Duke Energy Expands Renewable Portfolio in North Carolina - Analyst Blog

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Diversified energy company Duke Energy Corporation ( DUK ) plans to boost its renewable power generation capacity by adding 52 megawatt (MW) of solar energy in 2014-2015 in North Carolina. Though this looks negligible when compared to its total regulated generation capacity in excess of 52,000 MW, Duke Energy has long-term plans to expand its renewable energy portfolio.

Long-Term Power Purchase Agreement

Duke Energy Renewables, a unit of Duke Energy, will set up three solar plants in North Carolina. The electricity produced from these units will be sold to George Washington University, American University and George Washington University Hospital under a 20-year purchase agreement. These agreements guarantee an assured return on solar investments.


The first of the three solar plants will be built in Pasquotank County this year with a generation capacity of 20 MW. The other two solar plants are scheduled for 2015.

Duke's North Carolina Solar Projects

Duke Energy launched its solar energy initiative in North Carolina in 2009. Currently, its solar program in the state encompasses 25 sites. While selecting the sites for solar generation emphasis was given on the site's proximity to the electrical grid and its solar potential.

These investments were made with an objective to meet the renewable energy standard of the state. The company is on course to meet North Carolina's mandate of achieving 12.5% of generation from renewable sources by 2021.

Renewable Generation: Actuals and Estimates

In 2013, Duke Energy generated 1,300 MW of electricity from renewable sources in its states of operation, with the majority of power coming from wind turbines.

Duke Energy plans to add 200 MW of wind assets in 2014 and make further solar investments.

Environmental Issues

Increasing pollution from power generating plants has sparked off new environmental regulations. We believe the latest proposal from the Environmental Protection Agency to lower carbon dioxide emissions from power plants by 30% by 2030 from 2005 levels will see more investment in renewable energy.

Recently, another large utility Dominion Resources Inc. ( D ) enhanced its solar power portfolio by acquiring a 20 MW solar plant in California.

In Feb, 2014, 392 MW Ivanpah Solar Electric Generating System started commercial operation  in Nevada. This is joint venture between NRG Energy Inc. ( NRG ), Google Inc. ( GOOGL ) and BrightSource Energy can power 140,000 homes.

Zacks Rank

Duke Energy Corporation carries a Zacks Rank #3 (Hold).


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Investing , Business , Stocks

Referenced Stocks: DUK , D , NRG , GOOGL

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