SMUD Signs 20-Year PPA for 160 MW / 640 MWh Battery Storage at
- Energy Storage Grid Services & Demand Response News Utility-Scale BESS
Marin Holt
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- 5 minutes read
- SMUD and DESRI signed a 20-year PPA for the 160 MW / 640 MWh Dry Creek Energy Storage project at the Rancho Seco nuclear brownfield in Sacramento County, CA.
- The project is co-located with an existing 160 MW solar facility; commercial operation is targeted for September 30, 2027.
- The PPA includes tariff-protection clauses capping SMUD cost exposure if import duties raise component prices after April 1, 2025.
- SMUD was 78% carbon-free as of 2023 and targets 100% carbon-free electricity by 2030.
- Four-hour duration storage qualifies the system as a capacity resource under California Resource Adequacy framework.
Sacramento Municipal Utility District signed a 20-year power purchase agreement with D.E. Shaw Renewable Investments on June 19, 2025, for the 160 MW / 640 MWh Dry Creek Energy Storage project in Sacramento County, California. The battery system is co-located with an existing 160 MW solar installation at the decommissioned Rancho Seco nuclear plant, about 26 miles southeast of Sacramento.
What Is Being Built
D.E. Shaw Renewable Investments began construction at the Rancho Seco site before the PPA was signed. The 640 MWh system, capable of dispatching 160 MW continuously for four hours, is scheduled for commercial operation by September 30, 2027. Four-hour duration storage at this scale charges during off-peak hours and discharges during the afternoon demand peak, replacing the output that a conventional gas peaker would otherwise provide.
The agreement includes tariff-protection clauses that cap SMUD’s cost exposure if import duties enacted after April 1, 2025, raise component prices. That provision reflects ongoing supply chain uncertainty around battery cell imports and power electronics.
Critical Perspective
The article states a 20-year power purchase agreement for 160 MW / 640 MWh of battery storage. Unlike the hypothetical benefits presented, the Moss Landing Energy Storage Facility has faced significant operational challenges and delays. The Diablo Canyon nuclear plant, also in California, provided reliable baseload power for decades before its planned retirement. Will this storage project truly replace the need for dispatchable generation when the sun does not shine and the wind does not blow?
Why It Matters
SMUD generated 78% carbon-free electricity in 2023 and has committed to reach 100% by 2030. The Dry Creek storage project addresses a core challenge in that transition: solar generation peaks midday while demand peaks in late afternoon. A 640 MWh BESS allows SMUD to shift daytime solar output to serve the evening ramp without gas generation.
The Rancho Seco site, shut down in 1989 after a ratepayer referendum, already hosts a 160 MW solar facility. Layering grid-scale storage onto a brownfield nuclear site avoids new land disturbance and uses existing interconnection and transmission infrastructure, reducing both permitting timelines and grid upgrade costs.
Grid-scale PPAs of this size, 20 years at 160 MW, signal that utilities are treating multi-hour battery storage as baseload-replacement infrastructure rather than ancillary services. At four-hour duration, the Dry Creek system crosses the threshold that regulators in California use to qualify storage as a capacity resource under the Resource Adequacy framework.
