AES Receives Loan Guarantee for NY Energy Storage System

The U.S. Department of Energy on Tuesday offered AES Energy Storage, LLC (NYSE: AES) a conditional commitment for a loan guarantee for $17.1 million to support the construction of a 20-megawatts (MW) energy storage system using advanced lithium-ion batteries. 

The AES project, located in Johnson City, New York, aims to provide a more stable and efficient electrical grid for the state’s high-voltage transmission network.

Traditionally, grid frequency regulation, which is needed to balance
power generation and consumption on the grid, is maintained by burning
additional fossil fuels at power plants.  The AES project eliminates the
need to burn fossil fuels and instead uses battery technology and new
software that will provide the same regulation at a lower price. This
advanced frequency regulation capability will allow renewable
electricity generation to play a larger role in New York’s transmission
network. 

The AES technology can help reduce carbon emissions by 70% compared to frequency regulation provided by fossil energy
suppliers.

The AES project will include lithium-ion battery
cells from A123Systems, Inc., (Nasdaq: AONE). The two companies have worked together in the past to provide utility-scale energy storage in Chile. The contained battery and
related electrical systems are assembled, tested and validated in an
A123 manufacturing facility in Hopkinton, MA. 

"This loan guarantee will allow for renewable energy sources like solar and wind to play a greater role in the Southern Tier," said  New York Congressman Maurice Hinchey. "It will also make the area’s electrical grid more efficient and reliable, helping to cut energy costs over the long run."

Including today’s announcement, the Department of Energy has offered conditional commitments for loan guarantees to support 14 clean energy projects. However, California governor Arnold Schwarzenegger recently sent a letter to Energy Secretary Steven Chu urging him to speed the approval process for numerous California projects that must break ground before the end of the year, or risk loosing stimulus funding. 

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