LOS ANGELES, April 27 (Reuters) - AES Corp unveiled plans on Monday to expand its energy storage business into Europe and in new U.S. markets as the power industry aims to boost the reliability of renewable energy.
In total, AES has more than 1,000 MW of energy storage projects in development, according to AES Energy Storage President John Zahurancik. Of that total, 260 MW is in construction or late stage development. For comparison, 1,000 MW is about the output of a typical U.S. nuclear reactor.
AES would not disclose which companies would supply the batteries for the projects.
The announcement is a sign that energy storage has moved beyond being just a handful of small demonstration projects.
Energy storage systems such as the lithium ion batteries AES has put up since 2009 can absorb excess power when there is more electricity than demand and can deploy it to the grid when demand increases rapidly, such as on a hot summer day. This is particularly important for solar and wind power, which fluctuate dramatically, depending on the amount of sun and wind.
"The pace of change is picking up," Zahurancik said in an interview. Projects are getting bigger, replacing traditional fossil fuel plants that are fired up to supplement when demand is high, he added.
AES has the biggest fleet of battery energy storage projects in the world, with 86 megawatts in operation in Chile and the United States. Though valued at just $200 million in 2012, the energy storage industry is expected to grow to $19 billion by 2017, according to research firm IHS CERA.
Government mandates for more renewable energy and a sharp drop in the price of lithium ion batteries are driving demand for more energy storage. With more wind and solar power on the grid, storage can help stabilize power flows that can shift dramatically depending on the weather.
Storage systems cost less than $1,000 a kilowatt and in some cases are substantially less, Zahurancik said, adding that prices would continue to fall in the coming years.
AES is currently building storage projects in Chile, Northern Ireland, the Netherlands, and the U.S. state of Maryland. Three more projects are in late stage development in Indiana, California and Northern Ireland.
The Alamitos Energy Center battery project in California is the largest new AES storage project at 100 MW. Most of the other projects are 10 or 20 MW in size. (Editing by Muralikumar Anantharaman)