APS has a long history of energy innovation that continues today with a wide range of programs and initiatives that are setting standards for the rapidly transforming utility industry. We are working to build a smarter energy infrastructure with reliable, cost-efficient integration of emerging technologies, both on the grid and at our customers’ homes and businesses. Our commitment to innovation ensures that we will continue to provide customers with more options to power their homes and businesses while maintaining reliability and increasing productivity.

To put our progress in perspective, consider that there were less than 10 megawatts (MW) of solar power on the APS system just a decade ago. Today we have more than 1,300 MW of installed solar capacity, including more than 200 MW owned by APS. And solar is just one of many customer or distributed energy resources (DER) expected to grow for the foreseeable future, with energy storage being another. Other customer-sited resources and DERs include smart thermostats, grid-interactive electric water heaters, energy storage, load controllers, and variable speed, multi-stage heating, ventilation and air conditioning (HVAC) systems. Approximately one in 20 APS customers have some form of customer energy management tool or DER in their home. We expect renewable energy, combined with energy efficiency, to meet nearly 50 percent of our anticipated new energy growth.

Advanced Grid Technologies

The electric distribution system is evolving, and APS is working to remain at the forefront of innovation in our rapidly changing industry. We plan to invest $341 million through 2025 in new grid technologies, system upgrades and related management systems through a number of project initiatives.

There are several key drivers behind our investments in a modernized distribution system. We pursue continual improvement in our safety, operational reliability, power quality and customer value. Integrating advanced distribution system technologies enables us to build a modern, flexible grid that enhances our operational capabilities and provides our customers with a new generation of tools and services. Modernizing the distribution grid yields greater efficiencies, including improved work management processes for our employees through the use of mobility solutions. Increased penetration from residential solar and battery storage systems requires us to develop new and better ways to manage power quality on our system. And the grid must evolve to support the emerging technologies and options that our customers increasingly demand.

Modernizing the grid allows us to explore opportunities to innovate that DER present. For example, we are the first utility in the nation to leverage our Advanced Metering Infrastructure (AMI) network for two-way grid communications. Our fully deployed AMI network includes 1.25 million meters installed at customer homes and businesses, including more than 75,000 meters on residential rooftop solar systems.

Solar Research and Development

With more than 1 gigawatt (GW) of overall solar energy capacity, APS is one of few utilities outside of California to achieve this milestone. When these generating resources are producing energy at full capacity, this electricity can meet the partial daytime needs of more than 400,000 Arizona homes. Our solar portfolio includes 682 MW from rooftop systems and 582 MW from grid-scale projects.

Grid-scale solar is the most cost-effective and efficient way to produce solar energy, conserve water and avoid carbon emissions. Nine solar power plants in our AZ Sun Program collectively produce 170 MW of carbon-free electricity using more than 1 million photovoltaic panels in the Arizona desert. Since the first of our APS-owned AZ Sun solar plants came online in 2011, our grid-scale plants have produced more than 1 billion kilowatt-hours (kWh) of clean energy for our customers.

Learn more about our Renewable Energy Portfolio.

A 40-MW solar plant in Red Rock, Arizona, which is one of the largest solar photovoltaic power plants in the state, is owned and operated by APS in a unique partnership with Arizona State University and PayPal. The Red Rock plant is a prime example of how we partner with our customers to develop cost-effective solar energy and help them achieve their green energy goals.

In 2017, APS interconnected more than 18,000 rooftop solar systems to our distribution grid. To help us understand the impact of high penetration levels of rooftop solar on our system, we are conducting an innovative, research-focused program with residential customers—the Solar Partner Program.

Capture Punkin Center battery storage scenic

Energy Storage

Energy storage, including grid-connected batteries, is a rapidly developing technology with the potential to increase the value of variable generation resources and improve grid reliability and stability. Energy storage could make use of more energy produced by renewable resources by shifting energy production to align with peak demand.

Energy storage can capture variable resources like solar energy during the day, which then can be used during peak demand in the early evening when it provides the greatest benefit to our customers and the grid. Batteries can also provide ancillary benefits such as frequency response, voltage regulation and spinning reserve, as well as defer investment in transmission or distribution needs.

Learn more about Arizona's largest battery storage project from First Solar and APS. (video)

Learn about our Punkin Center battery storage project that is improving reliability for customers in rural Arizona. (video)

In 2018 we launched our new Storage Rewards program, which will install 40-50 residential batteries in customer homes. A large commercial and industrial battery will also be implemented through this program. We are investing $6 million in Storage Rewards, which will provide us with a 1-MWh virtual power plant to generate and store power during midday for delivery to our customers during peak hours.

