Yahoo Finance Duke Energy's Arm Inks Deal to Build Battery Storage Project
Duke Energy Corp.’s DUK subsidiary, Duke Energy Carolinas, recently announced its agreement with Anderson County, S.C., to build energy storage project at the Anderson Civic Center.
Notably, the project will be used as back-up power with a capacity to serve the Civic Center for at least 30 hours based on normal usage during outages. The company has submitted a request to the Public Service Commission of South Carolina for approval of the lease agreement for the land from Anderson County.
After the expected completion of final engineering study later in 2019, the project will go through a competitive bidding process for construction and is expected to be in service in early 2021.
Benefits of the Investment
One of the largest drawbacks of electricity generation from renewable energy sources is that it fails to provide electricity 24x7. Electricity generated from wind and solar energy sources requires storage, which can be used during periods of shortage. Increasing usage of battery storage promotes renewable energy as well as reduces the dependency on grid. Investments in such projects ensure significant energy grid support in any region.
The latest project is part of the company's Integrated Resource Plan (IRP), which was announced in October 2019. Per the plan, the company will invest $500 million in battery storage projects in Carolinas over the next 15 years for electricity generation capacity of 300 MW.
The company is also undertaking initiatives to build battery storage projects in other states. In June 2018, its subsidiary — Duke Energy Florida (DEF) — announced plans to construct three battery storage projects with 22 MW capacities. During the second quarter of 2019, the company announced 22 MW of battery storage projects in the Sunshine state, kicking off the first wave of its planned 50-MW pilot program. These initiatives are likely to expand Duke Energy’s growth prospects in the booming battery storage market.
Battery Storage Prospects
With increasing environmental awareness, the U.S. electric utility industry is shifting focus to renewable sources for electricity generation. To this end, the companies are trying to lower emission by implementing innovative technologies like battery storage. Per the U.S. Energy Information Administration (EIA), 899 MW of battery storage projects were being operated in the United States as of March 2019. Moreover, EIA expects battery storage power capacity to exceed 2,500 MW by 2023.
Xcel Energy Inc XEL, NextEra Energy NEE and PG&E Corp PCG are also investing in battery storage projects and benefit from the prospects in the battery storage market.
Zacks Rank & Price Performance
Duke Energy has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In a year’s time, Duke Energy’s shares have gained 17.6% compared with the industry’s 12.3% rise.
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