Entergy Corp. ETR revealed that its subsidiary in Louisiana submitted a request, seeking regulatory nod from the Louisiana Public Service Commission, for adding up to three gigawatts (GW) of solar energy to its renewable generation portfolio. Following this, 3,225 megawatts (MW) of solar power are currently in the approval queue for potential construction, development and placement on the grid through agreements with Entergy Louisiana.
The latest request is in sync with Entergy's plans for having as much as 15-17 GWs of renewable resources by the end of 2031, and achieving net-zero carbon emissions by 2050.
Louisiana’s Solar Prospects & Entergy
Louisiana has the second-highest per-capita residential sector electricity consumption in the nation, per the U.S. Energy Information Administration’s ("EIA") latest data. Its total energy consumption ranks fourth among the U.S. states, while its per capita energy consumption is second. This is largely because of its energy-intensive chemical, petroleum and natural gas industries.
Such high energy demand in Louisiana, along with the nation’s rapid shift toward sustainable clean energy adoption, broadens the scope of renewable energy expansion. If we focus on solar energy alone, the state offers solid growth prospects for its expansion as well.
Per the Solar Energy Industries Association, Louisiana’s solar market was worth $578 million as of December 2022, with $81 million being invested in 2022. At present, there are 67 solar companies in Louisiana and only 0.44% of the state’s electricity comes from solar. Utilities like Entergy, which are rapidly enhancing their renewable energy portfolio, thus have an enormous scope of expansion here.
Looking ahead, the state of Louisiana is expected to install 3,134 MWs of solar energy over the next five years. Amid this backdrop, it is imperative to mention that the latest request filed by Entergy Louisiana is the largest renewable expansion request made in this state’s history. Once approved, it will surely strengthen Entergy Louisiana’s position in the state, which currently boasts approximately 280 MWs of renewable resources in its portfolio.
Utilities across the United States are striving to strengthen their renewable portfolio energy generation mix for eco-friendly operations. Per the latest report from the EIA, there will be 54.5 GWs of new utility-scale electric-generating capacity to the U.S. power grid in 2023, of which 54% is likely to come from solar resources.
Such growth projections should bode well for Entergy, as well as other utilities, as mentioned below. These companies are rapidly adding solar energy in their renewable generation portfolio.
In March 2023, Duke Energy’s DUK arm, Duke Energy Florida, announced two new solar projects that would begin construction by the end of the same month in the Bay and Madison counties. The new projects are part of the company's community solar program, Clean Energy Connection.
Duke Energy has taken an initiative to expand the renewable asset base. It also aims to reach its target of net-zero carbon emissions from electric generation by 2050. The company already lowered its carbon emissions in 2021 by more than 44% since 2005, and is now expanding its 2050 net-zero goals to include Scope 2 and certain Scope 3 emissions.
In February 2023, Ameren’s AEE arm received the approval for the planned acquisition of the company's largest-ever solar facility — a 200 MW solar installation in central Missouri.
Ameren targets to expand its renewable portfolio by adding 2,800 MWs of renewable generation by the end of 2030, 4,700 MWs of renewable generation by 2040 and 800 MWs of battery storage by 2040. The company also expects to add 1,200 MWs of natural gas-fired combined cycle generation by 2031.
In December 2022, American Electric Power AEP proposed for off-take from new and existing solar and wind facilities located in the PJM service region, and new solar facilities in ERCOT. The idea was to support the company's growing retail and wholesale loads in Texas and Ohio, including the city of Columbus community choice aggregation program.
American Electric’s investment strategy includes incremental investments in renewable generation projects across the United States. The company’s 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.
In the past year, Entergy’s shares have lost 3.2% compared with the industry’s decline of 5.7%.
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Entergy 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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