Arizona utility APS signs 20-year tolling agreement with Strata for 1GWh BESS
Arizona: APS and Strata in 20-year tolling deal for 1GWh BESS
Developer Strata Clean Energy and utility Arizona Public Service (APS) have agreed a 20-year tolling agreement for a 255MW/1GWh battery energy storage system (BESS).
The pair announced the agreement, which will see Strata build, own and operate the project but exclusively provide its energy to APS over the period, yesterday (24 May).
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The project, called Scatter Wash, is located in Phoenix and will increase clean energy capacity in one of the US’ fastest growing cities and stabilise the grid in a drought-prone region. A spokesperson said it has an investment value of US$500 million.
It resulted from an All-Source request for proposals (RFP) that APS conducted in May last year which saw it commit to adding 1GW of clean energy resources. The utility is the largest in Arizona, serving 1.3 million homes and businesses.
The four-hour duration is similar to the market standard in California, which is required by grid operator CAISO’s Resource Adequacy framework and means BESS projects primarily monetised through energy and capacity, rather than ancillary services.
Scatter Wash first announced it was working on the project in late 2021, when it said it would be connected to the grid in 2024. Yesterday’s announcement did not give a firm commercial operation date, however. A related substation for the project may not be coming online until the end of 2023 according to this regulatory document.
Josh Rogol, president of Strata Clean Energy, commented: “We believe that APS will continue to be a leader in battery energy storage and that our experienced Scottsdale-based team is well positioned to help move the state towards achieving its clean-energy objectives with projects like Scatter Wash. We have a large pipeline of additional clean energy projects in the Western United States and world-class execution capabilities.”
The project is the same in energy capacity as a 250MW/1GWh BESS being developed by Plus Power for another big Arizona Utility, Salt River Project (SRP), set to come online in 2024. Tucson Electric Power (TEP) is the other large utility in the state.
Grid-scale BESS projects in the Arizona have been on the larger side. Recent ones covered by Energy-Storage.news include an 860MWh project system integrator Powin is deploying and a co-located 600MWh project being developed by developer BrightNight.
Related Knowledge Center: Offshore wind energy
Over the next decade, U.S. offshore wind power is expected to grow from a single 30-megawatt wind farm off Rhode Island to more than 2,000 MW of capacity along the Atlantic Seaboard. There are contracts for wind power off the coasts of Massachusetts, Connecticut, New York, Maryland, New Jersey, Rhode Island, and Virginia.
The National Renewable Energy Laboratory has estimated the United States has over 4,000 gigawatts (GW) of offshore wind potential, enough to power the country four times over.
The growth in part being spurred by state solicitations, including in New York, where then-Gov. Andrew Cuomo (D) set a commitment of 9,000 MW of offshore wind by 2035, and in Connecticut, where in June 2021, Gov. Ned Lamont (D) signed legislation authorizing the construction of 2,000 MW of offshore wind by 2030.
The offshore development is also being driven by an investment tax credit set to end in December 2019 and is equal to 12 percent of expenditures. U.S. Sens. Susan Collins (R-Maine) and Tom Carper (D-Del.) have introduced a bill to extend the tax credit for up to eight years.
The Interior Department has held eight competitive lease sales that resulted in 15 offshore wind leases over 1.7 million acres that has the potential for 21 GW of capacity. In February 2022, the Bureau of Ocean Energy Management completed a bidding process that realized $4.37 billion for 488,000 acres across six lease areas in federal waters off New York and New Jersey.
Projects have also been proposed off the Southeast coast, off California and Hawaii, and for the Great Lakes.