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Dominion (D) Works on New Battery Storage Project in Virginia

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Dominion Energy Inc. (D - Free Report) proposed a new battery storage pilot project in a filing with the Virginia State Corporation Commission (SCC). This project will increase the efficiency of the batteries and enable them to provide power for a longer period to the grid compared with other existing batteries.

The planned project is being developed at a crucial moment for the company, which is also building the second-biggest solar fleet in the United States and the country's largest offshore wind project.

In addition to SCC’s approval, the development plan would need to be approved by Henrico County. If approved, construction could start by the end of 2024 and the project could be up and running by the end of 2026.

Benefits of the Project

The pilot project, which will be situated at the current Darbytown Power Station in Henrico County, will test two lithium-ion battery substitutes — zinc-hybrid batteries created by Eos Energy Enterprises (EOSE - Free Report) and iron-air batteries created by Form Energy. Form Energy’s iron-air battery technology has a discharge life of 100 hours, much longer than the life of those currently on the market. The average duration of the batteries in the company's fleet and in the United States is four hours or less.

Two innovative technologies that can potentially replace conventional lithium-ion batteries in the Darbytown Storage Pilot Project will be tested because they could provide improved safety features for battery storage.

Growth Prospects

Utilities in the United States are gradually gaining strength from renewable sources of energy, with an increased focus on solar and battery storage projects. Battery storage capacity in the country has grown rapidly over the past couple of years. Per the U.S. Energy Information Administration, battery capacity in the United States is likely to double in 2023, with a planned capacity addition of nearly 9.4 gigawatts (GW). This represents the immense potential for battery storage project infrastructure expansion for utilities.

Dominion’s long-term objective is to add 24 GW of battery storage, solar, hydro and wind (offshore as well as onshore) projects by 2036 and increase the renewable energy capacity by more than 15% per year, on average, over the next 15 years. By 2035, D also intends to make zero and low-emitting resources accountable for 99% of the company’s electric generation. The company is working on offshore wind projects, battery storage projects and hydropower projects to lower emissions.

The battery storage pilot project would complement Dominion Virginia’s growing battery storage portfolio, which currently includes three large-scale storage facilities operating in the Powhatan County area, New Kent County and Hanover County areas, as well as three more in the planning stages in Chesterfield, Sussex and Loudoun Counties.

Apart from Dominion, other electric power utility companies like Alliant Energy Corp. (LNT - Free Report) and Duke Energy Corp. (DUK - Free Report) are also focused on the battery storage projects in the United States.

In August 2023, the Public Service Commission of Wisconsin approved two Alliant Energy battery energy storage projects — the 100-megawatt (MW) Grant County Battery Project and the 75-MW Wood County Battery Project.

LNT’s long-term (three to five years) earnings growth rate is 6.47%. The Zacks Consensus Estimate for its 2023 EPS indicates an increase of 2.5% year over year.  

In March 2023, Duke Energy commenced operations at its battery storage project in Onslow County, NC. The project, which boasts a capacity of 11 MW, is claimed to be the largest storage facility in the state.

DUK’s long-term earnings growth rate is 6.09%. The Zacks Consensus Estimate for its 2023 EPS indicates an increase of 6.5% year over year. 

Price Performance

In the past month, shares of Dominion have lost 0.6% against the industry’s 0.2% growth.

 

Zacks Investment Research
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Zacks Rank

Dominion currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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