Boulder City, Nev., was founded to house a workforce to build the Hoover Dam and electrify the Southwestern U.S. Now, as severe drought imperils the iconic New Deal-era hydroelectric plant, the sunbaked town 20 miles south of Las Vegas is at the center of the region's next renewable energy building boom.

Spread over 1,053 acres on the outskirts of Boulder City, Arevon Energy Inc.'s recently completed Townsite Solar Project relies on half a million photovoltaic, or PV, panels from First Solar Inc. and dozens of lithium-ion battery Megapacks from Tesla Inc. to convert sunshine into electricity and deliver it into the night. With 180 MW of solar and 90 MW of four-hour energy storage capacity, Townsite supplies the Boulder City municipal utility and cooperative Valley Electric Association Inc. in Nevada, as well as Glendale Water & Power, a city-run electric company near Los Angeles.

The facility is a forerunner of an emerging fleet of battery-equipped PV plants reshaping power supply in the Desert Southwest and beyond, including more than 150 such large-scale hybrid facilities planned to enter service across the U.S. over the next two years, according to S&P Global Market Intelligence data.

Some of the largest of those near-term projects are under development in Nevada, facilitated by wide-open sunny spaces, grid investments and strong demand for carbon-free power in Nevada and California, which connects to the Silver State through the California ISO transmission system.

"Southern Nevada does have some of the best solar resource, favorable conditions and everything for building and operating projects, so it [has] among the lowest [levelized costs] in the nation," Justin Johnson, COO at Arevon, an affiliate of Swiss asset management firm Capital Dynamics Holding AG, said in an interview.

Batteries are helping bridge a growing need for new peak power plants as increasingly large volumes of solar energy go offline at sunset. Storage technology is emerging as a solution as competition intensifies for the West's drought-depleted hydro resources and buyers seek alternatives to fossil fuels.

"The end result is that as a developer you can get a higher price for your energy storage simply because you are able to store excess solar energy in the middle of the day, when it's really cheap, and deliver it every evening ... when comparative prices are higher," Johnson said.

In Nevada and other southwestern states, "storage is becoming not just an appealing addition to solar, but a necessary one," said Adam Wilson, renewable energy analyst at Market Intelligence.

The lucrative pairing, which benefits from federal investment tax incentives that apply to both solar and storage when configured as a hybrid, is "a potentially feasible replacement to retiring fossil fuel generation as states ramp up their clean energy transition," Wilson said.

Replacing coal

NV Energy Inc., the largest utility in Nevada and an affiliate of Berkshire Hathaway Energy, plans to shutter the last of its coal-fired generation, the 522-MW North Valmy Station in Humboldt County, Nev., with help from a combined 600 MW of solar and 480 MW/1,920 MWh of lithium-ion battery storage at two nearby projects.

The Public Utilities Commission of Nevada in December 2021 gave NV Energy permission to purchase Primergy Solar LLC's Iron Point Solar Project and Hot Pot Solar Project before they come online in 2023 and 2024, respectively, under build-transfer agreements. The coal plant is scheduled to close in 2025.

Iron Point's solar output is priced at $25.86 per MWh over 25 years with a fixed energy storage price of $6,800 per megawatt-month, according to state regulatory documents. Hot Pot's PV generation is fixed at $24.99/MWh with battery storage also priced at $6,800 per megawatt-month. The projects have levelized energy costs of roughly $50/MWh-$51/MWh, which include transmission investments to connect to NV Energy's Valmy substation.

While these are not the absolute lowest prices NV Energy has secured for such assets, the PUC found the contracts "just and reasonable."

Solar-plus-storage stations have become the core of NV Energy's strategy for meeting a state requirement to cover 50% of retail power sales with renewable energy resources by 2030. Over the next two years, the utility plans to add at least 10 such projects to its power mix, totaling 2,668 MW of solar and 1,483 MW of batteries, largely with four hours of energy storage capacity.

'The key is balance'

NV Energy is preparing for larger volumes of renewable energy in the second half of this decade, including roughly 5,000 MW to be accessed through its $2.5 billion Greenlink Nevada transmission project.

In addition, Gov. Steve Sisolak signed legislation in 2021 that sets up a regional grid coordination task force and requires providers to join a regional transmission organization by Jan. 1, 2030.

The transmission expansion, surging renewable energy demand across the region from utilities and tech companies, and the Biden administration's goal to permit 25 GW of renewable energy capacity on public lands by 2025 prompted an unprecedented wave of development in 2021.

NextEra Energy Resources LLC, EDF Renewables Development Inc., 8minute Solar Energy LLC, Primergy and other developers have proposed more than two dozen large-scale solar-plus-storage projects on more than 213,000 acres of federal land under U.S. Bureau of Land Management, or BLM, jurisdiction since President Joe Biden took office.

That includes up to roughly 22 GW of solar coupled with over 17 GW of storage. Most of that is in the early planning stages.

The largest of the proposals is the massive Chill Sun Solar Project in Nye County, with a capacity of up to 2,250 MW coupled with an unspecified amount of energy storage. Naturgy Candela Devco LLC, a joint development affiliate of Spanish energy giant Naturgy Energy Group SA and San Francisco-based Candela Renewables LLC, filed a notice with state regulators and an application with the BLM in January.

The partners hope to begin building the first phase of Chill Sun, which would connect to NV Energy's Greenlink West line, in 2025.

The proposal is "extremely conceptual at this time" and will be refined based on feedback from the interconnection process, environmental limitations and public feedback, John Franklin, a spokesperson for Candela Renewables, said in an email.

Nye County officials have expressed concerns over the environmental impacts of other proposed large-scale PV and solar-plus-storage projects on BLM land, including Candela's Rough Hat 2 Solar Project in southern Nevada's Pahrump Valley, near the California border.

Citing "considerable opposition" from residents, the Nye County Board of Commissioners sent a letter to the BLM's Pahrump field office Feb. 1, calling for Candela "to reconsider the location of their project."

As solar and battery development enters a new phase of growth in the Desert Southwest, the company said it hears those concerns.

"Solar development always benefits from input," Franklin said. "Communities also benefit from solar development. The key is balance."