Reports related to this article:
Project(s): View 6 related projects in PECWeb
Plant(s): View 5 related plants in PECWeb
Released October 13, 2021 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Salt River Project (SRP), Arizona's second-largest electricity provider, has an active capital program, with about $6 billion of capital-spending projects set to begin construction over the next six years. Industrial Info is tracking 29 SRP capital projects, valued at about $3.1 billion, that are scheduled to begin construction between 2021 and 2026.
Like many electric utilities, publicly owned SRP (Tempe, Arizona), which serves more than 1 million electric customers in the metropolitan Phoenix area, is planning to spend heavily to expand its renewable generation portfolio and its transmission & distribution (T&D) network. And like other utilities that once relied heavily on coal, SRP plans to make hefty environmental remediation outlays at its now-closed Navajo Generating Station (NGS), a 1970s-era, three-unit facility that used to have 2,250 megawatts (MW) of generating capacity. That facility closed in 2019. Until its closure, NGS was the largest coal-fired power plant west of the Mississippi River.
Like electric utilities around the West, SRP has had to contend with years of low snowpack and rainfall. This raises questions about the future availability of hydroelectric power for SRP, whether generated from its own hydroelectric facilities or purchased from outside entities.
But where SRP stands apart from many of its utility brethren is its expected customer electric load growth, which it says is nearly three times the national average. That expected load growth is driving a lot of capital outlays to build new electric generation.
Another way that SRP parts company with many of its peer electric utilities is its significant commitment to build new gas-fired generation. In mid-September, the SRP board of directors approved plans to construct about 820 MW of quick-start, natural gas-fired, combined cycle generation (NGCC) at an existing power station in Coolidge, Arizona.
"SRP is working diligently to meet the rapidly growing demand for electricity from all customer segments across the (metropolitan Phoenix area), including residential, commercial and industrial," Pamela Syrjala, SRP's director of finance, told Industrial Info in an emailed statement. "Meeting our mission to deliver the energy needed to help our community continue to grow and thrive requires comprehensive planning to ensure we have the appropriate resources to keep electricity reliable and affordable. Our planned expansion of Coolidge Generating Station is a great example of how our ongoing planning process can respond to shifting market conditions and identify needed resources, while supporting our sustainability efforts."
"SRP's capital-improvement program is driven by the need to sustain the generation, transmission and distribution systems in order to meet customer electricity needs and to maintain a satisfactory level of service reliability," she continued. Over the next six years, SRP plans to invest about $6 billion in its power business. About $2.3 billion of that will go to electric generation, $1.7 billion will go to expand the distribution system, $506 million will be invested in transmission, and roughly $1.5 billion will go to a variety of other areas, including information technology, facilities, transportation, metering and water projects, according to SRP spokesperson Erica Sturwold.
Click on the image at right to see a chart of SRP's six-year planned capital program by functional area.
SRP's planned capital outlays do not include the costs of agreements to purchase renewable energy or battery energy-storage capacity from third parties.
One of its largest outlays will go to build 16 gas-fired generating units at an existing power station in Coolidge, Arizona. These new units, totaling about 800 MW, will help SRP "integrate more renewable energy resources into the power grid and allow (it) to provide reliable power to its rapidly growing customer base during times of peak electricity demand, including some of the hottest days in Arizona's summer season," the utility said in an August 24 press release preceding the board of directors' vote.
The new gas turbine generators can ramp up to full production within 10 minutes, the utility said, adding that the new generation could provide enough energy to power about 150,000 average homes when there is high electricity demand in Phoenix's brutally hot summers.
The new generators at the Coolidge Generation Station will be built in two phases, each of which will have a 400-MW capacity and cost about $477 million. Phase 1 construction is scheduled to begin in early 2023 and to be complete by mid-2024. Phase 2 construction is scheduled to start in mid-2024 and to be finished by early-2025.
The decision to build new gas-fired generation was criticized by a group of environmental and energy-efficiency organizations.
"There are all kinds of reasons the SRP Board should have rejected this gas expansion, including the negative impacts on air quality and the high price tag for ratepayers, but ultimately, the main reason is that if SRP is serious about being on a sustainable path and helping to address climate change, it needs to have its actions match its words," said Sandy Bahr, Chapter Director for Sierra Club's Grand Canyon (Arizona) Chapter. "Sustainability and climate goals are just not consistent with this continued reliance on fossil fuels, especially when energy efficiency, solar and wind are so much cleaner and affordable."
