U.S. Markets closed

NRG Inks Deal with FuelCell Energy

Zacks Equity Research

NRG Energy, Inc. (NRG) continues to strengthen the portfolio of its emission-free assets for power generation. The company has inked a deal with FuelCell Energy Inc. (FCEL) to market and sale the latter’s power plants.

Per the agreement, NRG Energy will market the power plants, manufactured by FuelCell Energy, to its customers and offer funding options and utilize power purchase agreement.

We note that NRG Energy funds the customers who intend to buy FuelCell Energy’s power plants. However, the customers who are reluctant to buy the power plants can utilize electricity generated from the plants. Further, the customers have the option to buy power from the power plants owned by NRG Energy through a long-term power purchase agreement. NRG Energy is also entitled to sell the power, generated from the power plants, to the electric grid.
Later, FuelCell Energy will install and control the power plants, owned or sold by NRG Energy.

Danbury, Conn.-based FuelCell Energy is an organization, engaged in design, manufacture, operation and service of clean and reliable fuel cell power plants. The company’s power plants have generated over 1.7 billion kilowatt hours of power through utilization of a range of fuels including clean natural gas, and renewable biogas from food processing and wastewater treatment.

It is evident from NRG Energy’s recent activities that it is now focusing more on the expansion of its emission-free asset-base through organic as well as inorganic path.

In the month of Jul 2013, NRG Energy has completed a few significant deals related to the expansion of its emission-free properties. On Jul 15, 2013, the company acquired a solar project, with a power generation capacity of 25.65 megawatt, from Quantum Utility Generation, LLC. In another transaction, NRG Energy announced its plan, on Jul 2, 2013, to set up rooftop solar photovoltaic arrays at MGM Resorts International’s (MGM) Mandalay Bay Resort Convention Center in Las Vegas.

As of Jun 30, 2013, NRG Energy had cash balance of $1.36 billion. A strong financial position enables the company to carry out numerous strategies to provide uninterrupted and reliable services to its customers. We believe that timely implementation of modern technologies will help the company to reduce its operating costs, which will improve the margins going forward.

In addition, strong focus on the customers’ interest is likely to attract new customers, which will subsequently improve NRG Energy’s future revenues.

NRG Energy currently has a Zacks Rank #3 (Hold). However, another stock in the industry that is worth considering is Huaneng Power International, Inc. (HNP) with a Zacks Rank #2 (Buy).

Read the Full Research Report on MGM

Read the Full Research Report on NRG

Read the Full Research Report on HNP

Read the Full Research Report on FCEL

Zacks Investment Research

More From Zacks.com