Duke Energy Corp. DUK recently began operating the largest battery system in North Carolina, which is a 9-megawatt (MW) lithium-ion Samsung battery system. The storage system is operating next to a Duke Energy substation in the Shiloh community.
With a total cost of nearly $15 million, the project will primarily be used to help the electric system operate more efficiently. The project will further provide energy support to the electric system, including frequency regulation and other grid support services.
Duke Energy’s Role in Battery Storage
Duke Energy has more than a decade of experience with battery storage and thus plays a vital role in the usage of battery technology on the grid. The company is rapidly enhancing its storage portfolio, realizing the growth prospects. In Madison County, Duke Energy is planning to install a 4-MW lithium-ion battery system that will help improve electric reliability for the town, along with providing services to the overall electric system. Whereas in South Carolina, the company is planning to install a 5-MW lithium-ion battery system that will provide backup power at the facility and benefits to the bulk power system to enhance reliability.
Notably, Duke Energy is one of the leading and premier utility service providers in the United States, offering efficient power and energy services, and battery storage facilities. The company has plans to invest $600 million for 375 MW of energy storage across its regulated businesses, as energy storage will be pivotal in reducing its carbon emissions by at least 50% by 2030 and achieve net-zero carbon emissions by 2050. In line with executing such plans, the company expects to install more than 15,000 MW of additional energy storage by 2030.
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, utility companies are increasingly focusing on reducing emissions by implementing innovative technologies like battery storage systems. Per a report by the U.S. Energy Information Administration (EIA), 869 MW of battery storage projects were being operated in the United States at the end of 2018, representing 1,236 megawatt hours (MWh) of energy capacity. In fact, EIA expects utility-scale battery storage power capacity to exceed 2,500 MW by 2023.
Such growth prospects must have encouraged utilities like Duke Energy to increase their focus on enhancing their battery storage portfolio. In line with this, other utilities are also following suit.
Notably, companies like Xcel Energy Inc XEL, NextEra Energy NEE and PG&E Corp PCG are also investing in battery storage projects to benefit from the prospects in the market.
Xcel Energy's long-term plan includes the addition of approximately 275 MW of battery storage. NextEra Energy, meanwhile, has more energy storage capacity than any other company in the United States, with more than 150 MW of battery energy storage systems in operation. In July 2020, PG&E has requested approval for a filing with the California Public Utilities Commission (CPUC) for expanding its battery energy storage capacity by a total of 423 MW.
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 the year-to-date period, Duke Energy’s shares have lost 12.8% compared with the industry’s 15% decline.
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Xcel Energy Inc. (XEL): Free Stock Analysis Report
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