National Grid (NGG) to Invest $4B in Delivery System Upgrade
National Grid Transco NGG is planning to invest more than $4 billion in a portfolio of transmission enhancement to modernize its energy delivery network across Upstate New York. Termed as Upstate Upgrade, this collection of transmission enhancements will provide a smarter, cleaner energy grid to support a more resilient energy network over the long run.
Details of the Program
NGG’s Upstate Upgrade program covers everything, from rebuilding up to 1,000 miles of transmission lines to more improved power stations and other facilities. This six-year portfolio of work will transform the grid, improve reliability and enable them to deliver renewable energy to homes, even during extreme weather conditions. This will result in fewer power outages, and when outages will occur, it will have the ability to restore power quickly.
Moreover, this Upstate Upgrade focuses on modernizing the transmission system to meet the expanded electricity needs of the growing economy and power more electrical devices than ever before, including electric vehicles and heat pumps.
This program will assist in achieving the state's climate goals.
Rise of the Renewable Energy Market
As industries across the board are putting in their efforts to fight climate change, the utility industry remains a forerunner in the energy transition process. As predicted by the International Energy Agency, the global renewable capacity is expected to increase to 2.5 times its current level by 2030. To reap the benefits of such growth prospects, utilities are increasingly investing in their renewable generation portfolio.
Keeping up with this trend, other utilities like CenterPoint Energy CNP, NextEra Energy Inc. NEE and Eversource Energy ES are also adopting measures to promote grid modernization and electric transmission.
CenterPoint Energy is currently focused on upgrading its grid infrastructure, thereby improving customer reliability. It has a goal to reach net-zero direct emissions for Scope 1 and Scope 2 emissions by 2035 and reduce Scope 3 emissions by 20% to 30%. The company plans to invest $44.5 billion in the 2021-2030 time frame, which includes more than $3 billion in investments in clean energy.
CNP’s long-term (three to five years) earnings growth rate is 7.51%. The Zacks Consensus Estimate for the company’s 2024 sales indicates an increase of 8.49% over the 2023 reported figure.
NextEra Energy’s Florida Power & Light Company, including Gulf Power, has plans to invest $43.8 billion in the 2024-2028 time period. Out of the total, FPL plans to invest nearly $18.7 billion in Transmission & Distribution projects to support customer growth and continue hardening the energy grid, which will allow the company to provide power to customers, even during storms. FPL focuses on clean, efficient, modernized generation and a stronger and smarter grid.
NEE’s long-term earnings growth rate is 8.18%. The Zacks Consensus Estimate for its 2024 sales indicates an increase of 1.21% over the 2023 reported figure.
Eversource Energy has long-term capital investment plans of $23.1 billion during 2024-2028 to expand its transmission and distribution infrastructure to provide reliable electricity and natural gas to its customers. It is currently focused on upgrading its electric distribution and transmission infrastructure. Grid modernization and advanced meter infrastructure will assist the company in serving customers more efficiently.
ES’ long-term earnings growth rate is 4.16%. The Zacks Consensus Estimate for its 2024 sales indicates an improvement of 8.05% over the 2023 reported figure.
Price Performance
In the past six months, shares of NGG have risen 8.2% compared to the industry’s average decrease of 2.9%.
Image Source: Zacks Investment Research
Zacks Rank
NGG 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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NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
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National Grid Transco, PLC (NGG) : Free Stock Analysis Report
Eversource Energy (ES) : Free Stock Analysis Report
