Az SMART is an abbreviation for Arizona s Solar Market Analysis and Research Tool.

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1 AZ SMART EXECUTIVE SUMMARY Arizona s Solar Market Analysis and Research Tool (Az SMART) is a breakthrough decision environment that enables stakeholders to examine the complex interaction of policy, economic, energy security, environmental and technical issues that impact Arizona s ability to become an international leader in solar power innovation and development. A 3-year research project funded by both industry and government, the focus to date has been upon a utilityscale incarnation of the tool, presented in an immersive seven-screen visualization environment at The Decision Theater at ASU. Preliminary findings suggest that changes may be required to both the business environment and the transmission grid infrastructure if the State is to become a world leader in solar power innovation and generation. WHAT IS AZ SMART? Az SMART is an abbreviation for Arizona s Solar Market Analysis and Research Tool. It is an innovative, integrated tool that examines the complex interaction of policy, economics, energy security, environmental and technical issues impacting upon Arizona s ability to become a world leader in solar power innovation and development. This contrasts sharply with the silo mentality of different disciplines, who predominantly examine the potential for solar power from their own narrow perspectives. Multi-disciplinary research efforts and capabilities at Arizona State University and the University of Arizona have been harnessed in close collaboration with partners from industry and government to create Az SMART. The development of the tool draws from the knowledge and diverse skills of three leading departments at Arizona State University (ASU) Ira A Fulton s School of Engineering, the L William Seidman Research Institute at WP Carey School of Business and the Global Institute of Sustainability s Decision Theater complemented by additional support from a small group of Engineers at the University of Arizona. Funded by the Science Foundation Arizona in partnership with the state s three utility companies (APS, SRP and TEP) and key players within the solar industry (Brightsource, ViaSol and Create-a-Soft), the role of these sponsors extends far beyond merely the financial. The project is to a large extent reliant upon the knowledge base of each partner and stakeholder group, who reviewed the baseline determinants and assumptions to date, and provided the team with essential raw data.

2 Az SMART has already generated significant interest at both a state and national level, despite being a mere 14 months into the three-year project. The ultimate goal of Az SMART is to develop a comprehensive utility- and distributedscale analysis tool, tailored to the examination of a successful roll-out of large-scale solar energy infrastructure in Arizona, and to develop the required electric grid technologies to enable that infrastructure. The insights gained during the study will be relayed to and integrated with the work of existing planning organizations in the West. The principal target audiences for Az SMART are policy/decision makers, utility companies, solar developers and the general public. WHAT HAS BEEN THE FOCUS OF THE RESEARCH TO DATE? The focus of the first year has been an evaluation of the potential for solar development and characteristics at a utility-scale level. The development of a seven-screen tool, ideally viewed within ASU s Decision Theater - the only lab of its kind within Arizona which has been uniquely designed for collaborative decision making. The Az SMART modeling tool s seven screens encompass policy and system specifications, GIS siting, transmission grid impact, economic and environmental consequences plus a summary. o The first two screens set the scene. They enable a user to specify power plant type, state their preferred energy source, make capital cost assumptions and input key system features. Some solar production scenarios have been preprogrammed into the tool. However, Az SMART also includes a customizable Build-your-own option. o The third screen uses GIS mapping to identify solar-feasible areas, highlighting descriptors for each site and potential constraints to its development, from a wildlife and natural resource perspective. This utilizes a graphically-based click and draw map query tool capable of multi-layered on the fly analysis. The GIS screen also demonstrates how the relaxation of some filters can significantly increase the emergence of additional solar-feasible areas. o The impact of Arizona s energy choices upon the current transmission grid is illustrated on screen 4. This uses an integrated version of PowerWorld, which maps the entire western region transmission system. Reflecting upon valuable

3 transmission line constraints provided by APS, SRP and TEP, this part of Az SMART graphically portrays the implication of transmission grid enhancements upon solar generating capacity. o Screens 5 and 6 address the financial, economic and environmental consequences of increased solar generation deployment, identifying trade-offs between energy cost and environmental consequences. These screens currently illustrate: The total levelized cost of delivery per MWh for 17 different types of renewable and non-renewable energy; A through-time levelized cost estimate for 11 types of renewable and non-renewable energy Forecasted impact upon greenhouse gas emissions and other environmental factors o An energy security assessment will be added to screen 6 in due course. o The final screen concludes with a summary of the locational choices made within each scenario, the maximum possible contribution of solar to the energy mix, pricing implications and CO2 effects. The following utility-scale scenarios have to date been modeled: o A business as usual case in which no new solar is added o The addition of 2.7 GW and 6.7 GW of solar generating capacity added onto Bureau of Land Management or privately-owned land o The creation of a new solar facility at Tres Amigas o A customizable Build your own scenario Each scenario draws from a series of white papers examining areas such as regulations and standards, taxes and incentives and the market price of utility scale electricity generation. They also draw from the latest data provided by Arizona s three utility companies, APS, SRP and TEP. An N-1 contingency interpretation of each scenario has also been modeled, to ascertain implications for the current transmission grid. In addition to the utility focus, distributive scale generation pilot studies have also been held in Tucson and on the ASU Tempe campus, as a pre-cursor to a more detailed analysis at the micro level. These have attempted to calculate the maximum area of solar PV panels that can be applied to rooftops in any one area.

4 Presentations of the tool have been made to key stakeholders in both the public and private sectors to share emergent findings, and ensure the research best serves the needs of Arizona. WHAT ARE THE EMERGENT THEMES & CONCLUSIONS TO DATE? Az SMART analyzes the nature of the current business environment from a solar perspective. A desire to go green is not enough. Fundamental changes are needed to the way everybody thinks, works and lives if the state is to successfully switch to greener forms of energy such as solar power. The tool to date has also illustrated the complexity of siting solar installations, including the impact upon natural resources and local wildlife. These issues are not insurmountable. For example, it is possible to ultimately tease out appropriate locations for solar development by reassessing Arizona Game and Fish Department s almost blanket ban on the use of Bureau of Land Management sites for solar installations. However, siting nevertheless remains a potential problem. Az SMART also hints at the limitations of Arizona s current transmission system. That is, the grid as it stands is probably unable to absorb more than 1.8 GW of solar power. This should come as no surprise because the grid was developed for fossil fuels, rather than renewable sources of energy. Carefully planned enhancements to the grid would enable the state in the mid to long term to take greater advantage of solar power, but these will come at a cost, and even then could still create constrain Arizona s ability to benefit in full from the power of the sun. Initial distributive scale pilot studies have also suggested careful attention must be given to the homes and businesses targeted for solar PV panel installations. Some buildings appear better suited to solar power generation than others, due to the direction or gradient of their rooftops relative to the sun. WHAT ARE THE NEXT STAGES IN THE DEVELOPMENT OF AZ SMART? Year 2 of this project will focus upon at least three key areas. o First, the research team will build upon the preliminary distributive scale pilots by extending the application of Az SMART to the micro level. This will include the creation of mathematical models that draw from GIS data to determine the best rooftop locations for the installation of solar PV panels. o Second, work is already underway on a web-based version of Az SMART to enable policy makers and utility providers to take full advantage of the pioneering work outside the Decision Theater laboratory environment.

5 o Third, the team would like to explore the locational, transmission grid and economic implications of Arizona becoming the USA s principal generator and exporter of solar power.