Duke Energy Corporation (NYSE: DUK) experienced an uptick in its stock value on Wednesday, following the announcement of activating a major grid-scale battery storage installation at the site of its former Allen coal plant, situated along Lake Wylie in the Carolinas. This latest battery energization initiative is part of the company’s broader push to enhance energy storage infrastructure to complement its existing generation portfolio.
The completed installation involves a 50-megawatt (MW), four-hour battery energy storage system. Duke Energy reported that the project incurred costs of approximately $100 million, a figure notably below initial budget estimates, while the timeline also beat projected schedules. Operational readiness tests for the system are currently nearing completion, with final evaluations slated to wrap up in January.
Plans for Larger Energy Storage Integration
Looking ahead, Duke Energy plans to expand its battery storage footprint at the Allen site by commencing work in May on an even more expansive system. This upcoming installation will feature a 167-MW, four-hour battery storage capacity spread over 10 acres of land formerly utilized for emissions control. It will represent the largest battery project the utility has undertaken at that location to date.
Both the recently completed and upcoming lithium-ion battery systems are positioned to benefit from federal investment tax credits, which reimburse approximately 40% of project costs. An additional 10% credit applies as an incentive for reinvesting within local energy communities, effectively lowering the financial burden associated with these capital-intensive projects.
Kendal Bowman, the president of Duke Energy’s North Carolina operations, emphasized the strategic and economic advantages of these initiatives. He remarked, "We're building new resources to keep the Carolinas' economy thriving." He highlighted that repurposing a former coal site for advanced energy storage and leveraging available federal funds not only enhances cost efficiency but also helps catalyze regional economic development.
Utility-Scale Battery Storage’s Operational Role
The incorporation of battery storage at grid scale serves critical operational functions that support renewable energy integration and grid stability. Such batteries can supply power during intervals characterized by limited renewable energy generation, for instance, cold mornings preceding sunrise. Additionally, they allow for the storage of surplus electricity, particularly from adjacent nuclear facilities, which can then be delivered during periods of peak demand.
By buffering the supply-demand balance in this manner, energy storage minimizes disruptions and enhances the utility’s capability to provide reliable power to its customers.
Future Storage Capacity and Energy Mix Strategy
Duke Energy’s Carolinas Resource Plan for 2025 anticipates a substantial expansion of battery storage capacity by 2035, targeting an addition of approximately 6,550 MW. According to the utility, this large-scale battery capacity would be sufficient to meet the power needs of over 5 million homes during times of peak electricity consumption.
Despite aggressive growth in storage and renewables, Duke intends to maintain a balanced energy portfolio comprising solar, storage, nuclear, and natural gas resources. This diversified approach enables the company to address swiftly growing electricity demand patterns with an emphasis on grid reliability.
Currently, Duke Energy provides electricity services to an estimated 8.6 million customers across several states, including North Carolina and South Carolina, underscoring the regional scale and critical nature of its infrastructure investments.
Market Response
Reflecting investor confidence, Duke Energy's shares rose by approximately 1.32% to trade at $117.40 during Wednesday's session, based on data from market information sources.