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Arizona pushes record energy storage volume and aggressive grid modernization

Arizona’s utility regulator, Andy Tobin, proposed a new energy modernization plan which will update Arizona’s policies on clean energy, storage, biomass, efficiency, vehicles and more.

The sweeping plant, seems to be an intelligent look at the most modern techniques, combined with pragmatic decision-making – to clean a power grid.

Currently, Arizona has a 15% renewable energy mandate by 2025, a goal which has already been met. This new proposal will see that increase to 80% by 2050, “with the ultimate goal of being 100%.” Nuclear power is included in the clean energy target.

For energy storage, a new target of 3GW by 2030 will be set per the original reporting on the topic by Utility Dive. The proposal cites:

“Low priced, and sometimes free electricity, is being exported from surrounding states; at the same time, increasing peak demand in Arizona is causing new expensive investments for ratepayers.”

The smartest thing I’ve ever heard someone do is taking advantage of ‘free stuff.’ California has paid Arizona take electricity in the past.

This 3GW of storage target is the largest volume target so far, California is second at 2GW – however – California’s number is by 2020. If we compute the targets on a per capita basis – Arizona has 6.9 million people versus California’s 39.2 million – we’d have to see California reaching 17GW of energy storage by 2030.

Bloomberg suggests the USA will have about 75GW of energy storage by 2030 – California has a habit of leading the country, and I expect California to blow past 17GW by then – possibly being as much as (or far more depending on doubling pace) 37.5GW (50% of US total).

Technologies that qualify as energy storage include: electrochemical (batteries), mechanical (flywheels/compressed air), thermal (molten salt), and gravitational (pumped hydro).

The proposal sets a target of 90 MW of biomass generated from the ‘treatment’ of 50,000 forests by the end of 2021. Only “high-risk fuel,” sourced 80% from within Arizona, will qualify toward the 90 MW of required biomass energy production.

In another example of renewables coming for gas peaker plants – Arizona’s new proposal includes a new “Clean Peak Standard”, where utilities will be required to use renewable resources during peak hours – with the logic that it’ll drive energy storage construction.

These renewable fed energy storage plants, simply by existing on the network, will probably also offer ancillary services like the Australia 100MW/129MWh Tesla Battery, but it will also be requested to do something much bigger – eating the ‘duck curves’ that arise as a result of growing daytime solar power production.

Per the proposal, estimates from the ‘Arizona Department of Environmental Quality’ show that the costs of the Phoenix Metro area being in air quality noncompliance could be over $296 million dollars per year. The document suggests solving this problem by “strategic electrification of the transportation sector”. This is to be done by the utilities’ proposed EV charging infrastructure new home construction, existing home programs, strategic commercial/industrial/fleet customers and on major highways and interstates.

“Priority should be given to implementation plans where day time (EV) charging is encouraged.”

This would put the state in a position to take care of peaking energy usage using vehicle to grid connections.

New York, California, Massachusetts and Oregon have energy storage targets or mandates on the books. Multiple other states are considering energy storage goals.

Arizona recently set records, broken thereafter, for the cheapest price of solar power plus energy storage (dispatchable).

Electrek’s Take

If we’re lucky, we might see Arizona’s ‘Solar Grade’ from the header image improve with implementation of some of these ideas. A great quote found on UtilityDive where I first found the article:

If approved, the plan would make Arizona “the first state to attempt to modernize its renewable portfolio standard to reflect the recent advances in energy technologies,” Lon Huber, a consultant who worked to craft the original RUCO proposal, said. “What this plan is saying is we aren’t going to build our future on natural gas — the backbone of the system over the next 40 to 60 years will not be gas.”

This kind of longitudinal thinking excites me. A utility pushing for energy storage+renewables in the short-term to attack peaker plants. Research indicates this market is economically ripe for this type of hardware upgrade. These gas peaker plants are used 3-5% of the year.

Arizona wildfires from 2002 to 2017 have burned over 5.2 million acres of forestry, taken 29 lives and cost the public $162 million in damages. Investing in biomass facilities solves 3 problems at once – creating healthy forests, getting rid of large volumes of brush, and generating cheaper and cleaner energy for Arizona residents (now, if we could somehow capture the carbon and spend it somewhere).

Heartbeat of a circular economy if I’ve ever seen one.

The reality of this proposal getting through in Arizona seems challenging. The state’s utilities are under investigation for illegally funding campaigns of those who would later regulate their activities. This has led to a cooling of the renewables market within the state. Regulator Tobin has some work to do.

If the Xcel Energy energy storage bids in Colorado are any indication – we will see these record-sized proposals from Arizona, home of some of the best sunlight on Earth, under 3¢/W.

Energy storage will be the magical key to allowing immense levels of renewable energy.

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