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Regional Report: Future of Energy

Published: 12/05/2022
Updated: 12/08/2022

APS, SRP and Array Technologies discuss Arizona’s clean energy plans

Arizona has a natural advantage when it comes to pursuing clean energy goals: sunshine. As the world works to decrease carbon emissions, Arizona is positioned to lead the development of new clean energy technology innovations.

Power providers Arizona Public System (APS) and Salt River Project (SRP) and solar company Array Technologies joined a recent GPEC Regional Report to discuss clean energy targets for Greater Phoenix and how federal investment can drive local manufacturing and production in this space. Panelists were:

  • Erica Brinker, Chief Commercial Officer, Array Technologies
  • Bobby Olsen, Senior Director, Corporate Planning, Environmental Services, & Innovation, Salt River Project
  • Judson Tillinghast, Leader, Product Development & Strategy, Arizona Public Service
  • Moderator: Eric Sperling, Managing Director, Social Television Network

“There has never been a more exciting or dynamic time to be within the energy space as we really think about completely redesigning the grid,” Olsen said.

Clean energy goals of Arizona electric providers

APS, which provides energy to 2.7 million Arizonans, aims to use 45% renewable energy and 65% clean energy by 2030. It is working to retire coal resources by 2031 and to transition to 100% clean, carbon-free energy by 2050.

While decreasing carbon and coal use, increasing battery storage and supporting that transition with natural gas, a core area of APS’ focus is managing the impact of grid stress during peak energy hours through technology and rebates.

“The more we push toward decarbonization, we really need coordination and collaboration with all of our customers,” Tillinghast said. “Technology is the way we can make that easy for customers.”

SRP is a power and water provider with a network of 2 million consumers. It aims to reduce carbon intensity 65% by 2035 and 90% by 2050, along with a 20% reduction in generation-related water use intensity. It hopes to eliminate or offset power generation groundwater use in active management areas.

About 30% of SRP’s energy mix today is sourced from carbon-free resources, Olsen said. The company’s energy portfolio is made of about 43.5% natural gas, 26% coal, 17.8% nuclear, and about 9.3% renewable energy including solar, geothermal and wind.

Solar and hydro power in Greater Phoenix

Array Technologies, with more than 30 years in the solar power field, has developed solar tracker tools that harness 25% more energy than competitors, Brinker said. Up to 90% of the tracker products can be sourced in the United States.

The company established the Array Tech Research Center in Phoenix in 2021 to expand research and development, training and client demonstration capabilities. The company also has sites in New Mexico, Brazil, the United Kingdom, Spain, South Africa and Australia.

Array has set 2025 Environmental, Social and Governance (ESG) goals that include delivery of an additional 90,000 MW of solar power, reduction of direct emissions by 30%, and the sourcing of half of all direct energy consumption from renewable energy sources. It has aligned strategy, communication and reporting practices with global efforts by joining the UN Global Compact, the Taskforce on Climate-Related Financial Disclosures and the United Nationals Sustainable Development Goals, among others.

“Solar is the fastest-growing and most popular form of generation in the U.S., and for those of us who live in Arizona, we know that this is an incredible export of our region,” Brinker said.

There is also development in more nascent fields of renewable energy. SRP’s long-term energy goal includes fields such as hydrogen generation, carbon capture and advanced nuclear. Both SRP and APS are among a group of Arizona energy leaders, universities, and private companies that partnered with the Navajo Nation and Nevada to form the Southwest Clean Hydrogen Innovation Network (SHINe), a regional hydrogen hub aiming to develop clean hydrogen-focused initiatives to accelerate the use of hydrogen as an energy carrier.

 “A lot of the technologies that are necessary to get to that 90% aspirational reduction of carbon don’t exist today,” Olsen said. “We know there are several technologies that have been incubated, and are working toward their progress, but there’s a lot of work that utilities need to do in partnership with some of those technology companies to really advance the ball and make sure that we have a clear path forward for how we’re going get to 90% or beyond.”

Advancement of electric vehicles in Greater Phoenix

There are more than 50,000 electric vehicles inside the service territory areas of APS and SRP, and that number is expected to increase as vehicle manufacturers progress toward their EV goals and more affordable options hit the market. SRP projects the number inside its territory will more than double to almost 70,000 electric vehicles by 2025.

APS has implemented its Take Charge AZ program that includes targets such as the payment and installation of Level 2 chargers at customer locations, and the implementation of DC Fast Charging stations in traveler hubs such as Globe, Payson, Prescott and Sedona.

With companies’ prioritization of electric vehicles and federal investment in infrastructure development, there is a focus on preparing Greater Phoenix to accommodate future needs.

“There’s a lot of opportunities that the utilities can collaboratively go after to help build out new infrastructure for electric vehicle charging in solar and battery,” Tillinghast said. “It’s a very interesting time, there’s a lot of opportunities.”

Federal funding is addressing Greater Phoenix clean energy manufacturing

The path to clean energy is aided by federal funding. The Inflation Reduction Act (IRA) emphasizes domestic manufacturing by offering tax credits and incentives to companies manufacturing inside the United States. This includes solar power manufacturing and the production of electric vehicles and related infrastructure manufacturing. Groups such as SHINe are seeking funding from the Infrastructure Investment and Jobs Act (IIJA).

Prior to the passage of the IRA, Array projected a 194% growth in solar installations from 2012-2026. That number can balloon with funding commitment.

“You see many solar companies leading the way from a revenue perspective,” Brinker said. “(The IRA impact) is going to be meaningful over the next 10 years in bringing manufacturing to the U.S. and also growing the solar industry, and we think Arizona should be leading the way.”

Public power companies can receive access to direct payment benefits for renewable energy work, expanding the scope beyond working with developers in the industry whose goals may be different than the providers' needs.

“We have the opportunity to develop resources on par, which gives us more control over dispatch and how we integrate those resources into our system,” Olsen said. “How we might deploy those resources will be foundationally different than a developer who really is focused on a very specific revenue stream that might have positions against how we need to operate that system for our entire system.”