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Dominion Stock Gains From Investment in Infrastructure & Clean Assets

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Dominion Energy (D - Free Report) is expanding and strengthening its infrastructure through the company’s systematic investment to serve its customers efficiently. The company aims to attain net-zero carbon and methane emissions from its electric generation and natural gas infrastructure by 2050.

Dominion’s performance depends on the company’s ability to manage the operations of its transmission and distribution businesses. The company is also exposed to risks associated with operating the nuclear facilities.

Factors Acting as Tailwinds for Dominion Stock

 

Dominion Energy plans to invest $9.8 billion in 2024 and $43 billion in the 2025-2029 period to further strengthen its operation. The company’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 more than 15% per year, on average, in the next 15 years. Organic projects and acquired assets will further expand the company’s clean energy portfolio.

Dominion aims to cut emissions by 70-80% by 2035 from the level of 2005. By 2035, Dominion Energy also intends to make zero and low-emitting resources accountable for 99% of its electric generation. The company has been working on offshore wind projects, battery storage projects and hydropower projects to lower emissions.

Dominion Energy continues to upgrade electric infrastructure by installing smart meters and grid devices, as well as enhancing services to its customers through the customer information platform. The company is also working on a project of strategic undergrounding of 4,000 miles of distribution lines. It has already completed undergrounding nearly 2,000 miles of outage-prone overhead power distribution lines in Virginia. These initiatives will increase the resilience of its operation and enable D to serve the expanding customer base more efficiently.

Apart from Dominion Energy, other utilities like NextEra Energy (NEE - Free Report) , Duke Energy (DUK - Free Report) and Entergy Corporation (ETR - Free Report) have been investing billions of dollars to strengthen their systems as well as provide stable services to millions of customers amid extreme weather conditions. These utilities have been focused on grid modernization, infrastructure hardening and vegetation management to reduce the impact of storms on distribution networks.

Factors That Can Offset the Positives

 

Dominion has several expansion projects, including pipelines, electric transmission lines and conversion. Its other infrastructure projects are under various stages of development. If the company fails to obtain necessary approvals or allocate and coordinate sufficient resources or projects get delayed for completion, it will affect the company’s financials.

Dominion’s financial performance depends on the company’s ability to manage the operations of its transmission and distribution businesses. The operations of the company face several operational risks, including breakdown or damage of equipment or processes due to aging infrastructure, accidents and labor disputes.

 

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