Arizona's energy revolution and critical minerals

Arizona is uniquely positioned to play a vital role in the global energy transition and the development of critical mineral supply chains. With its exceptional solar energy potential and extensive mineral resources, the state is strategically important in the shift towards cleaner, more secure energy systems.

Arizona’s journey towards renewable energy has been marked by both ambition and policy reversals. The state originally established a Renewable Portfolio Standard (RPS) requiring utilities to generate 15% of their electricity from renewable sources by 2025. However, in February 2024, the Arizona Corporation Commission (ACC) repealed this mandate, raising concerns about the future of renewable deployment. Despite this setback, Arizona’s major utilities, such as Tucson Electric Power (TEP) and Arizona Public Service (APS), have voluntarily committed to achieving carbon-free electricity by 2050, maintaining momentum towards decarbonisation.

The synergy between Arizona’s clean energy ambitions and its critical mineral resources highlights its potential as a national leader in the energy transition. Technologies such as batteries, electric vehicles, wind turbines, and solar panels are heavily reliant on minerals that Arizona can supply domestically.

The state benefits from the highest solar energy potential in the United States, providing a strong foundation for clean energy development. Large-scale solar initiatives are already underway, including TEP’s ambitious plan to replace its retiring coal plants with 4,370 megawatts of solar, wind, and battery storage capacity by 2032. The University of Arizona is also contributing to this transformation, having partnered with TEP on a 100% clean energy project that will power the university entirely with solar, wind, and battery storage over the next two decades.

Despite these advances, critical infrastructure challenges remain. The repeal of the RPS risks slowing progress unless voluntary commitments are upheld. Additionally, integrating increasing volumes of renewable energy into the grid will require significant investment in energy storage, transmission infrastructure, and grid modernisation to ensure reliability and resilience.

Arizona is also a major hub for critical minerals that underpin clean energy technologies. The state leads the nation in copper production, a material essential to power grids, wind turbines, solar panels, and electric vehicles. In addition to copper, Arizona is home to a range of other important mineral resources.

The Hermosa Project in southern Arizona is particularly significant. It has the potential to become a major domestic source of zinc and manganese—both vital for battery technologies and energy storage. Notably, the mine could supply the entire US demand for manganese, which is currently met entirely through imports. Arizona also holds valuable deposits of silver, lead, and rare earth elements, further enhancing its strategic mineral profile.

Developing these resources is crucial to reducing dependence on foreign suppliers, particularly as global demand for critical minerals is projected to increase by 400 to 600% over the coming decades. Projects like Hermosa are being supported by federal initiatives such as the FAST-41 programme, which seeks to streamline permitting processes while ensuring environmental safeguards remain in place.

However, mining activities in Arizona have not been free from contention. Projects such as the Hermosa Mine have faced opposition from local communities and environmental groups concerned about potential impacts on biodiversity, water quality, and air pollution, especially in ecologically sensitive areas like the Patagonia Mountains. Addressing these concerns will be key to building public trust and securing the social licence to operate.

The expansion of critical mineral production will also require investment in education and workforce development. Arizona’s universities are playing an active role in this area, researching innovative methods to make mining more sustainable while addressing skilled labour shortages in the sector. At the policy level, there is a growing recognition of the need to reform permitting systems to reduce delays without compromising environmental standards. Drawing on international best practices could help achieve this balance.