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Duke Energy to Add 3 Battery Energy Storage Sites in Florida

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Duke Energy Corp’s (DUK - Free Report) subsidiary, Duke Energy Florida, recently announced plans to build three battery energy storage sites, and add nearly 30 megawatts to enhance power quality and critical services during outages. The addition of the three new battery storage sites is expected to be instrumental in addressing the overall electric-grid efficiency and reliability. All three sites are on track to be completed by the end of 2021.

A Brief on the Battery Storage Sites

One of the aforementioned battery-energy storage sites is an 18-megawatt lithium battery site that will be built at the company’s 45-megawatt Lake Placid Solar Power Plant, which will boost the overall plant efficiency.

Duke Energy Florida will also build 8.25 megawatts of storage in Alachua County to enhance the power quality. It will further add a 3.5-megawatt microgrid of solar-plus storage at John Hopkins Middle School that will support grid operations and provide backup electric power to the school.

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. As part of Duke Energy Florida’s commitment to renewables, the company is investing an estimated $1 billion to construct or acquire a total of 700 megawatts of cost-effective solar power facilities, and 50 megawatts of battery storage through 2022.

In addition to fortifying its battery-storage technology and solar investments, Duke Energy Florida is investing in transportation electrification to support the adoption of electric vehicles. It is also investing in 530 electric-vehicle charging stations and a modernized power grid to deliver reliable energy solutions to customers.

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. It has plans to invest $600 million for 375 MW of energy storage across the company’s 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 in U.S.

With heightening environmental awareness, the U.S. electric utility industry is shifting its focus toward 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, the EIA expects the 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 focus on enhancing their battery storage portfolio. In line with this, other utilities are also following suit.

Notably, Xcel Energy's (XEL - Free Report) long-term plan includes the addition of approximately 275 MW of battery storage. NextEra Energy (NEE - Free Report) , 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. This July, PG&E (PCG - Free Report) 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 carries a Zacks Rank #3 (Hold), at present. 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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