APS Will Add 850 MW of Battery Storage to Solar Plants

Arizona’s largest utility wants to support its renewable power portfolio by adding as much as 850 MW of battery storage capacity to its solar power plants by 2025.

Arizona Public Service Co. (APS) made the announcement February 21. Don Brandt, the utility’s chairman and CEO, in a statement said, “Arizona is already a national leader in solar energy. The challenge is, no one has figured out how to stop the sun from setting at night. As storage technology improves and declines in cost, we will increasingly be able to store the power of the sun cost-effectively to deliver when our customers need it.”

The plan includes installing batteries at existing solar facilities, and at future sites. APS would not talk about the cost of the program, citing confidentiality agreements, but said it would build at least 100 MW of new solar capacity by 2025. Analysts have said the utility currently generates about 14% of its power from renewable sources.

The U.S. Energy Information Administration says natural gas, coal, and nuclear power contribute roughly equal amounts of power generation in Arizona, accounting for 88% of the state’s utility-scale net electricity production in 2017. State lawmakers and regulators have debated the role of renewables in the Arizona’s energy mix over the past few years as coal units have been retired and the state’s population, and demand for power, have continued to grow.

“Eight-hundred fifty megawatts shows you how incredibly transformational what we’ve seen happening on the grid is and how quickly that has been evolving,” APS President Jeff Guldner told the Arizona Republic. “The holy grail in the industry right now is trying to figure out how we capture solar energy during the day when there is tons [of it] on the system and then use it later when the sun goes down.”

Several companies are involved with the program announced today. APS said it would join with Chicago-based Invenergy to install batteries with a total 200 MW of capacity at six existing facilities in Maricopa County and Yuma, with those systems in place by 2020, with two remaining upgrades completed by 2021.

“Invenergy is proud to partner with forward-looking utilities like APS that are creating more sustainable, dependable electricity networks through the deployment of innovative battery storage projects like El Sol and AZ Sun,” Kris Zadlo, senior vice president, responsible for storage development at Invenergy, told POWER. “The expertise and flexibility Invenergy brings as a developer, owner and operator has propelled our growth as a leader in the battery storage market.”

Solar-Plus-Storage, with Natural Gas

APS also said it plans to build an additional 500 MW of solar storage and stand-alone battery storage by 2025, with the first project a 100-MW solar-storage plant. APS expects to issue a request for proposals this summer. APS already is partnering with Tempe-based First Solar to build a first-of-its-kind solar-plus-storage project that will be one of the largest in the country when completed in 2021.

A separate solar-plus-storage and natural gas project will be developed by APS as a peaking facility to handle periods of high demand for electricity, most likely during late-day periods when the sun is not shining. APS said it is partnering with AES, the Arlington, Virginia-based power distributor, and Invenergy on that project, with a natural gas supply contract from Calpine Corp. It said the gas purchase contract with Calpine is for seven years, “allowing APS the flexibility to take advantage of cleaner technologies in the future as they mature.”

“Arizona is realizing its great solar potential. As the state continues its transition to more sustainable energy sources, customers will require cost-effective and reliable electricity,” said Andrés Gluski, AES president and CEO, in a statement. “Energy storage can replace traditional peaking thermal generation to meet peak power demands while reducing greenhouse gas emissions and maximizing the use of renewable energy. We look forward to our continued partnership with APS to help the state and its customers accelerate a greener energy future through the broader adoption of energy storage.”

“By delivering solar after sunset, these projects with AES signal a new direction for how we can meet our customers’ peak need for energy with an increasingly clean mix of resources,” said Brad Albert, vice president, Resource Management for APS, in a statement. “This work with AES is also part of a long-term transition to larger roles for renewable and storage technologies in Arizona’s energy future.”

Pat Graham, state director of the Nature Conservancy in Arizona, in a statement said, “Large-scale battery storage is a critical step on the path to reliable and affordable clean-energy solutions. Clean energy and clean air are important to the health of our communities and the lands and water upon which all life depends.”

“The Energy Storage Association [ESA] congratulates APS for cementing its leadership among utilities by integrating energy storage into its system operations and realizing savings for consumers,” said Kelly Speakes-Backman, CEO of ESA, in a statement. “We especially applaud APS for partnering with third parties in this effort, sending a strong signal for businesses to invest in energy storage in Arizona.  We look forward to that day when energy storage is the central tool for maintaining a reliable and resilient, efficient, sustainable and affordable grid.”

Change of Heart?

Ramping up its support of solar power is a bit of an about-face from APS, which has fought efforts in Arizona to increase the state’s use of renewables. Most recently, APS spent a reported $38 million in an effort to defeat Proposition 127, a measure on last November’s ballot designed to require Arizona utilities to get at least 50% of their generation from renewable sources by 2030.

The measure, which was called the most expensive ballot proposition in state history, was soundly rejected by voters. In the runup to the election, opponents of the measure said it would increase electric bills by forcing companies such as APS to build new solar and wind facilities, bringing early closures of coal plants and the state’s lone nuclear plant.

Supporters of 127 argued that the cost of renewable energy is competitive with coal, natural gas, and nuclear power, even with battery backup, and said claims of higher utility bills were unfounded. They also said they doubted the 3,900-MW Palo Verde Nuclear Generating Station, the largest nuclear generation facility in the U.S. and a POWER Top Plant in 2015, would close.

A study conducted a few months before the 2018 election by the Natural Resources Defense Council (NRDC), using a mathematical model from energy firm ICF, found Palo Verde could continue to operate and make money even if Proposition 127 had passed. The NRDC study said increased use of solar power in Arizona would only have an impact on driving down the cost of coal- and gas-fired electricity, not on the nuclear plant. A report from Bloomberg New Energy Finance estimated that Palo Verde would continue to make about $60 million per year in profits, even if the measure had succeeded.

Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine).