) business unit, Constellation Energy Resources, LLC
("Constellation"), continues to expand its renewable portfolio.
The company announced that it is building a 976-kilowatt direct
current (DC) solar generation project in the city of Palmdale,
CA. The project is scheduled to be completed in 2014.
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The solar set-up is located on three sites - Civic Center,
DryTown Water Park and Marie Kerr Park at Palmdale. It has an
annual power generation capacity of 1,800 megawatt-hours. The
project will have around 3,200 photovoltaic panels and will be
able to get rid of carbon dioxide emission by 1.8 million pounds
Constellation is funding for the development activities in the
project. Huntington Beach, CA-based turnkey solar solutions
provider PsomasFMG and the city of Palmdale are jointly engaged
in the construction functions. Post completion, Constellation
will own and control the operations of the solar project.
The project will create a win-win situation for both
Constellation as well as the city of Palmdale.
Constellation will sell the output from the project to the city
of Palmdale at a fixed-rate, under a 20-year power purchase
agreement. In addition, increasing focus on renewable portfolio
will also enable Constellation to meet government's regulations
on power generation from the renewable sources and reduce
greenhouse gas emission.
On the other side, the contract is expected to enable the city of
Palmdale to save above $40,000 in electricity costs in the first
year of the system's operation, thereby reducing electricity
We note that utilization of renewable energy for electricity
generation is gradually rising primarily due to its clean nature
and a growing awareness among the masses about its benefits. This
has influenced the utility providers to shift their energy mix to
solar, water, and wind from traditional sources.
We note that Exelon generates around 55% of electricity from
nuclear powered units. Though the company maintains necessary
safety measures, nuclear power generation has been a debatable
issue since the nuclear disaster in Japan. To diversify its
generation portfolio and reduce risks associated with accidents
in nuclear facilities, Exelon is currently focusing more on
expansion of renewable energy-fuelled power generation assets.
Currently, roughly 10% of the company's total production comes
from renewable sources with the ratio rising gradually. In 2013,
Constellation added 38 megawatt of customer-sited solar
generation to its portfolio.
Apart from Exelon, its peers
Wisconsin Energy Corporation
) are investing substantially to construct and upgrade their
renewable utility infrastructure to comply with strict
We believe that addition of renewable assets along with inking
long-term power supply agreements will enable Exelon to secure a
stable revenue stream going forward. A steady cash inflow will
also support Exelon to invest more in new projects.
Chicago, Ill.-based Exelon currently has a Zacks Rank #2