Ormat Technologies, Inc. (ORA - Free Report) announced that its subsidiary, Viridity Energy Solutions, Inc. will start the construction of two 20 megawatt (MW)/20MWh utility scale, in-front-of-the-meter battery energy storage systems (“BESS”) located in Plumsted Township and Alpha, NJ.
The BESS will assist in balancing energy demand in the electricity grid and is expected to generate revenues in the range of $7-$8 million in 2019. The revenues will be based on spot price, which generally varies from period to period.
Details of the Project
Viridity Energy Solutions will utilize Dynapower Company’s inverters and LG Chem’s modules for the two 20MW/20MWh BESSs. In addition, Viridity’s VPower™ software will provide the visualization, optimization, economic value stacking and automated control of the BESS, which in turn will result in better performance of the electric grid.
Importance of the Storage Project
Our general conception is that electricity needs to be consumed as and when it is produced. However, development of the utility-scale battery storage projects has changed that concept as it helps in the storage of electricity. Batteries store electricity at times of oversupply when market prices are low and release it later when there is a shortage during high prices at peak hours or when there is a scarcity in supply from other sources of electricity generation.
Plus, the increasing generation of electricity from renewable sources like solar, wind and water also increases the need and importance of battery storage projects. Renewable sources like sun rays are not available 24x7 to satisfy our demand for electricity, so these batteries help to store the energy to be used later when sun rays are not available.
Future of Energy Storage
Per U.S. Energy Information Administration (EIA) release, more than 700 MW of battery storage units have already been installed in the United States.
Large utilities like NextEra Energy (NEE - Free Report) , Duke Energy (DUK - Free Report) and National Grid plc (NGG - Free Report) have started to invest in battery storage projects. We expect more battery storage units to be installed across the United States, given the increasing production of electricity from renewable sources.
The research report from IHS indicates the global energy storage market to expand at a very fast pace, with total installation surging from 6 gigawatts (GW) in 2017 to more than 40 GW by 2022.
In a month’s time, shares of Ormat Technologies have outperformed its industry. The stock has gained 3.4% compared with the industry’s decline of 4.4%.
Ormat Technologies has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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