Ignis Proposes 362MWh Battery Storage Project in California Following Legal Settlement

The US arm of Spain’s Ignis has submitted an application to the California Energy Commission (CEC) for the development of a 362MWh battery energy storage system (BESS) in Alameda County. This application, filed on February 14, 2025, was facilitated by the consultancy firm Jacobs on behalf of Ignis. The filing comes after months of legal disputes in New York’s Supreme Court between Ignis and its previous development partner, Salka Energy, each accusing the other of contractual breaches.

Details of the Project

The Viracocha Hill project, as detailed in the application, is designed to have a capacity of 90.7MW and will utilize 108 Tesla Megapack 2XL units. This number is set to increase to 144 units by the end of the project’s lifespan to ensure capacity retention. The project will connect to the grid via Pacific Gas & Electric’s (PG&E) Kelso-Tesla 230kV tap under a California Independent System Operator (CAISO) interconnection agreement. Ignis aims to start construction by the second quarter of 2026, with commercial operations expected to commence in the third quarter of 2027.

Background of the Legal Dispute

The Viracocha Hill project was created by merging two inactive wind farm projects that Salka acquired in 2021 and 2022 from Clearway Energy and sPower, respectively. After acquiring the Clearway project, Salka quickly sold it to Ignis and signed a development services agreement (DSA) to provide ongoing support for a monthly fee, along with a profit-sharing arrangement. This agreement was later amended to incorporate the second project acquired from sPower.

A significant amendment to the DSA occurred in the third quarter of 2022, allowing the addition of a BESS to the project, which Salka claimed was crucial for the project’s economics and profitability. The DSA included a provision that prevented Ignis from advancing the BESS development without consulting Salka, to safeguard Salka’s interests.

Breakdown of the Legal Proceedings

Salka engaged Jacobs in August 2023 to handle permitting work for the BESS, but Ignis allegedly stalled the agreement by demanding a new budget. This led to a slowdown in the project’s development. Relations between the companies deteriorated in fall 2023, as Salka had to cover contractor payments on Ignis’s behalf. In February 2024, Ignis entered into a power purchase agreement for the BESS with Ava Community Energy, which Salka claimed violated their agreement by proceeding without its consent.

By May 2024, Salka filed a complaint against Ignis, asserting that it had breached the DSA. Shortly thereafter, Ignis countered with its own lawsuit against Salka for alleged damages due to contractual breaches and negligence. Ignis claimed it had invested $16 million into the project without receiving any value in return, highlighting ongoing issues such as unforeseen costs and scheduling difficulties.

Both parties sought temporary injunctions against each other, which were granted, requiring them to maintain their obligations under the DSA. Ultimately, on October 20, 2024, they reached a settlement, resolving their legal issues.

CEC’s Oversight Under Review

Ignis’s application arrives amid growing scrutiny of the CEC’s authority over BESS projects exceeding 200MWh, particularly in light of recent incidents such as the fire at Moss Landing. A new bill, AB 303, aims to transfer regulatory authority from the CEC to local regulatory bodies for such projects, which could impact ongoing applications.

Conclusion

As Ignis moves forward with the Viracocha Hill project, the implications of the legal disputes and regulatory changes remain to be seen. The project is positioned to contribute significantly to California’s energy storage capacity as the state continues to advance its renewable energy goals.