Arizona Public Service today released its official forecast of how Arizona will meet its growing energy needs over the next 15 years. The report, called an “Integrated Resource Plan,” takes a big-picture look at Arizona’s energy future that helps APS and other stakeholders plan responsibly. The forecast identified three major trends shaping Arizona’s energy future:
* Arizona’s energy mix will be cleaner. The report predicts that energy from renewable sources will double by 2029. The fastest-growing segment within the renewable category is expected to be rooftop solar, which should triple over the same period. Savings from energy efficiency measures, which are intended to reduce customer demand, are also expected to triple by 2029.
* Natural gas will be the new energy source of choice. Because renewable energy can’t supply customers with steady, predictable energy around the clock, Arizona will need more generation from natural gas, which can start and ramp up quickly, and can provide energy reliably day or night. Over the next 15 years, natural gas is projected to surpass coal and nuclear as the largest source of electricity generation for APS customers. APS still will maintain a diverse, balanced resource portfolio to provide customers with affordable electricity, and manage exposure to fuel price volatility.
* Advanced technology will change the electricity grid. In the next 15 years, APS customers will have more choices about their energy use – smart appliances, plug-in electric vehicles, rooftop solar panels and even the possibility of battery storage. To enable these choices while ensuring safe and reliable electricity, APS is modernizing its electricity grid, making it more dynamic and flexible.
“Arizona’s energy future is bright,” said Tammy McLeod, Vice President of Resource Management for APS. “When we look into the future, we see Arizona’s growing energy needs being met with resources that are increasingly clean, diverse and innovative.”
The report paints an optimistic picture of Arizona’s economic growth. It projects that the state’s energy needs will grow 52 percent in the next 15 years. The requirement for peak demand is predicted to hit nearly 13,000 megawatts by 2029, up 60 percent from today’s peak requirement of 8,124 megawatts. Peak demand measures the amount of electricity being used when energy use is at its highest point.
The projected growth of renewable energy, combined with other actions including the recent closure of three coal-fired units at the APS-operated Four Corners Power Plant, is predicted to make the overall APS energy mix cleaner and more efficient. The report anticipates that in 2029, the APS generation portfolio will produce 14 percent less carbon dioxide and use 24 percent less water per megawatt-hour of electricity generated.
The report also envisions the need for flexible generation and a modern electricity grid. In the past, the electricity grid was like a one-way street. Electricity was generated at large, centralized power plants and delivered to customers at the flip of a switch. Today, power generation is becoming more complex and, in the case of renewable energy, unpredictable and variable based on the weather.
To ensure a steady and reliable energy supply, the report anticipates that utilities like APS will need more generating plants that can respond quickly to changes in customer demand and renewable output. For example, when cloud cover suddenly decreases production from solar sources, APS customers will need smaller, quick-starting generation that can respond within minutes to changing conditions. Power plants fueled with natural gas are better at “ramping,” as it is called, than generating sources such as nuclear and coal.
Along with a more flexible energy mix, Arizona will also need a more flexible, modern electricity grid. APS plans to invest $170 million in modern grid technology over the next five years, in addition to routine grid maintenance and upgrades. This includes installing more than 5,000 advanced devices across the electricity grid that will help APS workers keep it safe and reliable.
APS files its Integrated Resource Plan with the Arizona Corporation Commission every two years, forecasting how it will meet customers’ energy needs over a 15-year planning period.
APS, Arizona’s largest and longest-serving electric utility, serves nearly 1.2 million customers in 11 of the state’s 15 counties. With headquarters in Phoenix, APS is the largest subsidiary of Pinnacle West Capital Corporation (NYSE: PNW).