National Grid PLC (NGG - Free Report) recently announced that its non-regulated unit — National Grid Ventures (NGV) — has completed the acquisition of Geronimo Energy, awind and solar developer in North America. The acquisition was valued at $100 million.
Moreover, the company has invested $125 million to acquire 51% share of 379 megawatts (MW) of solar and wind generation projects from Geronimo Renewable Infrastructure Partners. The buyout has been completed through a joint venture with Washington State Investment Board (‘WSIB’).
These acquisitions will enable National Grid to expand presence in the U.S. renewable generation market.
Focus on U.S. Renewable Business
National Grid’s U.S. business focuses on boosting customer value and transitioning toward clean energy. Aiming to reduce greenhouse gas emissions by 70% by 2030 from 1990 levels, the company is targeting to generate more electricity from renewable sources.
Moreover, in the United States, the company is making successful efforts to pursue opportunities in electricity and gas transmission as well as large-scale renewable options. The recent joint venture with WSIB to acquire Geronimo Energy is the first significant step by the company to enhance renewable generation.
Growing Renewables in the United States
Dependency on fossil fuel,primarily coal, has gradually declined in the past few years owing to awareness of emission-less environment. This is compelling the industry to shift focus to clean energy sources. Per an Energy Information Administration (EIA) report, U.S. electricity generation from renewables has surpassed coal in April 2019. Renewable sources contributed 23% to total electricity generation compared with 20% from coal.
Utility companies are also shifting their focus to renewables and other clean sources to generate electricity. Companies like WEC Energy Group, Inc (WEC - Free Report) , NiSource (NI - Free Report) and Ameren Corporation (AEE - Free Report) are focusing on renewable sources to add clean generation in their production portfolios.
Zacks Rank & Price Movement
National Grid carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Year to date, National Grid’s shares have gained 9.5% compared with the industry’s growth of 15.3%.
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