Dive Brief:

• The Sierra Club has appealed an air quality permit issued to Arizona Public Service to upgrade its Ocotillo Power Plant in Tempe, the Arizona Republic reports. The environmental group argues the way APS plans to use its generators would increase carbon dioxide emissions to a level high enough to cancel out benefits over a coal plant.
• APS plans to spend up to $700 million to replace Ocotillo’s two 110 MW steam generators and with five less water-intensive and more fuel efficient natural gas turbines. The retrofit would leave in place two 55 MW natural gas generators built in the 1970s.
• The Sierra Club appeal argues APS plans to idle the new units at low capacity in order to ramp them up quickly to respond to variations in solar and other renewable generation. That idling is both “inefficient” as well as “unreasonable and unnecessary,” Sierra Club says, and would significantly increase emissions.

Dive Insight:

In its filing, the Sierra Club argues APS should consider running the natural gas turbines in standard operational mode, which creates about half the emissions of a coal plant, and storing the electricity they generate in grid-scale batteries for later use as flexible dispatch.

Earlier this month, the environmental group announced its opposition to the gas upgrade at the Ocotillo plant, saying in a release that the generators "would be allowed to emit greenhouse gases at a rate of 1,690 lb CO2/MWh ... almost the same as a coal plant."

An APS spokesperson, however, told the Republic this week that comparing the Ocotillo plant to a coal generator is "convoluted."

"[I]t's not running at full capacity all the time," Steven Gotfried said of the plant. "There are five units. They turn up, they turn down. That's how power plants work."

The retrofit will increase the Ocotillo plants’ combined capacity from 330 MW to 620 MW. Construction was scheduled to be completed in 2018 but the appeal may slow the process.

While there is no debate over the need for fast-ramping power capacity to balance the variability of renewable generation, an emerging divide in Arizona and elsewhere is what resource should provide that capability. While modern gas generators can typically handle the job, environmental and renewable energy advocates point to battery storage as a resource that could one day supplant the need for such fossil fuel facilities. 

But batteries — while coming down quickly in price — are still relatively expensive. In the shorter term, there are flexibility opportunities in shorter dispatch intervals, advanced weather forecasting, and enhanced demand management and efficiency technologies, according to a recent report from think tank Energy Innovation. Those currently-available options could be more cost effective for utilities and grid operators than both energy storage and gas generation, the analysts wrote.