[SMM Analysis] Arizona's Largest Battery Energy Storage System Goes Online to Meet Meta Data Centre's Needs

Danish renewable energy giant Ørsted and US utility company Salt River Project (SRP) announced that their 300-megawatt solar plus energy storage project in Pinal County, Arizona, has begun operations.

The Eleven Mile Solar Centre, located south of the state capital Phoenix, is equipped with a 300-megawatt/1200-megawatt hour battery energy storage system (BESS) that can last for four hours.

Last year, tech giant Meta signed a power purchase agreement (PPA) with the project owner to ensure that most of the electricity generated by the solar photovoltaic plant would be used for a data centre in Mesa, with the remaining power supplied to SRP customers in the area.

The project's battery energy storage system is the largest in Arizona to date. The state ranked in the top three for grid-scale storage deployments in Q2 2024.

The Eleven Mile Solar Centre represents an approximately $1 billion investment by Ørsted in clean energy in Arizona. The company stated that this would bring about $80 million in tax revenue to the local community for public services.

Additionally, the project supports the US economy by employing domestic companies for its development. These companies include US thin-film manufacturer First Solar, energy storage integrator Fluence, and photovoltaic tracker manufacturer Nextracker.

The demand for power consumption by large data centre customers, coupled with the desire for green energy, is driving the development of energy storage and renewable energy businesses in the US. This hybrid solar plus energy storage project has taken over the title of "Arizona's Largest Operating BESS" from another Salt River Project solar plus energy storage plant, the Sonoran Solar Energy Centre.

The project pairs 260 megawatts of solar photovoltaic with a 260-megawatt/1000-megawatt hour BESS and went online in March. Developed by NextEra Energy Resources, the Sonoran Solar Energy Centre will provide power for another tech giant's data centre needs, specifically Google's facility under construction in Mesa. Salt River Project and other utilities in the state, particularly Arizona Public Service (APS), are signing a series of long-term procurement agreements to acquire solar plus energy storage resources. Tucson Electric Power is seeking to build its own 200-megawatt/800-megawatt hour BESS asset, which will be the utility's second asset of the same scale.

Sonoran and Eleven Mile are the first gigawatt-hour scale battery systems in Arizona, but other similarly scaled systems may follow: last month, institutional investor Copenhagen Infrastructure Partners (CIP) completed financing for a 1-gigawatt hour standalone BESS project in the state.

Ørsted Americas CEO David Hardy, speaking about the Eleven Mile Solar Centre, said: "Due to the surge in data centres and the reshoring of US manufacturing, Arizona's power demand growth rate is among the highest in the nation. With our first project in Arizona now complete, we are excited to help meet the growing demand in the state and region, providing reliable, domestic energy."

A few months ago, Ørsted formally established a partnership with developer Mission Clean Energy to undertake BESS projects in the Midcontinent Independent System Operator (MISO) region, aiming to develop 1 gigawatt of capacity.