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Alliant Energy (LNT) Rides on Investments, Renewable Expansion
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Alliant Energy Corporation’s (LNT - Free Report) strategic investments in natural gas projects and stable returns from regulated assets will further drive its bottom line. The company’s focus on electricity generated from clean assets will help serve its expanding customer base.
However, Alliant Energy’s dependence on third-party assets for transmission acts as a headwind.
Tailwinds
LNT plans to invest substantially over the next four years to strengthen the electric and gas distribution network as well as add natural gas and renewable assets to its generation portfolio. It expects investments of $9.1 billion during 2024-2027. Its strong and flexible investment plans will support an 8% base CAGR during the same period.
The company’s earnings prospects look attractive due to the ongoing additions to electric and natural gas customer volumes. Its geographic location and favorable regulatory developments bode well for the advancement of wind projects and LNT’s long-term earnings growth. The ongoing economic growth in its service territories and increasing customer base are also boosting its performance and creating fresh demand for utility services.
Alliant Energy is successfully completing major construction projects on time and at or below budget. A constructive regulatory environment will enable it to recover capital expenditures. The company continues to be the largest owner-operator of solar energy in Wisconsin. It has all solar sites and panels in control for its planned 1.1 gigawatts (GW) of utility-scale solar projects within the state by mid-2024. LNT placed 250 megawatts (MW) of solar capacity into service and expects to add an additional 840 MW by mid-2024.
Headwinds
The company’s utility operations — IPL and WPL — use the interstate electric transmission system that they do not own or control. Rates charged to these subsidiaries are regulated by FERC. In case transmission costs go up and LNT is unable to recover those costs from its customers, operational expenses are bound to rise. A fall in the performance of the third-party electric transmission system will limit Alliant Energy’s ability to transmit electricity within its service territories and adversely impact its operations.
Transition in Energy Space
The U.S. electric power sector is gradually moving toward cleaner sources of energy to produce electricity. Most of the companies target replacing fossil fuels with renewables and believe in the development of new technologies. They have pledged to deliver 100% clean energy and achieve the zero-emission target in the coming years.
To reap the benefits of the expanding renewable energy market, certain companies from the industry, such as Xcel Energy Inc. (XEL - Free Report) , PPL Corp. (PPL - Free Report) and Dominion Energy (D - Free Report) are also transitioning faster toward clean energy.
Xcel Energy aims to spend $34 billion during the 2024-2028 period, indicating an increase of $4.5 billion from its previous capital expenditure plan. These investments are aimed at strengthening and expanding XEL’s transmission, distribution, electric generation and renewable projects.
It is reducing coal usage and targets to lower emissions by at least 80% by 2030 and achieve carbon neutrality by 2050. After completing six wind projects with a combined capacity of 1,500 MW in 2020, the company completed four wind farms, adding another 800 MW of clean energy generation capacity to its portfolio.
PPL’s strategic investments will expand its renewable-generation capacity. PPL expects a regulated capital investment plan of $12 billion through 2026.
PPL plans to achieve its carbon emission target of 70% and 80% by 2035 and 2040, respectively, from its 2010 level. It will do so through the introduction of new carbon capture technology and addition of more renewable sources to the generation portfolio. It also aims to become carbon neutral by 2050.
Dominion Energy has a well-chalked-out long-term capital expenditure plan to strengthen and expand its infrastructure. It expects to make a capital investment of $9 billion annually through 2025.
Dominion Energy’s long-term objective is to add 24 GW of battery storage, solar, hydro and wind (offshore as well as onshore) projects by 2036 and increase the renewable energy capacity by more than 15% per year, on average, over the next 15 years. It plans to invest $42 billion in offshore wind and solar projects during 2022-2035 to further expand its renewable operations.
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Alliant Energy (LNT) Rides on Investments, Renewable Expansion
Alliant Energy Corporation’s (LNT - Free Report) strategic investments in natural gas projects and stable returns from regulated assets will further drive its bottom line. The company’s focus on electricity generated from clean assets will help serve its expanding customer base.
However, Alliant Energy’s dependence on third-party assets for transmission acts as a headwind.
Tailwinds
LNT plans to invest substantially over the next four years to strengthen the electric and gas distribution network as well as add natural gas and renewable assets to its generation portfolio. It expects investments of $9.1 billion during 2024-2027. Its strong and flexible investment plans will support an 8% base CAGR during the same period.
The company’s earnings prospects look attractive due to the ongoing additions to electric and natural gas customer volumes. Its geographic location and favorable regulatory developments bode well for the advancement of wind projects and LNT’s long-term earnings growth. The ongoing economic growth in its service territories and increasing customer base are also boosting its performance and creating fresh demand for utility services.
Alliant Energy is successfully completing major construction projects on time and at or below budget. A constructive regulatory environment will enable it to recover capital expenditures. The company continues to be the largest owner-operator of solar energy in Wisconsin. It has all solar sites and panels in control for its planned 1.1 gigawatts (GW) of utility-scale solar projects within the state by mid-2024. LNT placed 250 megawatts (MW) of solar capacity into service and expects to add an additional 840 MW by mid-2024.
Headwinds
The company’s utility operations — IPL and WPL — use the interstate electric transmission system that they do not own or control. Rates charged to these subsidiaries are regulated by FERC. In case transmission costs go up and LNT is unable to recover those costs from its customers, operational expenses are bound to rise. A fall in the performance of the third-party electric transmission system will limit Alliant Energy’s ability to transmit electricity within its service territories and adversely impact its operations.
Transition in Energy Space
The U.S. electric power sector is gradually moving toward cleaner sources of energy to produce electricity. Most of the companies target replacing fossil fuels with renewables and believe in the development of new technologies. They have pledged to deliver 100% clean energy and achieve the zero-emission target in the coming years.
To reap the benefits of the expanding renewable energy market, certain companies from the industry, such as Xcel Energy Inc. (XEL - Free Report) , PPL Corp. (PPL - Free Report) and Dominion Energy (D - Free Report) are also transitioning faster toward clean energy.
Xcel Energy aims to spend $34 billion during the 2024-2028 period, indicating an increase of $4.5 billion from its previous capital expenditure plan. These investments are aimed at strengthening and expanding XEL’s transmission, distribution, electric generation and renewable projects.
It is reducing coal usage and targets to lower emissions by at least 80% by 2030 and achieve carbon neutrality by 2050. After completing six wind projects with a combined capacity of 1,500 MW in 2020, the company completed four wind farms, adding another 800 MW of clean energy generation capacity to its portfolio.
PPL’s strategic investments will expand its renewable-generation capacity. PPL expects a regulated capital investment plan of $12 billion through 2026.
PPL plans to achieve its carbon emission target of 70% and 80% by 2035 and 2040, respectively, from its 2010 level. It will do so through the introduction of new carbon capture technology and addition of more renewable sources to the generation portfolio. It also aims to become carbon neutral by 2050.
Dominion Energy has a well-chalked-out long-term capital expenditure plan to strengthen and expand its infrastructure. It expects to make a capital investment of $9 billion annually through 2025.
Dominion Energy’s long-term objective is to add 24 GW of battery storage, solar, hydro and wind (offshore as well as onshore) projects by 2036 and increase the renewable energy capacity by more than 15% per year, on average, over the next 15 years. It plans to invest $42 billion in offshore wind and solar projects during 2022-2035 to further expand its renewable operations.