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AES Corp Launches Largest Solar Peaker Plant in Hawaii

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The AES Corporation (AES - Free Report) and Kaua’i Island Utility Cooperative recently inaugurated the Lawa'i Solar and Energy Storage Project, which is considered the largest operational solar peaker plant and storage system in the world.

The project is owned and operated by the company’s subsidiary, AES Distributed Energy, Inc. It consists of a 28-megawatt (MW) solar photovoltaic (PV) along with a 100-megawatt hour (MWh) five-hour duration energy storage system.

Hawaiian People at an Advantage

Clean power generation projects like this one will help Hawaii to meet its goal of achieving 100% renewable energy by 2045. The new PV peaker will deliver roughly 11% of Kaua’i’s power, making the island more than 50% powered by renewables.

The fully integrated Lawa'i project will eliminate the use of 3.7 million gallons of diesel annually. Also, this project will serve power to the grid while charging the battery system and providing uninterrupted power supply to users during peak demand periods.

AES Corporation’s Focus on Renewable

The company looks set to target the growing need for renewables and is looking forward to extend its renewable footprint. To this end, the company’s Alto Maipo hydroelectric project in Chile is 70% complete as of September 2018 and is expected to begin commercial operations in the second half of 2020. With the start of the operation, we may expect this hydroelectric plant to substantially boost the company’s renewables portfolio.

As of last September, the company signed nearly 1.9 gigawatts of renewable PPAs including projects under construction, taking the total to 5.7 gigawatts. Currently, the company aims to sign 2-3 GW of new PPAs annually for 2019 and 2020. This would result in 7.5 GW of new renewable PPAs being signed through 2020, all of which would be online by 2022.

The company’s unit AES Distributed Energy has 128 MW of solar plus storage project under construction and more than 250 MW in late stage development. Also, it is currently constructing an additional 19.3 MW solar project coupled with 70 MWh of battery energy storage facility for Kaua’i Island Utility, located on leased land from the U.S. Department of Defense within the Pacific Missile Range Facility — Barking Sands (PMRF) Naval Base.

Renewable Outlook

Renewable Energy source has been gaining momentum in the United States. Wind and solar power have been two of the fastest growing sources of electricity generation over the past decade. Per a latest release from the U.S. Energy Information Administration (EIA), wind, solar and other non-hydropower renewables provided slightly less than 10% of electricity generation in 2017. EIA expects the same to supply more than 10% in 2018 and nearly 11% in 2019.

Despite efforts of the new administration to revive usage of coal in different industries, we could notice that large utilities like NextEra Energy (NEE - Free Report) , Ameren Crop (AEE - Free Report) and CMS Energy (CMS - Free Report) are increasingly investing in renewable resources and lowering toxic emission.

Price Performance

Shares of AES Corporation have outperformed its industry over the past 12 months. The stock has surged 39.6% compared with the 1.6% increase of the industry.



Zacks Rank

AES Corporation 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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