reins five years earlier. The company was struggling with debt and trying to coax profits from far-flung fossil-fuel projects around the developing world that are buffeted by instability in politics, currency and commodity prices.
His first steps included an austerity program in which he gave up many of his own executive perks: No more country-club membership. No more corporate Audi A8, with driver. But the more far-reaching part of his plan would be AES’s battery division, which was then fledgling. The unit had roots in two midlevel executives who had been speculating about a Jetsons-like future over beers.
Those two men, John Zahurancik, a science fiction fan, and Chris Shelton, a former physics teacher, had started talking about batteries a decade ago, before electric cars became fashionable or even feasible. In 2006, Mr. Shelton had come across a professor’s paper that predicted a future dominated by electric cars that, when parked, could be connected to the power grid so their batteries could act as storage devices to help balance electricity demand.
He and Mr. Zahurancik bounced the idea off some AES colleagues, who said it was at least theoretically feasible. So the two continued their bull sessions but decided that stationary battery arrays may make more sense than relying on electric cars.
At the time, lithium-based batteries, the standard in consumer products, were widely in use in the transportation and power tool industries, but no one had paired them with the technology necessary to serve the power grid.
Earlier grid-scale experiments with lead-acid and other types of batteries worked only for a year or two before conking out. A different technology, “flow batteries,” which use chemicals dissolved in liquids in tanks, were considered even more experimental.
But lithium packs more energy per weight than other metals, offering the promise of greater energy density and longevity. The trick would be to figure out how to harness all that power, which creates heat, while avoiding the fires such batteries have caused in any number of vehicles and gadgets, including Teslas, HP computers, hoverboards and, most recently, Samsung Galaxy Note 7s.
The two hit upon a design and persuaded executives to begin a pilot project in 2008. That eventually led to the first commercial lithium-ion battery on a grid. Mr. Zahurancik, who owns the gong, is now president of AES Energy Storage. Mr. Shelton is now the company’s vice president and chief technology officer.
AES does not actually make its batteries but buys them, along with other equipment, from manufacturers like Samsung, LG Chem and Panasonic. It designs and assembles the arrays, stacking the boxy batteries into racks inside locker-like containers.
In Escondido, where local radio stations still carry public service announcements about the natural-gas shortage, the AES battery packs are being installed at a critical spot on the regional electrical grid: the place where the giant wires from power plants and wind and solar arrays connect to the network of local wires.
The batteries are intended to relieve the pressure on the system. Mainly, they will serve as a kind of sponge, soaking up excess or low-cost solar energy during the day and then squeezing it back into the grid in the evening, when demand surges as the sun sets. There is enough capacity in the containers full of batteries to power about 20,000 homes for four hours.
The idea is that they help the utility lessen its dependence on the type of natural gas plants known as “peakers,” which can turn on and off quickly to meet sudden peaks of demand but are generally used only for short periods and at great expense. And peakers, by burning fossil fuel, are also at odds with California’s green-energy goals.
The project is also being watched closely by advocates for renewable energy. The reason: If utility-scale battery installations work as designed, they would help wind or solar generators to act more like conventional power plants by working steadily even when the sun isn’t shining or the wind isn’t blowing.
“Energy storage is really the tool to do renewables integration for a utility infrastructure company like us,” said Josh Gerber, advanced technology integration manager of SDG&E, as workers smoothed the thigh-high concrete pads that support the containers at the Escondido site. “Without it, you have more risk that the variability of renewables is going to cause reliability problems.”
Under the contract, AES is responsible for making sure the batteries perform for 10 years, after which SDG&E will take over. One potential downside is that if the batteries are fully charged and discharged each day, they could degrade more quickly.
The executives involved expressed confidence in the design and reliability, despite Samsung’s recent smartphone problems. Not only are these batteries a different configuration than the smartphone units, executives said, but the larger footprint allows for the inclusion of sophisticated monitoring as well as industrial safety and cooling and ventilation equipment.
The project, along with the smaller array AES has installed in El Cajon, could provide the proof-of-concept leap Mr. Gluski has been striving for.
