
NextEra's 20-MW Pinal Central solar farm in Arizona, which delivers power to the Salt River Project, Source: Salt River Project |
The solar energy industry has achieved its long-time quest to become cost-competitive with conventional power across wide swaths of the United States. Now it is on to a new mission: saving that energy for later.
Large-scale solar power plants coupled with energy storage systems are multiplying in the U.S., as developers and grid operators seek to smooth the variable output of solar plants by storing the electricity they produce for peak power demand in the evening. At least 51 such hybrid systems 1 MW and larger are online or planned, according to S&P Global Market Intelligence data. Operational systems total 783 MW of solar capacity tied to 492 MW of storage for various periods of time, while planned projects account for 3,228 MW of solar integrated with 2,888 MW of storage.
Many of these solar-plus-storage projects are concentrated in the Southwest. Hawaii and the Northeast also have multiple projects planned or underway. Beyond known projects with identifiable developers, many more solar-plus-storage power plants are earlier in the development process. Grid operator interconnection queues and recent responses to utility requests for proposals show several thousand megawatts of additional potential.
In response to Xcel Energy Inc.'s recent request for proposals, for instance, developers pitched 57 projects in Colorado for more than 10,000 MW of battery-backed photovoltaics. The California ISO's generator interconnection queue, as of May 24, showed 16 projects coupling 3,340 MW of solar PV with 2,532 MW of batteries. Another 14 solar-plus-storage projects with a combined maximum output of more than 5,000 MW were exploring interconnection in Arizona Public Service Co.'s territory, as of April 4. Additional large-scale battery-backed solar projects are under study in the ISO New England, New Mexico and PJM Interconnection.

Market shift in the Southwest
APS is among the few utilities with experience purchasing large volumes of stored solar electricity to help meet evening peak demand in its service territory. In 2013, the Pinnacle West Capital Corp. subsidiary began buying power into the night from Abengoa SA's sprawling Solana Generating Station. Backed by a $1.45 billion loan guarantee, the concentrating solar power, or CSP, project has a nameplate generating capacity of 280 MW and uses molten-salt storage tanks to provide electricity for up to six hours without the sun.
One other CSP facility with storage operates in the U.S.: SolarReserve LLC's 110-MW Crescent Dunes Solar (Tonopah Solar) project in Nevada, another recipient of a large DOE loan guarantee, which began delivering power to Berkshire Hathaway Energy subsidiary NV Energy Inc. in 2015. Since then the market has moved decidedly toward PV and lithium-ion batteries, thanks to a combination of fast-falling prices, federal tax incentives for solar-fueled batteries and an appetite for shorter duration storage, typically in the two- to five-hour range.
In February, APS disclosed its latest solar-plus-storage deal, for the output from First Solar Inc.'s Arlington Solar-Battery Project, a 65-MW PV project that will charge 50 MW of batteries. Expected online in 2021, the project, with nearly three hours of storage, won an all-source request for peaking capacity. The Arlington project marks the first announced solar-plus-storage deal for APS since the Solana project in 2013.
"I see a future with more battery and solar combinations," Jeff Burke, director resource planning at APS, said in an interview. In April, APS issued a follow-up request for up to 800 MW of peaking capacity, which could create a new round of solar-plus-storage opportunities.
With its abundant sunshine and wide-open spaces, Arizona has emerged as a vibrant market for such projects. Salt River Project and NextEra Energy Resources LLC in May announced the completion of the Pinal Central Solar Energy Center, a 20 MW solar PV array with 10 MW of storage. The NextEra Energy Inc. subsidiary also has a low-priced contract to supply Fortis Inc.'s Tucson Electric Power Co. with power for 20 years from a planned 100-MW PV plant with 30 MW of battery storage.
In Nevada, NextEra is developing the 200-MW Dodge Flat Solar Energy Center, with 200 MW of battery storage. NV Energy has contracted for the project, initially with 50 MW of batteries, and has also signed power purchase agreements for NextEra’s 100-MW Fish Springs Ranch Solar Center and Cypress Creek Renewables LLC’s 101-MW Battle Mountain Solar Project, both of which include 25 MW of storage, the utility said on May 31.
Also in Nevada, SolarReserve hopes to orchestrate a CSP comeback with its proposed 2,000-MW Sandstone project, including 10 hours of storage. In California, Canadian Solar Inc. subsidiary Recurrent Energy LLC is developing at least two large solar-plus-storage projects: the 350-MW RE Crimson Solar Project (Sonoran West), with 350 MW of storage, and its RE Gaskell West facility, a five-phase project with 125 MW of storage.

'Not apples to apples'
Large-scale battery-backed solar prices appear increasingly attractive. Scheduled for completion by late 2019, NextEra's Tucson Solar Project will produce power at less than 3 cents/kWh and reportedly has an all-in cost below 4.5 cents/kWh, including batteries, although the utility declined to confirm that. In Colorado, proposals to Xcel averaged $38.30/MWh, or 3.8 cents/kWh, the utility revealed in a regulatory filing. In Nevada, NV Energy recently received "amazingly attractive" bids for battery-backed PV projects priced under 3 cents/kWh, a Berkshire Hathaway official said.
To be sure, there are cautionary signs. Some buyers warn against comparing prices of solar-plus-storage projects because of their wildly diverging characteristics. Some projects combine large solar arrays with much smaller battery systems, offering only an hour or two of storage, while others feature more evenly matched solar and battery components for longer or shorter duration storage.
"It's not apples to apples," Burke said. "If you oversize the lower cost portion of the facility, the solar, and under-size the battery, it looks cost-competitive but it doesn't provide the same service." APS needs its solar and storage "similarly sized to make sure we can provide reliability," he said. "If I have a 100 MW solar project and a 30 MW battery, then I have to make the 70 MW with something else."
That something else could be a natural gas peaker plant, for instance. While solar-plus-storage "can meet our peaking needs," Burke is not yet convinced the emerging combination is ready to fully replace conventional gas peakers: "I think the answer is to be determined." Given the volume of solar-plus-storage projects vying to compete with gas in Arizona and around the country, that answer may come soon.
