DTE Energy (DTE) will build a 220 MW energy storage facility in Michigan

DTE Energy Company DTE has revealed that it intends to build a 220-megawatt (MW) battery energy storage complex on the site of its former coal-fired power plant in Trenton Channel, Michigan. This should increase DTE’s presence in the rapidly growing energy storage market.

Once completed in 2026, the energy storage center is expected to be the largest stand-alone battery energy storage project in Michigan’s Great Lakes region.

Benefits of the project

The new storage facility will store excess electricity produced and deliver it to DTE Energy customers during periods of increased electricity demand. This will reduce load on the grid, eliminate the need to start and stop generation in response to demand fluctuations, and expand DTE’s renewable energy fleet. This acceleration in clean energy supply could attract more consumers to choose DTE Energy as their preferred utility provider, thereby improving its financial performance.

Nearly 40,000 homes will be powered by 880 megawatt-hours of electricity, to be stored at the new Trenton Channel Energy Center. This, in turn, will put DTE one step closer to achieving its goal of more than doubling its total energy storage capacity by 2042.

Once completed, the energy storage center will also play a key role in helping DTE Energy achieve its net zero carbon emissions goal by 2050.

Growing prospects for DTE

As the world moves towards a greener future, there is a noticeable shift in the utilities sector as corporations add more and more renewable energy sources to their generation portfolio. This, in turn, increases the demand for battery storage solutions that enable efficient energy management, grid stability and reliability, thus ensuring constant power supply.

To this end, Mordor Intelligence expects the global battery energy storage market to register a CAGR of 8.7% from 2024 to 2029. Therefore, to capitalize on this growing market, DTE Energy is constantly increasing its presence in this space. The latest project in the Great Lakes region is an example of DTE’s efforts to gain traction in the battery energy storage market.

To this end, it is essential to mention that DTE Energy intends to invest $7 billion in cleaner generation, including renewable energy sources, between 2024 and 2028. DTE plans to retire its remaining six coal-fired generating units and convert them to a combination of renewables, energy loss reduction, demand response, battery storage and natural gas power generation. Therefore, it can be expected that the company will implement further energy storage projects in the near future.

Peers to benefit

In addition to DTE, top utility players like CMS Energy company CMS, Alliant Energy Corp. LNT i NextEra Energy, Inc. NEE is expanding its reach to capitalize on the growing battery storage market.

CMS Energy plans to deploy battery storage starting in 2024, with 75 MW of energy storage by 2027 and an additional 475 MW by 2040. The company intends to add 800 MW of battery storage by 2030.

CMS’s long-term earnings growth rate is 7.6%. The Zacks Consensus Estimate for 2024 sales is projecting growth of 9.4% from the reported 2023 figure.

Alliant Energy is working to integrate new technologies and optimize energy resources such as wind and solar power, as well as battery storage. In August 2023, the company received approval from the Wisconsin Public Utilities Commission to build utility-scale battery storage facilities located at two of its solar plants. Two battery projects, the 100 MW Grant County Solar battery project and the 75 MW Wood County Solar battery project, are expected to be completed by fall 2025.

Alliant Energy’s long-term earnings growth rate is 6.1%. The Zacks Consensus Estimate for LNT’s 2024 sales is projected to improve 11% from the prior year.

NextEra Energy subsidiary NextEra Energy Resources added approximately 1,025 MW to its storage backlog in the first quarter of 2024. In June 2024, NextEra Energy Resources and Entergy announced a joint development agreement that will accelerate the development of up to 4 .5 gigawatts. energy generation and storage projects.

NEE’s long-term earnings growth rate is 8%. The Zacks Consensus Estimate for the company’s 2024 sales is projecting a 3.3% improvement from the prior year.

Price movement

Over the past six months, DTE Energy shares are up 0.4% compared with the industry’s decline of 4.3%.

Image Source: Zacks Investment Research

Zacks Rank

DTE Energy is currently sporting a Zacks Rank #3 (Hold). You can see see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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