Nucor Deploys 50MW Battery Arizona Steel Mill
- C&I Storage Energy Storage News
Marin Holt
- 0
- 5 minutes read
- 50 MW/200 MWh BESS using 58 Tesla Megapack 2XL units, largest behind-the-meter project in Arizona
- Ameresco owns and AEPCO operates under 20-year Storage Services Agreement starting October 2025
- Nucor Kingman bar mill expanding to 600,000 tons annual capacity with new electric arc furnace
- 25 MW AC solar array scheduled for 2026 to complement battery storage system
- Construction completed in 10 months from December 2024 to October 2025
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Ameresco completed a 50 MW/200 MWh battery energy storage system at Nucor’s steel bar mill in Kingman, Arizona, in October 2025. The installation is the largest behind-the-meter storage project in Arizona and ranks among the top five nationally. Nucor, North America’s largest steel producer, uses the system to stabilize electric load from a new electric arc furnace as part of a facility expansion targeting 600,000 tons of annual production capacity.
What Is Being Built
The system comprises 58 Tesla Megapack 2XL units installed at a Nucor substation within Mohave Electric Cooperative’s service territory. Arizona Electric Power Cooperative (AEPCO) operates the battery system under a 20-year Storage Services Agreement, with Ameresco retaining ownership. Construction began in December 2024, and the system achieved commercial operation within ten months.
A companion 25 MW AC solar array, also developed by Ameresco, is scheduled to begin operation in 2026. The solar asset charges the battery system, which then discharges directly to support bar mill operations, reduce peak demand draws from the grid, and provide backup power during outages. GreenFront Energy Partners served as Nucor’s advisor on contracting and structuring for both solar and storage projects.
Why It Matters
Electric arc furnaces create extreme demand spikes that represent 30 to 40 percent of an industrial facility’s monthly electricity bill through demand charges. By smoothing these peaks with onsite storage, Nucor reduces strain on the local cooperative grid while lowering its own energy costs. The project demonstrates a replicable model for heavy industrial facilities seeking to manage demand charges while integrating renewable energy, and establishes Arizona as a proving ground for large-scale behind-the-meter storage at industrial sites.
Critical Perspective
The 20-year Storage Services Agreement locks Ameresco and AEPCO into a long-term commitment at a fixed structure that predates the next decade of battery chemistry advances. Electric arc furnace operations generate severe flicker and 5th/7th harmonic currents that, at the scale of a 50 MW industrial load, stress Mohave Electric Cooperative’s distribution infrastructure in ways the BESS smooths internally but does not eliminate at the interconnection point. Relying on 58 Tesla Megapack 2XL units from a single vendor concentrates supply chain risk across a 200 MWh installation with no disclosed redundancy provision for AEPCO’s 20-year service commitment.
