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Duke Energy (DUK) Teams Up With AWS for Software Solution

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Duke Energy Corporation (DUK - Free Report) recently signed a multi-year strategic agreement with Amazon Web Services (“AWS”) to accelerate the development of its industry-leading grid solutions, thereby promoting a clean energy transition.

AWS will be the primary cloud provider for the software development of Duke Energy while looking after the information technology and grid analytics workloads of Duke Energy.

The deal is part of DUK’s commitment to providing a green and clean energy future for its customers through capital investments of $145 billion, which the company intends to invest in the next 10 years. The deal takes Duke Energy a step forward in its goal to upgrade the grid for reliable and sustainable energy and encourages electric vehicle adoption.

Details of the Agreement

Per the agreement, Duke Energy is accountable for developing new smart grid software and services on AWS that will also enlarge its Intelligent Grid Services. Duke Energy’s Intelligent Grid Services mainly include a variety of applications that will assist the company in determining the upcoming energy demand and upgrading the grid per the requirement.

While DUK takes the charge of proper grid services, AWS will be responsible for developing cloud technologies that will mainly assist Duke Energy's grid-planning solutions. The agreement has been signed mainly to ensure that the best service is provided to DUK’s customers in the most cost-effective way and at a faster pace.

Duke Energy’s Clean Energy Goal

Duke Energy has taken an initiative to expand the renewable asset base and aims to reach its target of net-zero carbon emissions from electric generation by 2050. It already lowered its carbon emissions in 2021 by more than 44% since 2005. It is now expanding its 2050 net-zero goals to include Scope 2 and certain Scope 3 emissions.

To attain its goal, Duke Energy has been significantly investing in renewable projects. DUK’s solar and wind power businesses boast an investment of $5 billion, while it owns and operates approximately 500 MW of photovoltaic solar power projects at more than 50 solar plants across the country. The recent collaboration augments its pace to duly meet its target in 2050.

Moreover, the latest report from the Energy Information Administration suggests that 22% of the U.S. electricity generation in 2022 and 24% in 2023 will be renewable sources. This signifies an increase from 20% of the U.S. electricity generation in 2020 from renewable sources. The report entails solar and wind sources to contribute to most of the increase in renewable capacity addition in two years.

Such prospects indicate an advancing renewable energy future in the United States, which unlocks opportunities for utilities like Duke Energy. With the execution of strategic plans like the latest agreement, DUK is likely to establish a strong position in the energy of the future.

Peer Moves

Utilities that have targets set to provide reliable and affordable energy to customers for a sustainable energy future are as follows:

CMS Energy (CMS - Free Report) aims at spending $2.8 billion on renewables, which includes investments in wind, solar and hydroelectric generation resources in the 2022-2026 period. The company aims at achieving net-zero methane emissions by 2030 and net-zero carbon emissions by 2040.

CMS Energy boasts a long-term earnings growth rate of 8%. CMS shares have returned 3.7% to its investors in the past six months.

American Electric Power Company’s (AEP - Free Report) plans include growing its renewable generation portfolio to approximately 50% of the total capacity by 2030. Its 2023-2027 capital investment forecast includes $8.6 billion in the regulated renewable plan.

American Electric’s long-term (three to five years) earnings growth rate is 6.2%. AEP shares have increased 11.9% in the past month.

Ameren (AEE - Free Report) targets to expand its renewable portfolio by adding 2,800 MW of renewable generation by the end of 2030 and a total of 4,700 MW of renewable generation by 2040 and 800 MW of battery storage by 2040.

Ameren has a long-term earnings growth rate of 7.2%. AEE shares have returned 9.5% in the past six months.

Price Movement

In the past six months, shares of Duke Energy have increased 3.8% compared with the industry’s growth of 3.2%.

Zacks Investment Research
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Zacks Rank

Duke Energy currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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