Salt River Project (SRP) recently began construction of Arizona’s first standalone battery storage project intended to provide flexible peaking capacity. The 10 MW storage system can deliver the equivalent energy needed to power 2,400 homes for up to four hours. More importantly, however, is that the project serves as a signal that storage technology has quickly become a market competitive option for utilities.
Industry estimates, which forecast that lithium-ion capital costs will drop by 36% over the next five years, have utilities increasingly looking to incorporate more storage capacity into their resource planning. In the last month alone, in addition to SRP’s project, there have been four other major storage announcements by utilities in the western United States. In Colorado, Xcel Energy detailed plans for a 275 MW storage project that would come online in 2022 if approved by the state’s Public Utilities Commission. In Texas, Vista Energy released plans to develop a 10 MW, 42 MWH project which would be the largest in the state. Nevada’s largest utility announced plans for a possible 100 MW storage project.
In Arizona, SRP’s storage project will help determine the best way to scaleup larger energy storage projects. And thanks to the Arizona Corporation Commission’s forward thinking on the state’s energy future, larger storage projects could play a vital role in the state’s energy infrastructure. Earlier this year ACC Commissioner Andy Tobin proposed an Energy Modernization Plan, which calls for 3,000 MW of storage by 2030.
The Energy Modernization Plan is a common-sense Arizona based plan. Beyond calling for investment in storage technologies that help manage electricity demand, which makes the grid more reliable, flexible, and inexpensive, the proposal would, by 2050, have Arizona get 80 percent of its energy from sources like solar, storage, and nuclear. The plan calls for investing in efficiency, which is the least expensive way to meet the state’s energy needs. The Energy Modernization Plan would ensure that Arizona remains a national leader energy innovation while protecting consumer rates.