AES has a deal for an even bigger installation in a $1 billion project in Long Beach with Southern California Edison that is not part of the Aliso Canyon remediation effort; it is projected to go online by the end of 2020. The electric company plans to use batteries as part of a plan to replace an aging gas plant along the San Gabriel River.
Long term, Mr. Gluski plans to shift the company’s power-generation portfolio — still heavily based on coal and natural gas — toward more renewable energy. He sees the storage systems as vital components in turning solar and wind energy into a dominant power source in the parts of Latin America, Asia and Africa where AES is active.
Whatever progress it has made, AES still has its share of problems, with $20 billion in debt and a stock price less than one-fifth the value that it had at the start of the century. It faces wary, if not outright skeptical, treatment by Wall Street utility analysts and energy experts, who say the technology AES is peddling on such a large scale in California remains untested and financially risky.
“The problem comes if there is a hiccup with the battery storage business in California,” said Charles Fishman, a utilities analyst at Morningstar. “You don’t have the deep-pocket parent that can push money to it and keep it out of trouble.”
Despite all the battery activity in California, executives around the utility industry remain cautious. “The reason we don’t have widespread batteries on our system is because it is not cost-effective for us,” said Alice Jackson, vice president for strategic revenue initiatives at Xcel, a giant electricity and gas utility serving eight Western and Midwestern states.
Xcel has been testing batteries about as long as AES, but almost exclusively in small pilots. “It’s fair to say we don’t have long-range experience with this technology to say that it is perfect, or a nirvana,” Ms. Jackson said. “It’s something we’ll observe as California goes through its experience.”
California’s latest experiment with batteries is but the latest bout in the state’s long struggle to match its energy needs with its environmental sensibilities.
In the early 2000s, after market deregulation and Enron’s notorious manipulation of gas supplies led to blackouts and financial instability among the power companies, state officials decided to lessen reliance on natural gas by encouraging the development of wind and solar.
Under Mr. Schwarzenegger, who was governor until 2011, officials pushed through a raft of overlapping regulations that created a boom in renewables, especially solar. But that upended the traditional patterns of supply and demand, making the overall energy system technically and economically difficult to manage.
Batteries were the logical solution. But the technology wasn’t fully developed and was still too expensive. In order for companies to make the necessary investments, they needed a signal that there would be a big enough market for their products.
So in 2010, the state approved one of the first energy-storage mandates, ultimately requiring utilities to install some form of storage equipment in their territories. That set off a flurry of new investment and innovation and, after the sudden closure of the San Onofre nuclear plant on the coast in northwest San Diego County in 2012 when a steam generator tube sprung a leak, new contracts for battery installations.
But the Aliso Canyon accident, which began on Oct. 23, 2015, when the Southern California Gas Company first detected the leak, put that process on fast-forward. The noxious-smelling gas and intermittent oily mist that spewed forth over almost four months traveled into the surrounding neighborhoods on the strong winds that sweep down from the Santa Susana Mountains. At the same time, it forced the battery strategy into its most high-profile test yet.
Now it’s showtime, and the pressure to succeed is high all around. For AES, it could signify an important step for a long-troubled conventional-energy relic that is seeking to revitalize itself as a powerhouse in battery storage and other advanced technologies.
For clean-energy advocates — including residents of the Porter Ranch section of Los Angeles, so picture-perfect that Steven Spielberg chose it as the setting for the 1982 movie “E.T.,” but where many still complain of the rashes, headaches and other debilitating symptoms that drove thousands from their homes during the leak — it could be a powerful weapon in the fight to keep the gas depot closed.
But the pressure may be highest for the Southern California utilities, their reputations still blackened by waves of forced electricity cuts that followed the Enron debacle. No one wants to contemplate a repeat of that chapter, when blackouts affected factories and even some hospitals.
“When the power goes out, people die,” said Ms. Kennedy, the former state official. “Failure is not an option here on any level.”
Correction: January 14, 2017
An earlier version of this article misstated the location of AES headquarters. It is in Arlington, Va., not Alexandria.
Correction: January 16, 2017
An earlier version of this article misstated the status of an array near Chino, Calif., for the utility Southern California Edison. It has already been built by Tesla.