Duke Energy (DUK) Announces Acquisition of Wildflower Solar – November 24, 2022

Duke Energy Corporation‘s (DUK Free Report), an unregulated trademark, Duke Energy Sustainable Solutions, recently marked its entry into the Mississippi solar market by acquiring a 100 megawatt (MW) Wildflower solar project from Clearway Energy Group.

With the acquisition, the company takes a step forward to strengthen its solar power portfolio to meet clean energy goals.

Details of the acquisition

Expected to be built in late 2022, the Wildflower Solar project has enough capacity to power nearly 21,000 homes. Duke Energy’s first solar power project in Mississippi is scheduled to be operational by the end of 2023.

At the start of its operation, the project will supply up to 80 MW of the generated solar energy to Toyota North America under a 15-year virtual power purchase agreement between the two companies. This will help the Toyota manufacturing facility reduce CO2 emissions from its operations.

In addition, the deal brings with it long-term stable prospects of generating income from the project.

growth prospects

Energy utilities in the United States are increasingly focused on reducing the carbon footprint of their operations to provide customers with clean and sustainable energy. In their quest to become greener, companies boast solid investment initiatives focused on renewable energy.

The latest report from the EIA suggests that 22% of US electricity generation will come from renewable sources in 2022 and 24% in 2023. This means a 20% increase in US electricity generation from renewable sources in 2020. The report anticipates that solar and wind sources will account for most of the increase in renewable capacity expansion two years from now.

Duke Energy has already reduced its 2021 carbon emissions by more than 44% since 2005. The company is now expanding its 2050 net-zero targets to include Scope 2 and certain Scope 3 emissions.

To achieve this goal, Duke Energy has invested heavily in renewable projects. DUK’s solar and wind power business has an investment of US$5 billion while the company owns and operates approximately 500MW of photovoltaic solar power projects in more than 50 solar farms across the country.

The company’s recent acquisition strengthens its renewable energy portfolio and reinforces its commitment to gracefully meet its 2050 target.

peer moves

Utilities that aim to steadily expand the field of renewable energy to achieve the goal of green energy in their operations are as follows:

American Electric Power Company‘s (AEP Free Report) plans to expand its renewable power generation portfolio to approximately 50% of total capacity by 2030.

American Electric’s long-term (three to five years) earnings growth rate is set at 6.2%. AEP shares are up 8.8% over the past month.

amers (AEE Free Report) aims to expand its renewable portfolio by adding 2,800 MW of renewable energy by the end of 2030 and a total of 4,700 MW of renewable energy by 2040 and 800 MW of battery storage by 2040.

Ameren has a long-term earnings growth rate of 7.2%. AEE shares have returned 10.8% over the past month.

CMS Energy (CMS Free Report) aims to spend US$2.8 billion on renewable energy over the period 2022-2026, which includes investments in wind, solar and hydroelectric generation resources. The company aims to achieve net-zero methane emissions by 2030 and net-zero carbon emissions by 2040.

CMS Energy has a long-term earnings growth rate of 8%. CMS shares have returned 9.1% to investors over the past month.

price movement

Over the past month, Duke Energy shares are up 9.2%, compared to industry growth of 6.1%.

Zacks Investment Research
Image source: Zacks Investment Research

Zacks rank

Duke Energy currently carries a Zacks rank #3 (hold). You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks can be found here.



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