Yahoo Finance AES Acquires US' Largest Permitted Solar-Plus-Storage Project
The AES Corporation AEShas recently acquired a 2 gigawatt (GW) solar-plus-storage project, named Bellefield, in California. Bellefield, which is in late-stage development currently, is the largest permitted solar-plus-storage projects in the United States.
Project Details
The project mainly comprises two phases with each phase boasting a generation capacity of 500 megawatt (MW) of solar and 500 MW of battery energy storage. For the phase 1 of the project, which is expected to reach commercial operation in 2025, AES clinched a 15-year long-term PPA agreement with a corporate customer. The company expects to ink more deals for upto 1 GW solar-plus-storage in phase two of the Bellefield project by the end of 2023.
This entails solid inflow of revenues from the project for AES for a long-term as soon as it reaches commercial operation. The acquisition strengthens AES’ position in renewable energy space and takes it a step forward in achieving its green-energy goals.
AES in Renewables
Since the green revolution begin, AES significantly boosted its renewable capacity. Over the last 10 years, AES’ project portfolio accumulated 15 GW of installed capacity and 12 GW of backlog projects with long-term contracts and a worldwide pipeline of 61 GW.
AES’ investment in renewables align with the global transition towards the clean energy. Through 2025, AES Corp. expects to invest a total of $4 billion in new renewables, generation, transmission, modernization and smart grid at its U.S. utilities. With such an aggressive investment strategy, the company expects to add 14-17 GW of capacity to its project portfolio through the 2023-2025 period. The latest project acquisition will aid in achieving this target.
The investments by AES Corp in the renewable space will not only assist the company in achieving its clean energy target and boost its renewable portfolio, but will also lead to the development and the expansion of renewable energy projects globally, thus contributing to a greater overall capacity for generating clean and sustainable energy.
Peer Moves
Solar deployments in the United States are expected to gain traction in the days ahead in small-scale projects and large-scale utility projects. The latest short-term energy outlook from the U.S. Energy Information Administration (EIA) shows that solar has been dominating the energy mix generation in the United States until now in the current year. The report further estimates a 24% higher solar generation this summer compared with 2022 levels and a drop in fossil fuel electricity generation.
Utilities other than AES, that are substantially investing in solar projects to achieve their zero-carbon goals in the United States are:
Duke EnergyDUK announced the completion of two solar projects in the Alachua and Suwannee counties in April 2023. The sites at peak production will deliver 150 MW of clean, renewable energy to the grid to benefit Florida customers.
Duke Energy has a long-term earnings growth rate of 6.2%. The Zacks Consensus Estimate for DUK’s 2023 earnings implies a growth rate of 6.6% from the prior-year reported figure.
Entergy Corporation’s ETR arm, Entergy Louisiana, filed a request in March 2023 with the Louisiana Public Service Commission seeking consent for the construction of two solar projects with a combined production capacity of 225 MW. The company aims to expand its renewable energy portfolio with these projects.
Entergy’s long-term earnings growth rate is 5.7%. The Zacks Consensus Estimate for ETR’s 2023 earnings suggests a growth rate of 3.9% from the prior-year reported figure.
CMS Energy’s CMS arm, Consumers Energy, announced the commencement of the operations of the Covert Generating Station in Southwest Michigan's Van Buren County in June 2023. This station is an important part of its industry-leading Clean Energy Plan to meet Michigan's energy needs this summer and for years to come.
CMS Energy has a long-term earnings growth rate of 7.5%. The Zacks Consensus Estimate for CMS’ 2023 sales suggests a growth rate of 2.6% from the prior-year reported figure.
Price Movement
In the past year, AES Corp. shares have dropped 4% compared with the industry’s decline of 13%.
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Zacks Rank
AES 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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