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Duke Energy's (DUK) DESS Acquires Pike Solar Plant in Colorado

Duke Energy Corporation’s DUK non-regulated commercial brand, Duke Energy Sustainable Solutions (“DESS”), recently acquired Pike Solar from JUWI Inc. Pike Solar is being developed to meet the solar power needs of the customers of Colorado Springs Utilities.

Through the acquisition, the company takes a step forward in boosting its solar energy portfolio to achieve clean energy goals.

Details of the Solar Plant

The Pike Solar project boasts enough capacity to power almost 46,300 homes. The project has 414,000 solar panels on about 1,310 acres and will provide 175 megawatts (MW) of electricity to Colorado Springs Utilities customers.

JUWI and DESS will be accountable for the operation and maintenance of the solar project. Pike Solar is expected to be commissioned by the end of 2030.

Pike Solar represents DESS’ largest solar facility and allows the company to take a step ahead toward achieving 80% carbon reduction by 2030. Moreover, with the recent addition, DESS now has three solar projects in Colorado, boasting a capacity of 248 MW.

The project, on completion, will assist in reducing the energy cost for Colorado Springs Utilities customers. In this context, it is imperative to mention that DESS has inked a 17-year agreement with Colorado Springs Utilities to supply electricity from Pike Solar. This highlights consistency in revenue generation from this project by Duke Energy over the long term.

Growth Prospects

Utilities in the United States are steadily moving toward achieving the renewable energy goal to provide more sustainable and reliable energy to their customers. That being said, Duke Energy already lowered its carbon emissions in 2021 by more than 44% since 2005. It is now expanding its 2050 net-zero goals to include Scope 2 and certain Scope 3 emissions.

To attain its goal, Duke Energy has been significantly investing in renewable projects. DUK’s solar and wind power businesses boast an investment of $5 billion, while it owns and operates approximately 500 MW of photovoltaic solar power projects at more than 50 solar plants across the country. Additionally, Duke Energy has more than 10,500 MW of solar and wind energy combinedly.

Per the short-term energy outlook by the Energy Information Administration, the generation of electricity from utility-scale solar and wind will increase from 16% in 2023 to 18% in 2024. The aforementioned investment steps and goals, including the latest acquisition, taken by Duke Energy will enable the company to contribute to the nation’s renewable electricity generation and achieve the abovementioned target.

Peer Moves

Utilities that have been steadily expanding in renewables to mitigate the effects of climate change are as follows:

American Electric Power Company’s AEP plans include growing its renewable generation portfolio to approximately 50% of the total capacity by 2030. Its 2023-2027 capital investment forecast includes $8.6 billion in the regulated renewable plan.

American Electric’s long-term (three to five years) earnings growth rate is pegged at 6.2%. AEP shares have increased 1.9% in the past year.

Ameren AEE targets to expand its renewable portfolio by adding 2,800 MW of renewable generation by the end of 2030 and a total of 4,700 MW of renewable generation 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 10.9% in the past three months.

CMS Energy CMS aims at spending $2.8 billion on renewables, which includes investments in wind, solar and hydroelectric generation resources in the 2022-2026 period. The company aims at achieving net-zero methane emissions by 2030 and net-zero carbon emissions by 2040.

CMS Energy boasts a long-term earnings growth rate of 8%. CMS shares have returned 12.3% to its investors in the past three months.

Price Movement

In the past three months, shares of Duke Energy have rallied 15.3% compared with the industry’s growth of 10%.

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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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