Recurrent Energy, a subsidiary of Canadian Solar, reached a 20-year tolling agreement with Arizona Public Service (APS) for Papago Storage, a 300 MW/1,200 MWh energy storage project under development in Maricopa County, Arizona.

Once operational, Papago Storage would be the largest standalone energy storage project in Arizona. Construction is expected to begin in the third quarter of 2024 with planned commercial operation in the second quarter of 2025. Recurrent Energy began developing Papago Storage in 2016.

In a tolling agreement, the offtaker/charging energy supplier, in this case APS, essentially controls the energy storage asset. Tolling agreements are similar to power purchase agreements. Tolling agreements are the “most common contracted revenue structure for front-of-meter, stand-alone storage assets in the United States today,” according to Orrick’s energy storage market update for 2021-22.

When the announcement was made, officials said the energy storage capacity provided by Papago Storage will complement Arizona’s growing solar energy capacity and help the state meet surging electricity demand.

The agreement for Papago Storage resulted from APS’s request for proposal conducted in May 2022.