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Exelon (EXC) Unit to Construct 10MW Battery Storage Facility

Exelon Generation, a unit of diversified utility Exelon Corporation EXC, has teamed up with Renewable Energy Systems (“RES”), a leading project developer & constructer, for the construction of a 10-megawatt (“MW”) battery storage facility in Clinton County, OH.

Advantage of a Battery Storage Facility

A battery storage facility is an innovative technology aimed at providing fast-response frequency regulation service to help electric grid operators manage the temporary mismatch between load and generation across the grid. In other words, it will help to protect the grid and ensure proper distribution of electricity from the grid even during load variations.

Details of the Project

The Clinton battery storage project will be powered by Samsung SDI's battery energy storage system, which uses more than 16,000 high-power lithium-ion batteries to ensure performance of the highest quality. The facility will also utilize five Parker Hannifin 2-MW power conversion systems to enhance efficiency and provide longer life.

Construction of the project is scheduled to begin in the second quarter of 2016 and it is expected to come online by the end of this year.

Exelon will have nearly 20 MW of battery storage capacity in its portfolio with the completion of this project. This comprises the 10-MW Clinton battery storage project and 10 MW through its competitive energy company, Constellation.

Other Initiatives

To reduce dependence on its nuclear fleet, Exelon is presently focused on expanding its renewable capacity. The company has recently purchased the 198MW Bluestem wind farm in Beaver County, OK from RES. The facility is scheduled for completion by 2016 end.

To enhance service reliability, the company invests substantially in infrastructure projects. Exelon plans to spend $18 billion, which includes smart meter installation in its existing facilities over the next five years. However, with the recent acquisition of Pepco Holdings, capital investment will likely shoot up to $25 billion over this time frame. Nevertheless, such modernization initiatives are expected to boost Exelon’s performance significantly over the long haul.

Zacks Rank & Key Picks

Exelon Corp. currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the same space include Atlantic Power Corp. AT, CMS Energy Corp. CMS and CenterPoint Energy, Inc. CNP, each carrying a Zacks Rank #2 (Buy).

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