AES Energy Storage has finalized a $17.1m loan guarantee with the US Department of Energy for the construction of a 20MW energy storage system using advanced lithium-ion batteries at Westover in Johnson City, New York.

The AES project has been designed to use battery technology and new software instead of burning fossil fuels to provide grid frequency regulation, which is needed to balance power generation and consumption on the grid.

The project is expected to improve the efficiency of the energy grid for the state’s high-voltage transmission network, while helping reduce carbon emissions by 70% compared to frequency regulation provided by fossil energy suppliers.

The lithium-ion battery cells and related electrical systems to be used in the project will be supplied by A123 Systems, a supplier of lithium-ion batteries, and will be assembled, tested and validated in an A123 manufacturing facility in Hopkinton, Massachusetts.

US senator of New York Kirsten Gillibrand said that this project advances cutting-edge, battery technologies that will help reduce the nation’s dependence on fossil fuels, improves the efficiency of the energy grid, and spurs job growth in the clean energy economy.