Xcel Energy to Take Over Wind Project Construction in Colorado
Per a media release,Xcel Energy XEL forwarded a request to undertake the construction of Cheyenne Ridge Wind Project tothe Colorado Public Utilities Commission of Colorado. The project is valued $743 million and has a capacity of 500-megawatt (MW).
Initially, Tradewind Energy Inc. was in charge of constructing the wind project. Post its completion the project was planned to be sold to Xcel Energy. However, it kept delaying the project due to financial constraints. The delays might have hampered Xcel Energy’s ability to collect federal tax credits for owing the wind project. Hence, Xcel Energy decided to take over the project development.
Post approval, Xcel Energy will utilize its expertise on the development of the Cheyenne Ridge Wind Project. Incidentally, in 2018, the company completed a 600-MW Rush Creek wind farm project in Colorado, on time and under budget.
Shift to Wind Projects
Xcel Energy is focusing on the shift in its general portfolio with more priority provided to wind and solar projects by 2025. Moreover, it purchased Hale Wind Project in Texas from NextEra Energy Resources, a subsidiary of NextEra Energy NEE.The Hale Wind Project has a capacity of 478 MW. The shift towardwind energy will enable the company to benefit from The Production Tax Credit, a federal incentive to produce electricity from renewable sources.
High Adoption of Wind Energy
As the adoption of emission-less energy production has increased in the past few years, utility companies are shifting focus to alternative energy sources. This has reduced the usage of fossil fuels for electricity generation. Wind, biofuel, hydro, solar and geothermal sources are commonly used as alternative energy. However, per a recent forecast from the U.S. Energy Information Administration (EIA), in United States wind will surpass hydro as largest renewable electricity generation source in 2019.
We believe that the company will benefit from its wind projects in the forthcoming years.Utility players like WEC Energy Group, Inc. WEC and NiSource NI are also focusing on wind.
In January, 2019, WEC Energy acquired 80% ownership of the 97-MW Coyote Ridge Wind Farm at $145 million. The company will have all tax benefits from the acquisition.In February, NiSource sought approval from IURC for the development of three wind farms with a capacity of 800 MW in Indiana.
Price Movement
In the past 12 months, shares of Xcel Energy have gained 20.6% compared with the industry’s rise of 11.3%.
Zacks Rank
Xcel Energy has 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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