Southern California Edison (SCE), a subsidiary of Edison International (NYSE: EIX), announced that it has finalized an agreement with the U.S. Department of Energy (DOE) for a $25 million stimulus grant to develop and conduct a comprehensive demonstration of lithium-ion battery storage for energy generated by wind projects.
SCE will collaborate on the project with
U.S. battery manufacturer A123 Systems (Nasdaq: AONE) and the
California Independent System Operator Corporation.
The DOE funding is one of 32 stimulus grants awarded late last year to demonstrate advanced Smart Grid technologies and integrated systems under the American Recovery and Reinvestment Act. SCE will use the funds to facilitate increased integration of wind-powered generation from the Tehachapi region in Southern California into the electric grid in order to help the state meet its ambitious renewable energy goals.
The $25 million DOE grant matches funds totaling $29.9 million provided by SCE and its partners, including a $1 million grant from the California Energy Commission, resulting in a total project cost of $54.9 million.
Energy storage is an emerging industry and consists of many technologies with a broad range of potential uses. Batteries and other energy storage solutions can potentially support grid operations in many ways, one of which is to mitigate the impact of unpredictable wind patterns on energy production, enabling wind-powered generation to grow even more.
The Tehachapi Wind Energy Storage Project is expected to spur broader demand for the technology, bringing production to a scale that will make this form of energy storage more affordable. Cost-effective energy storage will allow for a smarter grid and facilitate integration of intermittent renewable resources.
The project will be deployed at an SCE substation that serves the Tehachapi area, approximately 100 miles north of Los Angeles. The battery system will be installed in early 2012 with testing taking place through the end of 2014. The project results will be made available in early 2015.
Earlier this week U.S. Energy Secretary Steven Chu said the U.S. has not yet fully explored the potential of pumped hydro energy storage, which offers greater capacity and lower per-watt costs compared to battery storage.