But SRP, anticipating pushback to its plans, said that the new generation also will "steadily facilitate the addition of more renewable energy resources, like solar and wind, which can produce intermittent and varying power output."
The utility said the new generation "would not impact SRP's ability to meet its sustainability goals. SRP remains committed to reducing carbon intensity by more than 65% in 2035 and by 90% in 2050, from 2005 levels. SRP's sustainability commitments also include an increased pledge to add 2,025 MW of utility-scale solar energy by 2025. In addition, SRP plans to add 1,600 megawatt-hours (400 MW) of battery storage by 2023, which is among the highest battery storage capacity of any utility in the nation."
In that August 24 statement, SRP General Manager and Chief Executive Officer Mike Hummel said: "SRP is proud of our early deployment of battery technology with one of the largest commitments in battery storage in the West." Adding 800 MW of gas-fired generation in Coolidge "will provide a proven, quick-start generation resource, while SRP obtains operational experience and evaluates the longer-term performance of battery storage technology. Our goal is to build and invest in more battery storage as it improves in reliability and cost."
Click on the image at right to see a graphic about SRP's planned near-term spending on electric resources and programs.
Separately from the Coolidge project, SRP this summer inked power-purchase agreements (PPAs) totaling 500 MW of new solar generation from three locations. And shortly after the Coolidge announcement, the utility announced a PPA with solar and storage developer Clenera LLC (Boise, Idaho), a subsidiary of Enlight Renewable Energy (Tel Aviv, Israel), to build Arizona's largest solar power plant, a 400-MW project called CO Bar Solar, in northern Arizona. Construction of this $576 million project is scheduled to begin in early 2023, and by yearend 2024 it will be operating. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can click here to view the project report for the CO Bar Solar project.
SRP also plans the following major capital projects over the next few years:
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
Like many electric utilities, publicly owned SRP (Tempe, Arizona), which serves more than 1 million electric customers in the metropolitan Phoenix area, is planning to spend heavily to expand its renewable generation portfolio and its transmission & distribution (T&D) network. And like other utilities that once relied heavily on coal, SRP plans to make hefty environmental remediation outlays at its now-closed Navajo Generating Station (NGS), a 1970s-era, three-unit facility that used to have 2,250 megawatts (MW) of generating capacity. That facility closed in 2019. Until its closure, NGS was the largest coal-fired power plant west of the Mississippi River.
Like electric utilities around the West, SRP has had to contend with years of low snowpack and rainfall. This raises questions about the future availability of hydroelectric power for SRP, whether generated from its own hydroelectric facilities or purchased from outside entities.
But where SRP stands apart from many of its utility brethren is its expected customer electric load growth, which it says is nearly three times the national average. That expected load growth is driving a lot of capital outlays to build new electric generation.
Another way that SRP parts company with many of its peer electric utilities is its significant commitment to build new gas-fired generation. In mid-September, the SRP board of directors approved plans to construct about 820 MW of quick-start, natural gas-fired, combined cycle generation (NGCC) at an existing power station in Coolidge, Arizona.
"SRP is working diligently to meet the rapidly growing demand for electricity from all customer segments across the (metropolitan Phoenix area), including residential, commercial and industrial," Pamela Syrjala, SRP's director of finance, told Industrial Info in an emailed statement. "Meeting our mission to deliver the energy needed to help our community continue to grow and thrive requires comprehensive planning to ensure we have the appropriate resources to keep electricity reliable and affordable. Our planned expansion of Coolidge Generating Station is a great example of how our ongoing planning process can respond to shifting market conditions and identify needed resources, while supporting our sustainability efforts."
"SRP's capital-improvement program is driven by the need to sustain the generation, transmission and distribution systems in order to meet customer electricity needs and to maintain a satisfactory level of service reliability," she continued. Over the next six years, SRP plans to invest about $6 billion in its power business. About $2.3 billion of that will go to electric generation, $1.7 billion will go to expand the distribution system, $506 million will be invested in transmission, and roughly $1.5 billion will go to a variety of other areas, including information technology, facilities, transportation, metering and water projects, according to SRP spokesperson Erica Sturwold.
Click on the image at right to see a chart of SRP's six-year planned capital program by functional area.SRP's planned capital outlays do not include the costs of agreements to purchase renewable energy or battery energy-storage capacity from third parties.
