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ALLETE Minnesota Power to Retire Coal-Fired Boswell Units
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Minnesota Power, an affiliate of diversified energy company ALLETE, Inc. (ALE - Free Report) , declared its plan of retiring two small coal-fuelled generators by 2018 end as part of its Energy Forward plan to comply with state regulations.
Details of the Announcement
Minnesota Power intends to retire the Units 1 and 2 of the Boswell Energy Centre, the company’s largest thermal generating facility. They have a cumulative generating capacity of 130 megawatts (“MW”). The decision to retire the two units is based on Minnesota Power’s overall strategy of diversifying the energy portfolio, reducing the carbon footprint and winding down aged coal plants.
The remaining units of the facility, Units 3 and 4, have a cumulative generating capacity of 940 MW. The company has recently made heavy investment in emission control infrastructure and advanced turbine rotors at these two units, making them one of the cleanest and most efficient coal-fired generators in the country. As a result of these investments, mercury emissions have decreased a significant 90%, while sulfur dioxide and nitrogen oxide emissions have declined 80%.
Minnesota Power had initially filed the Integrated Resource Plan with the Minnesota Public Utilities Commission, proposing investments to improve efficiency of Units 1 and 2, and keeping them operational through 2024. However, thorough environmental and economic analyses of the two generation units showed the feasibility and rationality of entirely shutting them down in 2018.
Minnesota Power has been making consistent efforts to shed the smaller, ageing coal-fuelled plants from its portfolio by retiring, idling or converting them into cleaner sources like natural gas. These efforts have resulted in the displacement of 335 MW of coal-fired capacity from its generation system so far.
At the Taconite Harbor Energy Center, the company had previously retired a 75-MW coal-fired unit while the remaining two were idled this September. However, the company can still resume service of these two units for maintaining power grid reliability. Further, Minnesota Power has converted the Laskin Energy Center to natural gas in 2015.
In light of these initiatives, Minnesota Power has already achieved a 25% renewable energy portfolio, meeting the state mandate of a 25% renewable energy generation mix by 2025. It intends to reduce carbon emission by approximately 20% by 2020 and 30% by 2025, off a 2005 base.
Overview
The new Clean Power Plan, announced in Aug 2015 by the U.S. Environmental Protection Agency (EPA), calls for CO2 reduction of 28% by 2025 and 32% by 2030, from 2005 levels. This plan will certainly ensure the closure of more coal-based power units. They will be retired, idled or converted to natural gas.
As per an Energy Information Administration report, 94 coal-based power plants were shut down in 2015 with a cumulative generating capacity of 13,556 MW. This year, around 41 coal-powered plants are expected to be winded down.
Zacks Rank & Key Picks
ALLETE carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the same space include Pattern Energy Group Inc. , DTE Energy Company (DTE - Free Report) and Black Hills Corporation (BKH - Free Report) .
DTE Energy has witnessed four upward estimate revisions for the full year over the last 60 days. The company's earnings estimates have moved up from $5.06 to $5.21 per share during this period. The company has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Black Hills, with a Zacks Rank #2, has seen one upward estimate revision for 2016 over the last 60 days.
Pattern Energy Group has a Zacks Rank #2 and it has seen one upward estimate revision for 2016 over the last 60 days.
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ALLETE Minnesota Power to Retire Coal-Fired Boswell Units
Minnesota Power, an affiliate of diversified energy company ALLETE, Inc. (ALE - Free Report) , declared its plan of retiring two small coal-fuelled generators by 2018 end as part of its Energy Forward plan to comply with state regulations.
Details of the Announcement
Minnesota Power intends to retire the Units 1 and 2 of the Boswell Energy Centre, the company’s largest thermal generating facility. They have a cumulative generating capacity of 130 megawatts (“MW”). The decision to retire the two units is based on Minnesota Power’s overall strategy of diversifying the energy portfolio, reducing the carbon footprint and winding down aged coal plants.
The remaining units of the facility, Units 3 and 4, have a cumulative generating capacity of 940 MW. The company has recently made heavy investment in emission control infrastructure and advanced turbine rotors at these two units, making them one of the cleanest and most efficient coal-fired generators in the country. As a result of these investments, mercury emissions have decreased a significant 90%, while sulfur dioxide and nitrogen oxide emissions have declined 80%.
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Background
Minnesota Power had initially filed the Integrated Resource Plan with the Minnesota Public Utilities Commission, proposing investments to improve efficiency of Units 1 and 2, and keeping them operational through 2024. However, thorough environmental and economic analyses of the two generation units showed the feasibility and rationality of entirely shutting them down in 2018.
Minnesota Power has been making consistent efforts to shed the smaller, ageing coal-fuelled plants from its portfolio by retiring, idling or converting them into cleaner sources like natural gas. These efforts have resulted in the displacement of 335 MW of coal-fired capacity from its generation system so far.
At the Taconite Harbor Energy Center, the company had previously retired a 75-MW coal-fired unit while the remaining two were idled this September. However, the company can still resume service of these two units for maintaining power grid reliability. Further, Minnesota Power has converted the Laskin Energy Center to natural gas in 2015.
In light of these initiatives, Minnesota Power has already achieved a 25% renewable energy portfolio, meeting the state mandate of a 25% renewable energy generation mix by 2025. It intends to reduce carbon emission by approximately 20% by 2020 and 30% by 2025, off a 2005 base.
Overview
The new Clean Power Plan, announced in Aug 2015 by the U.S. Environmental Protection Agency (EPA), calls for CO2 reduction of 28% by 2025 and 32% by 2030, from 2005 levels. This plan will certainly ensure the closure of more coal-based power units. They will be retired, idled or converted to natural gas.
As per an Energy Information Administration report, 94 coal-based power plants were shut down in 2015 with a cumulative generating capacity of 13,556 MW. This year, around 41 coal-powered plants are expected to be winded down.
Zacks Rank & Key Picks
ALLETE carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the same space include Pattern Energy Group Inc. , DTE Energy Company (DTE - Free Report) and Black Hills Corporation (BKH - Free Report) .
DTE Energy has witnessed four upward estimate revisions for the full year over the last 60 days. The company's earnings estimates have moved up from $5.06 to $5.21 per share during this period. The company has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Black Hills, with a Zacks Rank #2, has seen one upward estimate revision for 2016 over the last 60 days.
Pattern Energy Group has a Zacks Rank #2 and it has seen one upward estimate revision for 2016 over the last 60 days.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>