Powering more than 60,000 homes during record-breaking heat in Arizona

Last summer, Arizona made national headlines for a record-breaking heat wave that renewed concerns over the state’s energy system and the effects of climate change. While temperatures around the globe have increased over the last several decades due to climate change, Arizona in particular has seen a notable increase largely due to the state’s dry weather and especially hot summer months.

With another hot summer looming, concerns over Arizona’s mounting electrical consumption and grid reliability naturally become more pressing, and despite a spate of solar energy projects in Arizona coming online in recent years, the state still needs more to satisfy its rising demand for reliable, clean energy. 

A vast solar and energy storage project

An important new source of renewable energy will come from Longroad Energy’s Serrano project.  Longroad, a Boston-based renewable energy company with a proven track record developing wind, solar and battery projects across the US, recently announced the financial close of the project allowing for construction to begin. Serrano will be a vast solar and energy storage project located in the Pinal and Pima counties of Arizona that is expected to be operational in mid-2025.

The project marks an important milestone in advancing the state’s renewable energy capabilities as the project will have capacity to power roughly 61,000 homes, representing over 330,000 metric tons of CO2 emissions avoided annually.

And the energy storage component of the project will materially add to Arizona’s grid reliability, particularly during the peak demand hot summer months. Grid reliability has become a growing concern due to increased warming from climate change and can have catastrophic consequences on local communities and vulnerable populations. Reliability issues can also be detrimental to the economy – a recent report from the US Department of Energy found that power outages cost American businesses around $150 billion annually.

Renewable energy, reliable grid and helping communities

There is an additional societal benefit, too. As part of Serrano’s commitment to improving local communities across Arizona, during the life of the project Longroad will contribute over $25 million in revenue from the project to Arizona schools and communities through its Right of Way grant with the Arizona State Land Department.

Societe Generale acted as the Coordinating Lead Arranger, LC Issuing Bank and Hedge Provider in the $649 million non-recourse financing agreement. The deal reinforces the commitment the bank has in advancing the renewable energy sector across the US, and in project finance in Arizona in particular. Earlier this year, the firm entered an agreement with Pattern Energy to finance a high-power renewable energy transmission line that will deliver reliable electricity to populous areas in Arizona and other Western states.

“Sustainable and reliable energy infrastructure is crucial in regions across the globe that, predictably, experience extreme weather conditions,” said Ahmed Maqsood, a banker on the Energy + Group, at Societe Generale Americas.  “Serrano was a particularly important deal for us as we look to support projects that will meaningfully contribute to the energy transition.”