Gary Zhou 
A new Tesla Megapack project has broken ground in Arizona, and when it comes online in 2024, it will be the state’s largest energy storage system.
For utilities, battery energy storage is one of the most helpful new technologies they can employ to reduce fossil fuel dependence and increase the reliability of their associated grid. By holding onto excess power generated during lulls in demand, power companies can more easily address peak demand and, importantly, reduce costs. Now, a new Tesla Megapack energy storage system is set to do just that in Arizona.
The Sierra Estrella energy storage facility, constructed by utility company Salt River Project (SRP) and energy system constructor Plus Power LLC, will be the largest of its kind in Arizona. The massive network of Tesla Megapacks will have a capacity of 1,000MWh, enough energy to power 56,000 homes for four hours. According to previous information released by SRP, the project was set to cost $400 million, but this does not account for the recent Tesla Megapack price cut.
This comes as Arizona attempts to become a leader in the use of renewable energy generation systems. According to the U.S. Energy Information Administration, Arizona is unsurprisingly the fifth top producer of solar energy, constituting a considerable 9% of its overall power generation. Moreover, while still receiving a significant 43% of its energy from natural gas, other fossil fuels like oil and coal are quickly shrinking in use, representing just over 13% of power generation combined, though nearly all of that share is coal power.
The rest of Arizona’s energy comes from either Nuclear (28%), hydroelectric (5%), or wind (1%). Cumulatively, these six aforementioned sources account for 99% of the state’s energy generation, with hydroelectric pump storage, biomass, and petroleum accounting for the remaining 1%.
This is where Tesla’s energy storage system can come into play to help the transition. By holding power generated, specifically from the state’s numerous solar energy projects, the new Tesla Megapack can prevent fossil fuel plants from having to be turned on in the first place, primarily addressing peak power in the evening in the Arizona summer. SRP notes that it is currently constructing more solar projects, which will feed the Megapack system as they come online in the coming years.
According to SRP, with the new Tesla energy storage project coming online in 2024 and three other energy storage systems coming online later this year, as much as 10% of its power supply will come from energy storage.
