Yahoo Finance Duke Energy's (DUK) Pisgah Ridge Solar Project Comes Online
Duke Energy Corp.’s DUK non-regulated commercial brand, Duke Energy Sustainable Solutions (DESS), recently announced that its 250 megawatts (MW) Pisgah Ridge Solar project in Texas reached commercial operation. This provided a boost to its Texas solar portfolio as it progresses toward the zero-carbon emission goal.
The latest report from Energy Information Administration (EIA) suggests that new solar scale capacity may increase manifold in 2023 (almost double from 13.4GW in 2021), with Texas likely to contribute the most with almost 7.7 gigawatts (GW) of new capacity additions. DESS, which already enjoys a strong footing in the region’s renewable energy space, may gain further from the expanding market size.
The company has already inked a 15-year virtual power purchase agreement (VPPA) with three companies in the Texas region, ensuring the inflow of revenues from the project in the long term. Per the agreement, DESS will supply 102MW of renewable energy to Charles River, 83MW of energy generated to Meijer and another company adding to the company’s revenues from the project.
The aforementioned deals are likely to consume 90% of the energy generated from the facility, suggesting that most of its production is committed to buyers, ensuring the inflow of cash from the facility’s operations.
Duke Energy’s Prospects in Clean Energy
Duke Energy has taken the initiative to expand its renewable asset base and aims to reach its target of net-zero carbon emissions from electric generation by 2050. The company has already lowered its carbon emissions from 139 million metric tons in 2005 to 77 million metric tons in 2022. By 2050, renewables are projected to be Duke Energy’s largest energy source, making up more than 40% of its generation capacity.
With such an ambitious target in the next-generation energy and continuous effort to diversify its energy mix, one may expect Duke Energy to expand its renewable energy portfolio significantly and capitalize on the growing demand.
Utilities Focus on Renewables
Utilities are steadily transiting toward utility-scale solar projects and other green energy generation mix. Utility-scale renewable projects tend to provide large-scale benefits which assist in lowering the cost of production and, consequently lower prices for consumers.
Apart from Duke Energy, other utilities that have recently proposed or acquired renewable projects in a bid to strengthen the renewable portfolio energy generation mix and provide economies of scale benefits to consumers are:
In February 2023,Entergy Corporation’s ETR arm, Entergy Louisiana, filed a request with the Louisiana Public Service Commission seeking consent to construct two solar projects with a combined production capacity of 225 MW to expand its renewable energy portfolio.
Entergy has a long-term (three-five years) earnings growth rate of 6%. The Zacks Consensus Estimate for ETR’s 2023 earnings suggests a growth rate of 4.1% from the prior-year estimated figure.
In January 2023, DTE Energy DTE announced that it is seeking renewable energy projects totaling up to 850 MW as part of continued demand for the company’s MIGreenPower program and DTE Electric’s Clean Vision Integrated Resource Plan. DTE issued a request for proposal for new wind and solar projects
DTE Energy has a long-term earnings growth rate of 6%. The Zacks Consensus Estimate for DTE’s 2023 earnings suggests a growth rate of 2.1% from the prior-year reported figure.
In February 2023, Ameren’s AEE arm received approval for the planned acquisition of the company's largest-ever solar facility, a 200 MW solar installation in central Missouri.
Ameren’s long-term earnings growth rate is pegged at 6.9%. The Zacks Consensus Estimate for AEE’s 2023 earnings suggests a growth rate of 5.1% from the prior-year reported figure.
Price Movement
In the past year, Duke Energy’s shares have declined 11.2% compared with the industry’s fall of 7.1%.
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Zacks Rank
Duke Energy currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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