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Equinor (EQNR) Initiates Operations in Apodi Solar Project

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Equinor ASA’s (EQNR - Free Report) first solar plant —Apodi — is now operational and connected to the grid.

The 162 megawatt (MW) Apodi Solar plant, operated by Scatec Solar, is located in the municipality of Quixere, Cearastate in Brazil. It is projected to supply about 340,000 MW-hours of electricity annually, which is equivalent to providing energy to more than 170,000 households. The clean energy produced by the plant is likely to help in CO2 reduction of about 200,000 ton, annually.

In October 2017, Equinor formed a joint venture (JV) with Scatec Solar to build, own and operate large scale solar plants in Brazil. Moreover, the company inked an agreement to purchase a stake of 40% in the construction ready project. The JV will be accountable for operation and maintenance as well as asset management of the solar plant.

The asset holds a 20-year power purchase agreement (PPA) with CCEE, the Brazilian Power Commercialization Chamber. Two weeks ago, Equinor purchased a 10% stake in Scatec Solar. Currently, the parties have a holding of 43.75% each. The remaining 12% is held by Apodi Participaçoes, which was formed by the Brazilian companies Z2 Power, PactoEnergia and KromaEnergia.

The plant’s operation is in sync with Equinor’s strategy to balance oil and gas portfolio with prospective renewable energy sources. The company has developed a substantial offshore wind portfolio with a capacity to provide more than 1 million European homes with renewable energy. In June, Equinor acquired a 50% interest in the Guanizul 2A (G2A) solar asset in Argentina. The project, which has a potential to provide renewable energy to about 80,000 Argentine households, is expected to commence production toward the end of 2019. Final decision regarding the investment is expected by late 2018.

In Brazil, Equinor has numerous projects of the value chain that include exploration through discoveries and development, production as well as within renewable energy. This makes the country a vital part of the company’s portfolio.

Zacks Rank & Other Key Picks

Currently, Equinor carries a Zacks Rank #2 (Buy).

A few better-ranked players in the same sector are Eni SpA (E - Free Report) , Enterprise Products Partners L.P. (EPD - Free Report) and SunCoke Energy, Inc (SXC - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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SunCoke acquires, owns and operates the coke making and coal mining operations. The company delivered an average positive earnings surprise of 302.6% in the last four quarters.

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