Our long-term energy storage strategy includes:

  • Adoption of more than 500 MW of additional battery storage over the next 15 years
  • Installation of an additional 8 MWh in 2018 to defer rebuild of a 17-mile distribution line to Punkin Center (pictured above)
  • Load-shifting customer programs with thermal storage that use grid-connected residential water heaters to move heating demand to midday hours; taking advantage of peak solar production
  • Encouraging customers to practice thermal storage by pre-cooling their homes before on-peak hours through the smart thermostat program and rate incentives – we will have 3,000 smart thermostats operating in customer homes by the summer of 2018, with an additional 3,000 expected by the summer of 2019

Microgrids

Microgrids are small-scale power facilities installed at customer locations that can provide backup power to the customer in the event of a grid outage and deliver peaking service and frequency response to APS that benefits additional customers.

APS and our customers can share in the costs of developing microgrids, which results in cost-effective economic deployment of new grid resources. Its fast-acting capabilities also enhance grid resilience and flexibility by providing important peak resources and ancillary services such as frequency response, which can lessen the frequency and impact of power outages.

Through an innovative relationship with the U.S. Department of the Navy, APS operates a low-emission, 25-MW microgrid at the Marine Corps Air Station (MCAS) Yuma. The system provides 125 percent of the backup power needed by the base in the event of a grid disruption, enhancing reliability and security at the base and allows the base to add more capabilities in the future.

APS also operates an APS-owned microgrid at the Aligned Data Centers campus, which is being built in phases. The first phase, 13 MW, was deployed in 2016. At full build-out, the project will comprise 63 MW of peaking generation within the heart of the Phoenix metro area. Like the MCAS Yuma microgrid, the APS-owned, cost-shared microgrid at Aligned provides peak generation and frequency response to the APS grid, in addition to backup power for the data center in case of an outage.

Microgrids offer great potential for developing grid innovation. For example, APS has filed for two patents on a system that employs microgrids for autonomous frequency response.

Integrated Resource Plan

eim savings

The APS 2017 Integrated Resource Plan (IRP) details our comprehensive plan to reliably and affordably meet customers’ projected energy needs, fulfill regulatory targets and manage environmental impacts over the next 15 years. The IRP is developed every two to three years to document our resource planning activities and outline near-term actions and long-range plans.

In line with projected population growth in Arizona, we anticipate energy requirements to increase more than 50 percent by 2032. Our resource requirement is expected to reach 13,000 MW by 2032, or about 60 percent higher than today’s requirement of approximately 8,000 MW. As a result, APS anticipates a need to replace 2 GW of resources, requiring 6.9 GW of resource additions to meet customer demand by 2032. This will be accomplished by growing sustainably through three key planning drivers:

  • Greater use of natural gas due to low natural gas prices and stable price forecasts for the foreseeable future, and the resource’s lower emission benefits
  • Environmental regulations, including installation of selective catalytic reduction at our Four Corners Power Plant and a definitive plan to end coal usage at our Cholla Power Plant by 2025
  • Increasing levels of renewable resources – renewable energy currently represents 12 percent of our energy mix and is projected to represent 18 percent by 2032

Palo Verde from WRF Reservoir

Palo Verde Generating Station

APS operates the Palo Verde Generating Station and owns or leases 29.1 percent of the facility. For the 26th consecutive year, Palo Verde was the nation’s biggest power producer, generating 32.3 million MWh of carbon-free electricity in 2017. Palo Verde is the only generating facility in the United States to produce more than 30 million MWh in a year, a milestone the plant has achieved nine consecutive years and a total of 13 times.

Palo Verde produces more than 70 percent of Arizona's carbon-free electricity, with nearly half of the plant’s output dedicated to serving Arizona consumers. Electricity generated by Palo Verde annually displaces more than 13.2 million metric tons of greenhouse gas (GHG) emissions that would otherwise have been produced, providing clean energy that powers about 4 million homes and businesses throughout the Southwest.

Ocotillo Power Plant Modernization

Progress continued in 2017 on our Ocotillo Power Plant modernization project. Two 1960s-era natural gas-fired, steam-generating units at the power plant in Tempe, Arizona, are being replaced with five new gas-fired turbines equipped with state-of-the-art pollution control technology. Demolition of the abandoned oil tanks was completed at the end of 2016 and construction of the new turbines began in early 2017.

The new gas turbines are expected to be in commercial service by the summer of 2019. They will be fully compliant with the EPA’s New Source Performance Standards for carbon emissions from new generating units. Nitrogen oxide and carbon monoxide emissions rates will be cut in half, while almost doubling the generation capacity at the site. In addition to the modernized plant’s environmental benefits, the new units’ quick-start capabilities provide the flexible generation required to integrate more renewable energy into our generation resource mix.

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