Developer and operator Strata Clean Energy has started construction on its 255MW/1,020MWh Scatter Wash BESS project in Arizona, US.
The project in Phoenix is expected to become operational in 2025 and will provide energy to utility Arizona Public Service (APS) under a 20-year tolling agreement signed in May 2023. The project resulted from an All-Source request for proposals (RFP) issued shortly before.
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Engineering, procurement and construction (EPC) firm Mortensen will deliver the project using Tesla Megapack 2XLs, the EV giant’s grid-scale battery energy storage system (BESS) product.
The project totals US$500 million of investment, Strata said, and is supported by the standalone energy storage investment tax credit (ITC), brought in at the start of 2023 as part of the Inflation Reduction Act. Strata didn’t say how much of the investment would be covered by the ITC, which can cover 30-70% of a project’s cost depending on if it meets various criteria, including domestically manufactured components.
While BESS deployments in Arizona to-date pale in comparison to the US leading markets California and Texas, several 1GWh-plus projects are being built in the state with the long-term tolling agreements providing substantial revenue certainty to enable the investment.
APS has also signed a 20-year tolling agreement – essentially a power purchase agreement (PPA) covering the entire output and operation of a project – with Recurrent Energy for a 1,200MWh BESS project in Maricopa County, (Recurrent Energy is the developer arm of PV and BESS firm Canadian Solar) and others.
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