The Indiana Utility Regulatory Commission (IURC) has approved a proposed large-scale battery storage project developed by AES Corporation's regional utility subsidiary in the US.
AES Indiana said late last week (January 26) that the regulator had approved the 200MW/800MWh battery storage project in Pike County, Indiana. The standalone Battery Energy Storage System (BESS) asset is expected to come online in December of this year.
The asset is being constructed at the site of AES' Petersburg Generating Station coal-fired power plant in Indiana and the last coal-fired power plant in its portfolio. The coal-fired units at the 2,146MW plant will be shut down by 2025 as parent company AES has committed to exiting coal, and AES has proposed to convert the facility to natural gas, in addition to developing hundreds of megawatts of wind, solar photovoltaic and batteries in the region.
The project would connect to the Mid-Continent Independent System Operator (MISO) grid and the ISO's wholesale market. AES Indiana, formerly known as Indianapolis Power & Light (IPL), which has about 500,000 customers in Indianapolis and central Indiana, said it will bring MISO online in the 2024-2025 winter season, when demand typically peaks. The utility issued a request for proposals (RFP) in February 2022 that calls for system delivery to be accomplished on a turnkey basis, i.e., not a power purchase agreement (PPA) or other third-party contract. BESS will be connected to the AES Indiana transmission line via a new substation.
Midwestern U.S. Has Underlying Drivers for Strong BESS Demand
In AES Indiana's recently filed 2022 Integrated Resource Plan (IRP), the company identified an additional 1,300 MW of wind, solar PV and battery storage in its resource portfolio by 2027.
The utility has been criticized for choosing to partially replace coal generating capacity with natural gas, but believes that a mix of renewables and natural gas will be the best combination to maintain supply reliability year-round and meet growing peak demand. In general, MISO and the Midwest have traditionally relied heavily on coal for power generation.
Michigan recently adopted a state energy storage deployment goal of 2,500 megawatts (MW) by 2030, becoming the first Midwestern state to adopt a 100 percent clean energy standard by 2040. Michigan has set the pace for the Midwest's energy transition as clean energy legislation passed late last year.
The Midwest's need for energy capacity to make up for supply shortfalls as coal plants are retired and demand increases with electrification means the Midwest has the fundamental drivers to become one of the largest battery storage markets in the United States. In late 2022, MISO added energy storage to its wholesale market portfolio, adopting the definition of an energy storage resource (ESR) used by the Federal Energy Regulatory Commission (FERC).
MISO modeled its portfolio with four hours of lithium-ion battery storage, leading developers to propose BESS projects of that duration, such as AES Indiana's Pike County project.
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