Duke Energy Corporation DUK recently announced proposals to build two massive solar projects in North Carolina with a combined generating capacity of more than 75 megawatts (“MW”).
The projects, owned and operated by Duke Energy Carolinas, include a 60-MW farm covering an area of 400 acres off Rocky River Road near Monroe and a 15.4-MW farm on 110 acres off Crawford Road near Mocksville.
Charlotte-based Birdseye Renewable Energy, the original developer of this project, sold the development rights to Duke Energy and asked the North Carolina Utilities Commission to transfer ownership of the Mocksville facility. It will make a similar filing for the Monroe unit soon. Pending approval, the projects will commence construction in March and complete by the end of 2016.
North Carolina’s Renewable Energy Portfolio Standards mandate electric utilities to derive 12.5% of the electricity from renewable energy and energy-efficient resources by 2021. Thus, Duke Energy has been steadily investing in the development of solar power in the state. Four major solar projects, with a combined capacity of 140 MW, are nearly complete which the company will own and operate in Bladen, Duplin, Onslow and Wilson counties. Recently, Duke Energy announced plans to build a 61 MW solar plant in Rutherford County in North Carolina under a 25-year power purchase agreement with Google.
Solar energy is gradually transforming the way energy is produced and consumed, driving the ongoing global energy transition. With regulatory authorities encouraging renewable energy generation, the dependence on fossil fuels is gradually declining. As per the U.S. Energy Information Administration (EIA), electricity generated from renewable sources is projected to increase to 18% by 2040 in the U.S. Per the EIA’s latest reports, solar power plants generating nearly 9 gigawatts of clean energy will come online in the U.S. in the 2014–2016 timeframe.
The recent Paris Climate Pact requires every nation to curb rising carbon levels and seeks to eliminate net green house gas emission due to human activity in this century. This is expected to boost the long-term fundamentals of renewable energy companies, especially those engaged in solar power development.
In view of the rising awareness, regulatory compulsion and the timing of solar investment credits that have triggered the solar boom in the electric utility space in the U.S., Duke Energy plans to invest about $3 billion in renewable energy over the next five years. The company has already invested more than $4 billion in wind and solar facilities in 12 states over the past eight years.
Apart from Duke Energy, FirstEnergy Corp. FE and Exelon Corporation EXC are consistently increasing their focus on the development of alternative energy.
Zacks Rank
Duke Energy currently has a Zacks Rank #3 (Hold). A better-ranked company in the utility sector is Korea Electric Power Corp. KEP sporting a Zacks Rank #1 (Strong Buy).
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