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DTE Energy's (DTE) Largest Wind Park Commences Operation

Zacks Equity Research

DTE Energy’s DTE Pine River wind park, the largest in Michigan, recently commenced operations, thereby providing enough clean energy to
substantially power more than 54,000 homes. The wind park, located in Gratiot and Isabella counties, is the company’s most cost-effective and cost-efficient wind project that currently operates 65 turbines.

How Will the New Project Benefit Michigan?

DTE Energy's newest wind park plans to annually offset nearly 300,000 metric tons of Carbon dioxide, while aiming to provide a significant impetus
to the company's carbon emission reduction goal by more than 80% by 2050 and achieving 50% clean energy through renewables and energy efficiency by 2030.

Through this new wind park, the company will not only continue the fundamental transformation of power generation in Michigan into cleaner energy, but also contribute to the state’s economic growth. To this end, it is imperative to mention that DTE Energy’s wind projects provide a stable source of income for landowners who have turbines on their property, jobs that help young people stay in the community, and tax revenues that can be used to improve roads, schools, emergency services and other vital community needs.

Our View

With the growing dominance of renewable energy worldwide, DTE Energy is investing steadily to enhance its renewable generation assets. In particular, the company plans to more than double its capacity in wind power. To this end, DTE Energy plans to build two additional wind parks by 2022, which is currently estimated to produce around 375 MW of electricity. This includes a wind project with a capacity to generate 300 MW of electricity for large commercial customers.

Per IRENA (International Renewable Energy Agency), the U.S. wind industry installed 5,944 MW of new wind power capacity in the fourth quarter of 2018, the third-strongest quarter for installations on record. Further, wind power is also expected to surpass hydropower by a factor of three, to become the largest renewable power source in the United States by 2030. Considering this uptrend in the wind industry, steady investments made by DTE Energy to increase wind generation capacity will significantly add to its overall growth.

Price Performance

DTE Energy’s shares have inched up 22% in the past 12 months compared with the industry’s rise of 14%.

Zacks Rank & Key Picks

DTE Energy currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks from the same space are IDACORP, Inc. IDA, Algonquin Power & Utilities Corp AQN and FirstEnergy Corp. FE, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

IDACORP delivered average positive earnings surprise of 9.60% in the past four quarters. The company’s long-term growth rate currently stands at 2.60%.

Algonquin Power & Utilities delivered average positive earnings surprise of 27.41% in the past four quarters. The Zacks Consensus Estimate for 2019
earnings has moved up 10% to 66 cents in the past 90 days.

FirstEnergy delivered average positive earnings surprise of 4.10% in the past four quarters. The Zacks Consensus Estimate for 2019 earnings has moved up 0.8% to $2.56 in the past 90 days.

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