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Ameren's (AEE) Arm Gets Nod to Acquire Largest Solar Facility

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Ameren Corporation’s (AEE - Free Report) arm, Ameren Missouri, recently secured the key approval for its planned acquisition of the Huck Finn project, a 200-megawatt (MW) solar facility located in Central Missouri. This should significantly boost Ameren’s renewable energy portfolio. 

The project, with the capability to power nearly 40,000 homes for a year, is expected to reach commercial operation by the end of 2024.

Rationale Behind the Deal

Ameren aims to achieve the net-zero carbon emission goal by 2045 across all its operations in Missouri and Illinois. In addition, Ameren is making progress in its largest-ever expansion of clean wind and solar generation, which maintains reliability and affordability for customers.

The Huck Finn Solar project is Ameren Missouri’s ninth solar facility and the largest in the company’s history. While these nine facilities encompass more than 360 MW of clean energy generation capacity, the Huck Finn Solar Project boasts the capacity to generate 25 times more the amount of energy that Missouri's current largest solar facility generates.

Undoubtedly, such a large generation capacity signifies Ameren Missouri’s continuous efforts to build on its renewable energy portfolio to provide clean and reliable energy to its customers. This should strengthen AEE’s position in the renewable energy space and assist the company in duly achieving its zero-carbon-emission target.

Following Huck Finn’s acquisition, Ameren Missouri also progresses in its comprehensive plan to add 2,800 MW to new clean energy sources by 2030.

Growth Prospects

Energy generation from renewable sources is continuously gaining momentum in the United States to combat climate change. Moreover, with an increased focus on reducing the carbon footprint, energy generation from renewables may gain strength.

Per the latest report from the Energy Information Administration, developers plan to add 54.5 gigawatts (GW) of new utility-scale electric-generating capacity to the U.S. power grid in 2023. Solar is anticipated to constitute 54% of this expected capacity addition, highlighting the increasing dominance of energy in the country.

In such a scenario, AEE’s strategy to enhance its renewable energy portfolio should prove prudent. Other than AEE, utilities that are steadily transitioning toward renewable sources of energy for environment sustainability and investing in renewable energy projects are as follows:

Duke Energy (DUK - Free Report) has developed innovative Integrated Resource Plans and updated the enterprise capital plan through 2026 to increase planned investments to $65 billion, with more than 80% of these capital plan funding investments in the grid and clean energy transition.

Duke Energy has a long-term earnings growth rate of 5.5%. DUK shares have risen 2.5% in the past three months.

Dominion Energy (D - Free Report) plans to invest $37 billion during the 2022-2026 period to strengthen its existing infrastructure, out of which a major portion will be invested in zero-carbon generation and energy storage. Over the 2022-2035 period, the company aims to invest $73 billion to strengthen its infrastructure and add more clean power generation assets to its portfolio.

Dominion Energy’s long-term earnings growth rate is pegged at 5.8%. The Zacks Consensus Estimate for first-quarter 2023 earnings implies a growth rate of 6.5% from the prior-year reported figure.

CMS Energy (CMS - Free Report) aims at achieving net-zero methane emissions by 2030 and net-zero carbon emissions by 2040. It intends to spend $3.1 billion on renewables, which includes investments in wind, solar and hydroelectric generation resources in the 2023-2027 period.

CMS Energy has a long-term earnings growth rate of 7.9%. CMS shares have risen 3.6% in the past three months.

Price Movement

In the past six months, Ameren shares have increased 0.5% against the industry’s decline of 1.1%.

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Zacks Rank

Ameren currently carries 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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