Duke Energy Renewables, a business division of the largest
Duke Energy Corp.
), entered into an agreement with an Australian renewable energy
firm Infigen Energy under which it acquired two California solar
projects from the latter. The financial terms of the transaction
were not disclosed.
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Located near Bakersfield in Kern County, the two projects -
Pumpjack and Wildwood - are due to begin construction in 2014.
The solar energy generated from the two projects will be sold
through 20-year power purchase agreements to Southern California
The acquisition will more than double Duke Energy's solar power
capacity in California. Once online, the company's total solar
capacity in the U.S. will climb to 185 megawatt (MW) from 23
utility scale facilities.
The currently favorable renewable climate in the U.S.,
particularly on the back of favorable legislation, is prompting
diversified utilities like Duke Energy to expand their clean
energy asset basket. The company is strategically streamlining
its portfolio to strengthen its renewable capacity.
Last year, Duke Energy Renewables built the 21 MW Highlander
Solar Power Project in Twentynine Palms. It also took over the
4.5 MW Sunset Reservoir project in San Francisco. Again, in 2011,
INDU - a joint venture of Duke Energy Renewables and Integrys
Energy - built eight 1 MW rooftop solar projects in southern
We believe Duke Energy's green energy expansion efforts will
yield lucrative returns in the coming years given the aggressive
pro-environment stance in the U.S.
Recently, Duke Energy reported better-than-expected fourth
quarter 2013 earnings, which also improved from the year-ago
number by 42.9%. The strong performance mainly reflects lower
costs from synergies from the 2012 merger with Progress Energy,
along with recovered infrastructure modernization costs through
revised customer rates. The company also benefited from the
adoption of nuclear outage cost levelization in the Carolinas.
Duke Energy's acquisition of fellow North Carolina based utility,
Progress Energy Inc., spread the new entity's stable U.S.
electricity and gas operations to over 7.1 million electric
customers in Carolinas, Florida, Indiana, Kentucky and Ohio.
Recently, Duke Energy announced its plan to divest its stake in
13 power plants in the nation's Midwest after Ohio regulators
denied its request to raise rates. The plants together have a
capacity of 6,600 MW.
Duke Energy presently carries a Zacks Rank #3 (Hold).
Better-ranked utility counterparts are
Otter Tail Corporation
Public Service Enterprise Group Inc.
American Electric Power Co., Inc.
). While Otter Tail and Public Service Enterprise sport a Zacks
rank #1 (Strong Buy), American Electric Power carries a Zacks
Rank #2 (Buy).