Arizona Poised to Open New Market for Energy Storage

Arizona Poised to Open New Market for Energy Storage

Arizona has been known as the state with seemingly ubiquitous rooftop solar; it may now be moving toward having energy storage just as pervasive as solar. A settlement that Arizona Public Service (APS) and the Residential Utility Consumer Office (RUCO) negotiated on purchasing new generation capacity will open up opportunities for energy storage, demand response, energy efficiency and renewables in the Grand Canyon State.

The APS/RUCO joint settlement would require APS to evaluate storage as a potential alternative to building or upgrading conventional power plants between 2015 and 2021. The proposal would also mandate that energy storage be considered as an alternative to any potential fossil-powered peaking plant, and that before 2018 APS would solicit competitive bids for 10 mWh of energy storage.

In addition to this consideration of storage on the menu of options, another provision included in the settlement letter would require storage to be a part of any simple-cycle turbine procured.  In the letter it states, "if a new simple-cycle combustion turbine is proposed to be in service before least 10% of the capacity shall be competitively procured energy storage as long as it meets the cost effectiveness and reliability criteria of the proposed simple-cycle combustion turbine.

This specification recognizes the overall system benefits that energy storage provides, and the ability of storage systems to compete on a level playing field with gas-fired peaker solutions.

The Energy Storage Association was able to provide information about energy storage applications and technologies that helped inform the process and educate Arizona stakeholders on the benefits of energy storage, including greatly reducing the need to build additional fossil fuel generation.

The Energy Information Administration forecasts that the U.S. will need more than 40 gigawatts of new capacity over the next 15 years to handle peak demands, even while the overall growth in electricity load continues to slow.  In a carbon constrained world, energy storage and other clean sources can provide efficient and cost-effective solutions that prevent increased greenhouse gas emissions.

Arizona may need as much as 4 gigawatts of new generation before the end of the decade; this settlement would open the door for energy storage and other clean energy project developers to be included in competitive bidding opportunities. ESA has long advocated for energy storage to be included on the menu of options states consider when planning and procuring electric generation and capacity resources. This settlement will do just that--considering energy storage as a potential resource and allowing it to compete with other generation sources to provide clean, reliable, cost-effective electricity for the state.

Source: theenergycollective

SMART GRID Bulletin March 2017

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