TEP to switch from coal to solar to meet energy demands
March 15, 2016
Arizona utility Tucson Electric Power (TEP) aims to meet customers' energy needs by expanding renewable energy resources and energy efficiency programmes, evaluating new technologies to improve reliability, and pursuing opportunities to reduce its use of coal.
TEP plans to continue investing in large solar arrays and other community scale renewable resources that add cost-effective capacity to its renewable energy portfolio. The utility anticipates an additional 1100MW of new renewable capacity by the end of 2030, boosting its total renewable energy portfolio to approximately 1500MW.
It is also examining how energy storage and smart grid technologies can improve reliability. Construction is expected to begin this year on two 10MW storage projects that will be used to study how energy storage can help maintain the required balance between energy demand and supply, as well as other energy management requirements.
These strategies for southern Arizona's energy future are outlined in its preliminary 2016 Integrated Resource Plan (IRP), which was filed this month with the Arizona Corporation Commission (ACC). The IRP describes how TEP plans to meet customers' energy needs through 2030 while satisfying regulatory requirements and improving the environment.
"We're working to integrate emerging technologies into our system and pursue a resource diversification strategy that achieves our environmental goals while preserving safe, reliable, affordable service for customers," said David Hutchens, TEP's president and chief executive officer.
The IRP explores how distributed energy resources such as rooftop solar panels have created new challenges and opportunities for utilities and their customers. TEP expects to use more sensing and measurement devices to respond to the increase of intermittent renewable resources on its distribution system, effectively enabling some portions of the local electric grid to function as stand-alone microgrids.
Under direction from the ACC, TEP and other regulated Arizona power providers filed preliminary IRP plans this year because of uncertainties raised by the Clean Power Plan (CPP), a mandate to reduce carbon dioxide emissions from power plants that was finalised in August 2015 by the Environmental Protection Agency.
TEP and other stakeholders spent the past several months working with the Arizona Department of Environmental Quality to identify strategies that could be used to satisfy state CPP requirements. Enforcement of CPP requirements was suspended last month when the US Supreme Court issued a stay in response to a legal challenge.
"Our initial analysis suggests that TEP's resource diversification strategy is consistent with the targets set forth in the final CPP," Hutchens said. "We will continue working towards our goals as the CPP's status is resolved."
Energy efficiency measures continue to be cost-effective resources. TEP will carry on working to meet the aggressive goals outlined in Arizona's Energy Efficiency Standard, which calls on utilities to achieve cumulative energy savings of 22 per cent by 2020. In 2016, TEP will offer several new energy efficiency programmes that include discounts on energy-saving appliances, thermostats and new heating, ventilation and cooling measures.
Reductions in coal-fired resources will not diminish the importance of the coal-fired Springerville Generating Station (SGS) in eastern Arizona, which anchors the resources TEP relies on to serve customers' everyday energy needs.
"SGS is the lowest-cost, most efficiently run coal resource in our fleet and has always been part of our long-term resource planning," Hutchens said of the facility, which is operated by about 400 employees. "We are committed to a diversification strategy that benefits from capacity reductions at other TEP-owned coal-fired power plants."
The company has ceased burning coal at its Sundt generating station in Tucson and will lose 170MW of coal-fired capacity when Unit Two at the San Juan Generating Station in New Mexico is shut down at the end of 2017. TEP will continue to own a 170MW share of Unit One at San Juan but has an option to exit that unit in 2022.