The U.S. Department of Energy (DOE) offered AES Energy Storage LLC a conditional commitment for a loan guarantee for $17.1 million to support the construction of a 20-megawatt (MW) energy-storage system using advanced lithium-ion batteries. The AES project, located in Johnson City, N.Y., will help provide a more stable and efficient electrical grid for the state’s high-voltage transmission network.

“Effective energy-storage systems are crucial to harnessing the power of renewable energy and getting it onto the grid,” said Steven Chu, energy secretary. “Projects like these are helping us to meet the president’s goal of doubling our renewable-energy generating capacity by 2012.”

“This loan guarantee will allow for renewable-energy sources, like solar and wind, to play a greater role in the Southern Tier,” said Rep. Maurice Hinchey (D-N.Y.). “It will also make the area’s electrical grid more efficient and reliable, helping to cut energy costs over the long run. It represents another step forward in our efforts to take control of our energy future.”

Traditionally, grid frequency regulation, which is needed to balance power generation and consumption on the grid, is maintained by burning additional fossil fuels at power plants. The AES project eliminates the need to burn fossil fuels and instead uses battery technology and new software that will provide the same regulation at a lower price. This advanced frequency regulation capability will allow renewable electricity generation to play a larger role in New York’s transmission network. The AES technology can help reduce carbon emissions by 70 percent compared to frequency regulation provided by fossil energy suppliers.

The AES project will include advanced lithium-ion battery cells from A123System Inc., a leading supplier of lithium-ion batteries, which provide grid stabilization more efficiently and with less environmental impact than existing resources. The contained battery and related electrical systems will be assembled, tested and validated in an A123 manufacturing facility in Hopkinton, Mass.

Including this announcement, the DOE has offered conditional commitments for loan guarantees to support 14 clean-energy projects.