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Dominion's (D) JV to Create Sustainable Energy From Methane

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Dominion Energy (D - Free Report) announced that it has entered into a joint venture with Smithfield Foods, Inc. to form Align Renewable Natural Gas. Align Renewable Natural Gas will capture methane emissions from hog farms and convert these into clean renewable energy for residential home heating and power for local businesses.

The project will start operation by collecting waste methane from hog farms in North Carolina, Virginia and Utah, and then convert the same into renewable natural gas. The joint venture will benefit from Smithfield Foods’ relationships with contract farmers.

Importance of the JV

Dominion has been working on increasing renewable generation in its production portfolio. The company has a considerable presence in Virginia owing to its solar assets. The new joint venture with Smithfield Foods will aim at lowering methane emission, which is at least 25 times more potent than CO2 as a greenhouse gas.

Dominion, through its existing projects, has already lowered more than 10 billion cubic feet of methane emissions. The new project will further lead to a decrease in methane emissions in the atmosphere. The companies will jointly invest $250 million in this project over the next decade.

Focus on Clean Energy Production

The usage of clean resources to produce electricity in on the rise in North America. Per the recent U.S. Energy Information Administration (EIA) release, the usage of renewable sources, Wind, solar and other non-hydropower, will keep on increasing. More than 10% of the total electricity generated in the United States in 2018 was generated from the above sources and the contribution from the same will exceed to 11% in 2019.

The usage of natural gas and other clean sources continues to curb the dominance of coal in the electricity generation mix in the United States. Utilities like NextEra Energy (NEE - Free Report) and Xcel Energy (XEL - Free Report) continue making substantial investments to add more renewable assets in their existing portfolio.

Price Movement

In the past six months, shares of the company have gained nearly 15.5% compared with its industry's growth of 5.6%.

 



Zacks Rank & A Key Pick

Dominion Energy currently has a Zacks Rank #3 (Hold). A better-ranked stock from the same industry is Ameren Corporation (AEE - Free Report) , which carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ameren delivered average positive surprise of 15.4% in the last four quarters and its long-term earnings growth is pegged at 6.79%. The Zacks Consensus Estimate for 2018 has moved up 3.7% in the past 60 days to $3.37 per share.

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