Both Arizona Public Service Company ("APS") and Tucson Electric Power ("TEP") described their plans to expand their renewable resources in their respective preliminary 2017 Integrated Resource Plans ("IRPs" or "Plans") filed with the Arizona Corporation Commission ("ACC") earlier this month. See ACC Docket No. E-00000V-15-0094. The planning period for these reports is 2017 through 2032. These preliminary Plans are part of the ACC resource planning process and included stakeholder input. They will now be the subject of the ACC Utilities Division Staff review, stakeholder workshops and ACC Open Meeting discussions. Final Plans will be filed in April 2017, with final ACC review and acknowledgement in February 2018.
Renewable Highlights of the APS Plan.
The APS Plan contains several action items that could positively
impact development of renewables. First, APS plans to conduct an
all source request for proposal for resources to be delivered in
2020. The all source RFP is seeking 400 to 600 megawatts and will
consider a variety of technologies, including renewable. Second,
APS plans to complete its Solar Intervention Study which is a 75
home study on advanced technologies and a 125 home study that
assists third party designed customer owned technology packages.
Third, APS plans to complete its Solar Partners program and related
pilots which focus on APS owned rooftop solar research to enable
rooftop solar and battery storage integration with the grid.
Finally, APS plans to construct a 40 megawatt SAT solar PV project
at its existing Saguaro Power Plant.
APS anticipates annual load growth of 2.7%, prior to the effects of energy efficiency and rooftop solar generation. To help meet this growth, APS will increase renewable energy beyond the requirements of the state mandated renewable energy standard. APS notes that flexible generation also is needed to manage the load characteristics resulting from increased solar generation. Flexibility requires having units that can rapidly respond and can be ramped down when solar energy production is at its highest and then ramped up to meet the customer needs as the sun starts to set. Its Ocotillo Modernization Project and the potential increase in battery storage and other advance technologies should help add flexible generation.
Renewable Highlights of the TEP Plan.
TEP's Plan contains an expectation that its renewable energy
portfolio will exceed 370 megawatts by the end of 2016. TEP
predicts that 30% of its retail energy needs will be met with
renewable energy resources by 2030. This target is double that
required by Arizona's renewable energy standards. TEP's
action plan anticipates an additional 1100 megawatts of new
renewable capacity by the end of 2030, raising the total utility
scale renewable capacity on TEP's system to approximately 1500
megawatts. TEP expects that about 26% of its portfolio to be
utility scale renewables and 4% distributed generation by 2032. As
was also noted by APS, TEP discusses the challenges of integrating
renewable energy due to the peak generation hours not totally
coinciding with peak demand hours. TEP is studying technology such
as reciprocating engines and battery storage to help support
TEP's need to integrate its renewable resources. TEP's
consideration of energy storage includes pump hydropower and
compressed air energy storage. To assist with this integration
challenge, TEP is investing in two 10 megawatt energy storage
projects as well as smart grid technologies. TEP's renewable
acquisition strategy focuses on developing a number of small to
mid-scale renewable projects diversified across a wide range of
technologies. TEP's Plan includes a list of 11 current or
potential PPAs along with another 10 projects which are or will be
owned by the utility.
Interestingly, both APS and TEP have included as part of their
Plans consideration of small nuclear reactors. Both TEP and APS are
cautious about the Clean Power Plan which was recently stayed by
the Supreme Court, but they are considering appropriate plans
should the Clean Power Plan ultimately be implemented.
In light of these Plans, renewable energy developers should
consider opportunities for development in Arizona and consider ways
to participate in the APS and TEP studies.
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