Tucson Electric Power files IRP, will add 800-MWs of renewables, 100-MWs of storage by 2030

Written By: Stratton Report
April 5, 2017

Tuscon Electric Power

On April 5, Tucson Electric Power announced it had filed its 2017 Integrated Resource Plan with the Arizona Corporation Commission, describing TEP’s current resource portfolio, projects future energy needs, and strategies the company will use to meet customers’ energy requirements over the next 15 years.

TEP stressed it will continue to diversify its generation portfolio by adding some 800-MWs of solar and wind generation with a goal of delivering at least 30 percent of its power from renewable resources by 2030 – twice the level required by 2025 under Arizona’s Renewable Energy Standard.

David G. Hutchens, TEP’s President and Chief Executive Officer noted:

We’re evolving from a traditional utility to a more technology- and consumer-focused provider of energy products and services while maintaining reliability, convenience and affordability for our customers. Our plan recognizes the continued financial and operational benefits of owning Units 1 and 2 at the Springerville Generating Station, Arizona’s most efficient, cost-effective coal-fired power plant. However, renewable energy, energy efficiency and cost-effective natural gas technologies will play an increasingly prominent role in our future resource plans.

TEP pointed out it had recently signed an agreement with NextEra Energy Resources LLC to buy power from a new 100-MW wind facility and is evaluating proposals for a new 100-MW solar facility that would be built and owned by a project partner.

The utility emphasized that the increased renewable power supply will cause some operational challenges, requiring new ways of managing the intermittency and variability of renewable resources. TEP will continue to rely on energy efficiency measures and invest in new cleaner burning, natural gas resources. The company also is considering investing in flexible, fast-responding natural gas reciprocating internal combustion engine technologies that provide an affordable way to manage power fluctuations associated with intermittent renewable resources.

TEP also stated that it expects to make greater use of energy storage systems, which can boost power output levels more quickly than conventional generating resources to maintain the required balance between energy demand and supply. Such systems are expected by the utility to rapidly decline in cost, and the company could gradually add up to 100-MW of storage capacity.

TEP recently completed three energy storage projects with a combined capacity of 22 MW that are designed to provide grid-balancing support (see Stratton Report coverage here.)

TEP highlighted its plans to retire and replace some of its coal-fired generating resources including losing 170-MWs of coal-fired capacity when Unit 2 at the San Juan Generating Station in New Mexico is shut down at the end of this year, and another 170-MWs when it stops using the plant entirely in June 2022, when the current coal supply agreement ends.

Moreover, TEP announced it is preparing for the retirement of the coal-fired Navajo Generating Station possibly in 2019, of which TEP owns a 168-MW share.