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Vistra (VST) to Grow Storage Capacity at Moss Landing to 750MW

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Vistra (VST - Free Report) reached a 15-year agreement with Pacific Gas and Electric Company (PG&E) for a new 350-megawatt (MW)/1,400-megawatt-hour (MWh) battery system. This will further expand its Moss Landing Energy Storage Facility in California.

With this addition, the facility’s total energy storage capacity will be 750 MW/3,000 MWh. On Jan 21, 2022, PG&E had applied for the contract with the California Public Utilities Commission, decision of which is expected within 180 days. Upon approval, VST plans to begin construction in the third phase during May 2022 while commercialization of operations will kick start before June 2023.

Benefits of the Project

As California moves to clean energy, batteries will be a game changer. Vistra’s Moss Landing project has a battery system to serve as the model for utility-scale battery storage in the days to come. The project expands an existing power plant site, uses active transmission lines and enhances grid stability. This will not only benefit the local community but also provide affordable clean electricity to consumers.

Vistra’s Efforts to Shift to Clean Energy

Previously, in 2020, VST had announced a comprehensive plan to accelerate its transition to clean power-generation sources and initiatives to trim its carbon footprint. Vistra  had launched Vistra Zero, a portfolio of zero-carbon power-generation facilities. VST plans to reduce 60% of CO2 equivalent emissions, up from its previous 50% goal by 2030 from the 2010 levels. This, in turn, isexpected to achieve a long-term net-zero carbon emission objective within 2050, up from the past 80% reduction target.

Vistra plans to grow this portfolio to 7,300 MW by 2026 with 5,000 MW of renewable and energy storage capacity, and 2,300-MW emission-free nuclear facility, Comanche Peak. Along with its California projects, VST currently has six solar installations and 11 other storage and solar-plus-storage facilities, all in various stages of development and operations in Texas and Illinois. Ahead of this summer, VST will bring online its 50-MW Brightside Solar Facility, the 108-MW Emerald Grove Solar Facility and the 260-MW DeCordova Energy Storage Facility, all in the Texas ERCOT market.

Peer Moves

Other electric utilities also adopting measures to supply clean and reliable energy to their customers include Duke Energy (DUK - Free Report) , Xcel Energy (XEL - Free Report) and Alliant Energy (LNT - Free Report) . While XEL currently carries a Zacks Rank#2 (Buy), LNT and DUK havea Zacks Rankof 3 each at present. All three stocks are planning to provide absolute clean energy by 2050.

The long-term (three-five) earnings growth rate for DUK, XEL and LNT is pegged at 5.3%, 6.4% and 6.1% each. The dividend yield of Duke Energy, Xcel Energy and Alliant Energy is 3.8%, 2.7% and 2.7%, respectively.

Earnings surprise delivered by DUK, XEL and LNT in the last four quarters is 2.3%, 2.1% and 4.4% each, on average. The Zacks Consensus Estimate for 2022 earnings of Duke Energy and Alliant Energy has been stable in the past 60 days, while the same for Xcel Energy has moved 0.3% up.

Zacks Rank & Price Performance

Vistra currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past three months, shares of VST have gained 12.7%, outperforming the industry’s rise of 2.6%.


Zacks Investment ResearchImage Source: Zacks Investment Research