One of its largest outlays will go to build 16 gas-fired generating units at an existing power station in Coolidge, Arizona. These new units, totaling about 800 MW, will help SRP "integrate more renewable energy resources into the power grid and allow (it) to provide reliable power to its rapidly growing customer base during times of peak electricity demand, including some of the hottest days in Arizona's summer season," the utility said in an August 24 press release preceding the board of directors' vote.
The new gas turbine generators can ramp up to full production within 10 minutes, the utility said, adding that the new generation could provide enough energy to power about 150,000 average homes when there is high electricity demand in Phoenix's brutally hot summers.
The new generators at the Coolidge Generation Station will be built in two phases, each of which will have a 400-MW capacity and cost about $477 million. Phase 1 construction is scheduled to begin in early 2023 and to be complete by mid-2024. Phase 2 construction is scheduled to start in mid-2024 and to be finished by early-2025.
The decision to build new gas-fired generation was criticized by a group of environmental and energy-efficiency organizations.
"There are all kinds of reasons the SRP Board should have rejected this gas expansion, including the negative impacts on air quality and the high price tag for ratepayers, but ultimately, the main reason is that if SRP is serious about being on a sustainable path and helping to address climate change, it needs to have its actions match its words," said Sandy Bahr, Chapter Director for Sierra Club's Grand Canyon (Arizona) Chapter. "Sustainability and climate goals are just not consistent with this continued reliance on fossil fuels, especially when energy efficiency, solar and wind are so much cleaner and affordable."
But SRP, anticipating pushback to its plans, said that the new generation also will "steadily facilitate the addition of more renewable energy resources, like solar and wind, which can produce intermittent and varying power output."
The utility said the new generation "would not impact SRP's ability to meet its sustainability goals. SRP remains committed to reducing carbon intensity by more than 65% in 2035 and by 90% in 2050, from 2005 levels. SRP's sustainability commitments also include an increased pledge to add 2,025 MW of utility-scale solar energy by 2025. In addition, SRP plans to add 1,600 megawatt-hours (400 MW) of battery storage by 2023, which is among the highest battery storage capacity of any utility in the nation."
In that August 24 statement, SRP General Manager and Chief Executive Officer Mike Hummel said: "SRP is proud of our early deployment of battery technology with one of the largest commitments in battery storage in the West." Adding 800 MW of gas-fired generation in Coolidge "will provide a proven, quick-start generation resource, while SRP obtains operational experience and evaluates the longer-term performance of battery storage technology. Our goal is to build and invest in more battery storage as it improves in reliability and cost."
Click on the image at right to see a graphic about SRP's planned near-term spending on electric resources and programs.Separately from the Coolidge project, SRP this summer inked power-purchase agreements (PPAs) totaling 500 MW of new solar generation from three locations. And shortly after the Coolidge announcement, the utility announced a PPA with solar and storage developer Clenera LLC (Boise, Idaho), a subsidiary of Enlight Renewable Energy (Tel Aviv, Israel), to build Arizona's largest solar power plant, a 400-MW project called CO Bar Solar, in northern Arizona. Construction of this $576 million project is scheduled to begin in early 2023, and by yearend 2024 it will be operating. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can click here to view the project report for the CO Bar Solar project.
SRP also plans the following major capital projects over the next few years:
- Construction of the grassroot Abel Peaking Station, consisting of between 450 MW and 900 MW of gas-fired generation, at a cost of up to $850 million in Queen Creek, Arizona. That project has a scheduled construction start date of late 2024 and a planned in-service date of late 2026. Click here to see the project details.
- Closure of ash ponds at the closed 2,250-MW Navajo Generating Station in Page, Arizona. That project, which could cost up to $800 million, will be undertaken to comply with coal combustion residuals (CCR) requirements. The project report can be viewed here.
- Construction of a 51-mile, 500-kilovolt (kV) transmission line, the Hassayampa-to-West Pinal No. 2 Transmission Line Project. Construction of this $115 million project is slated to begin in late 2024 and to be operational by mid-2025. Click here to view this project report.
- An upgrade of the selective catalyst reduction (SCR) equipment at its Coronado Generating Station (CGS). This $55 million project is expected to break ground in late 2022 and to be complete by yearend 2022. SRP has agreed to close both CGS units no later than 2032. The project report for that project can be viewed here.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
