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Duke Energy's Arm to Build 22MW Battery Storage Projects

Zacks Equity Research

Duke Energy Corp.’s DUK subsidiary, Duke Energy Florida (DEF), recently announced its plan to construct three battery storage projects. These projects, with a total storage capacity of 22 megawatts, are expected to enhance grid operations, increase efficiencies and improve overall reliability of surrounding communities during power outages.

Notably, the company aims to complete the work by the end of 2020. On completion, the three will be considered the largest battery storage projects.

DEF’s Take on Renewables

Otherwise known as the Sunshine State, Florida’s physical and geographic condition is the third best in the United States, making it an ideal state for expansion of solar power. Thanks to recent developments, as of December 2018, the state ranks 2nd for projected capacity installed over the next five years, with nearly 5.5 GW expected to come online.

Naturally, utilities like Duke Energy are eager to invest aggressively in this expanding solar market of Florida. The company is set to spend an estimated $1 billion to construct or acquire a total of 700 MW of cost-effective solar power facilities and 50 MW of battery storage through 2022, in the state. Such investments will eventually boost Duke Energy’s growth in the solar market.

Battery Storage Prospects in Florida

As solar installations are rapidly expanding across the United States, the market for battery storage is now in vogue. It is imperative to mention in this context that energy storage technologies are crucial to a clean energy future, considering the number and intensity of storms that have recently impacted Florida.

Currently, Duke Energy is leading the industry deployment of battery technology in Florida. Last fall, the company and University of South Florida St. Petersburg introduced a Tesla battery storage system that is connected to a 100-kilowatt (kW) solar array — the first of its kind in Florida.

The latest announcement is a further testament of the company’s commitment to expand its footprint in Florida’s battery storage market.  

Other utilities are also following suit. Notably, in March 2019, NextEra Energy’s NEE Florida Power & Light subsidiary announced that it plans to build a 409-megawatt energy storage project in Florida, which will be powered by utility-scale solar.

Price Performance

In a year’s time, Duke Energy has gained 18.8% compared with the industry’s 16.7% gain.

 

Zacks Rank & Stocks to Consider

Duke Energy has a Zacks Rank #4 (Sell).

A few better-ranked stocks in the same space are Atlantic Power Corp. AT and Allete Inc. ALE. While Atlantic Power sports a Zacks Rank #1 (Strong Buy), Allete carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Atlantic Power delivered an average positive earnings surprise of 127.41% in the last four quarters. The Zacks Consensus Estimate for current-year earnings has been revised 118.1% upward to 24 cents per share over the past 60 days.

Allete has an expected long-term earnings growth rate of 7.2%. The Zacks Consensus Estimate for current-year earnings has been revised 2% upward to $3.63 per share over the past 60 days.

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Duke Energy Corporation (DUK) : Free Stock Analysis Report
 
Atlantic Power Corporation (AT) : Free Stock Analysis Report
 
NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
 
Allete, Inc. (ALE) : Free Stock Analysis Report
 
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