Tucson Electric Power (TEP) is charting a course toward a carbon-free energy portfolio by 2050, with a full exit from coal planned by 2032. As part of its transitional strategy, TEP is leaning into small, flexible engine-based generation to support grid reliability and complement its growing renewable energy portfolio.
In 2020, TEP commissioned a new power station featuring ten high-efficiency, gas-fueled engines on a legacy site previously home to mid-20th-century coal and gas turbines. Now part of the California Independent System Operator (CAISO) energy imbalance market, the new facility has become so responsive that CAISO operators have had to limit how often they dispatch it - risking the exhaustion of its air permit's allowable starts before midday.
These engines are strategically deployed during morning and evening ramp periods, as well as overnight, allowing TEP's solar assets to dominate during daylight hours. According to plant operators, the flexibility of these engines is so valuable that they'd gladly add ten more if given the chance - especially as coal plants retire and grid stability becomes increasingly dependent on nimble, dispatchable resources.
Why Modular Engine-Based Generation Matters for BTM Buyers
The TEP case study validates the same architectural thesis that runs through Smartland Energy's modular RICE approach for behind-the-meter buyers:
- Engine-level modularity outperforms single-machine concentration when the load is variable, the dispatch is volatile, or the operating environment requires fast ramping. TEP's operators want more engines, not fewer larger units.
- The same topology that works for a regulated utility transitioning off coal works for a BTM buyer that needs N+2, rolling maintenance, and fast start. Smartland delivers the same architecture sized to your load - twelve to fourteen 10 MW engines for a 100 MW BTM site, scaling in 10 MW units as the load grows.
- Future-fuel optionality is built in, not bolted on later.
Toward Net Zero with Clean Fuels
TEP's engine-based strategy is not just a stopgap. These modern thermal units are poised to transition to clean fuels like green hydrogen as the technology matures and supply chains develop. Today's engines can already blend up to 25% hydrogen by volume, and manufacturers are on track to deliver 100% hydrogen-capable engines by 2026. This evolution positions both regulated utilities and BTM buyers to make near-term investments in dispatchable resources that can adapt to a lower-carbon future without forcing a fuel commitment that may be uneconomic for years.
As the energy sector shifts away from the “bigger is better” model, modular engine-based generation offers a compelling architecture for both utility and BTM applications. By investing in engine-based plants alongside renewables and storage, whether on the regulated grid or behind the meter, operators can follow a low-risk, future-ready path toward reliable, dispatchable power without compromising on schedule, ramp, or maintainability.
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