US solar PV and energy storage project developer Strata Clean Energy has signed a long-term tolling agreement for a 150MW/600MWh battery storage project in Arizona, US.
The company announced yesterday (15 July) that it has sealed the 20-year deal with utility company Arizona Public Service (APS) for its Justice Energy Storage battery energy storage system (BESS) project.
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Located in state capital Phoenix, the 4-hour duration BESS asset is planned to go into commercial operation in April 2026 and connect to the utility’s grid. APS serves around 1.4 million customers in 11 out of Arizona’s 15 counties.
The tolling agreement means that APS will have the right to charge and dispatch energy stored in the battery storage facility, while Strata Clean Energy will retain ownership of the asset and be responsible for upholding capacity, reliability and efficiency.
The project was among around a gigawatt of energy resources procured by APS through an all-source request for proposal (RFP) held in June 2023, aligned with the utility’s long-term Integrated Resource Plan (IRP).
That procurement included 700MW of renewable energy resources and will help APS reach its goal of 65% clean energy, including nuclear, and 45% renewables by 2030. Battery storage assets will be especially vital during Arizona’s hot summer months, enabling APS to meet peak demand.
“APS is thoughtfully planning to meet Arizona’s increasing energy needs with a diverse mix of resources that will continue to serve customers with reliable, affordable, and clean power around-the-clock, especially during our summer months. Projects like Justice Energy Storage will benefit customers during some of the hottest parts of the day when they need electricity most,” APS vice president of resource management Brian Cole said.
365 cycles a year, with 97% – 98% availability
The utility had sought a potential variety of contracting structures through the RFP, including renewable energy power purchase agreements (PPAs), renewables-plus-storage and standalone energy storage tolling agreements (including pumped hydro), built-transfer deals for renewables, hybrid and storage asset, and behind-the-meter (BTM) demand response as well as engineering, procurement and construction (EPC) construction for its own projects.
Proposed BESS projects had to allow for 365 equivalent cycles per year with an average state of charging at 50%, although the utility reserved the right to be able to assume some resources would be cycled more than once per day and some days when it might not be cycled at all.
Availability requirement was for at least 97% on non-summer days, and 98% on summer days on a monthly basis, while any projects bidding for PPAs or build-transfer agreements needed to be AC-coupled.
Facilities of longer than 4-hour duration were also eligible, but would have to be cost-competitive with shorter-duration counterparts.
Financial terms of the deal with Strata Clean Energy were not disclosed. The two parties previously signed a tolling agreement in May 2023 for another, larger project, Strata’s 255MW/1,020MWh Scatter Wash BESS.
Construction began on Scatter Wash in January this year, and in February, Strata Clean Energy said it had secured a US$559 million debt and tax equity investment financing package for Scatter Wash, due to go into commercial operation in April 2025.
In June, another Arizona utility company, Salt River Project (SRP), celebrated the inauguration of two BESS projects totalling 340MW output and 1,360MWh of capacity for which it has signed tolling agreements with their developer, Plus Power.
