Yahoo Finance AVANGRID (AGR) and NTUA Tie-Up for Green Energy Projects
AVANGRID, Inc. AGR announced that it has signed a Memorandum of Understanding (MOU) with Navajo Tribal Utility Authority (NTUA). The agreement aims at exploring opportunities to develop up to 1 Gigawatt (GW) of green energy projects within the Navajo Nation in the states of New Mexico and Arizona.
The two parties will join forces to determine the feasibility of wind and solar projects, as well as battery storage options. Navajo Nation’s businesses and residents will also benefit from dependable, affordable and sustainable energy.
Renewable Energy
Per a U.S. Energy Information Administration (EIA) report, coal usage for electricity generation is expected to decline going forward. It also projects an increase in renewable energy sources from 22% in 2022 to 26% in 2024.
EIA expects the utility operators to add nearly 54.5 gigawatts (GW) of new utility-scale electric-generating capacity to the United States in 2023. It also projects that approximately 29.1 GW out of the total energy capacity will be based on solar power, and 9.4 GW will be battery storage. Developers plan to add 6.0 GW of utility-scale wind capacity in 2023. These factors clearly indicate the rising usage of solar energy for clean electricity generation in the United States.
The Inflation Reduction Act (IRA) will support and accelerate the Utilities’ transition toward clean-energy sources. The Act has removed uncertainties related to federal incentives for the usage of renewable sources. It also entails an opportunity for a wide range of low-cost clean energy solutions in a predictable way and is expected to create earnings visibility.
The partnership between AVANGRID and NTUA is in sync with IRA’s objectives. As part of the collaboration, both parties will study IRA — the largest climate investment in American and world history — to see how the projects under consideration may benefit from it.
Utilities Focus on Clean Energy
Along with AVANGRID, some other electric power industry companies like Dominion Energy, Inc. D, Ameren Corporation AEE and NextEra Energy, Inc. NEE are adopting measures to meet clean-energy targets.
Dominion Energy has recently received approval to generate 800 MW of clean energy. This project is expected to save more than $250 million in fuel costs for consumers. Also, organic projects and acquired assets will further expand D’s clean energy portfolio. The company plans to invest $42 billion in offshore wind and solar projects during 2022-2035 to further expand its renewable operations.
Dominion Energy’s long-term (three- to five-year) earnings growth is pegged at 14.89%. It delivered an average earnings surprise of 1.21% in the last four quarters.
Ameren plans to supply electricity produced from cleaner and more diverse sources of energy generation, including solar, wind, natural gas, hydro and nuclear power. AEE aims to expand its portfolio by 2,800 MW of renewable generation by the end of 2030, and a total of 4,700 MW of renewable generation and 800 MW of battery storage by 2040.
Ameren’s long-term earnings growth is pegged at 6.97%. The Zacks Consensus Estimate for 2023 earnings per share (EPS) is $4.35, implying a year-over-year increase of 5.1%.
NextEra Energy aims to reduce total carbon emissions by 67% within 2025 from 2005 base line. It continues to work on its strategy of long-term investment in clean-energy assets. NEE expects to add 33-42 gigawatts of new renewables to its generation portfolio during 2023-2026 via clean-energy investments.
The company’s long-term earnings growth rate is pegged at 9.04%. The Zacks Consensus Estimate for 2023 EPS is pegged at $3.12, implying a year-over-year increase of 7.6%.
Price Performance
In the past month, shares of AVANGRID have gained 1.6% compared with the industry’s 3.6% growth.
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Zacks Rank
AVANGRID 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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