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Shell's Arm Receives Approval for Delga Solar Farm Project

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European oil giant Royal Dutch Shell plc’s subsidiary Shell Australiarecently received a green signal from Western Downs Regional Council for its 250 megawatt solar power plant project in Western Downs, Queensland. Shell Australia is now making a final financial assessment to study the viability of the project.

The Delga Solar Farm will be located at Woleebee, 25 km (15.5 miles) southwest of Wandoan and is likely to create around 500-800 jobs during construction and around 10 full-time operational jobs subsequently. The solar park will be connected to Australia’s National Grid through an existing substation.

Shell intends to invest approximately $1 billion per year till 2020 in its New Energies division to focus on cleaner and renewable energy sources. The company believes that with the rising demand for energy, investing money into this unit is likely to add significantly to the customer base and drive revenues. Shell aims to cash in on the wide acceptance of electric cars and declining prices of wind and solar energy. With renewable energy becoming reasonable, the massive oil conglomerate sees potential in developing projects like hydrogen fuel-cells, liquefied natural gas and next-generation biofuels.

The Delga project marks the eighth solar farm project approved by the Western Downs Regional Council. With the growing importance of cleaner and renewable energy sources, various multinational energy companies are investing in the Western Downs region which is touted as the energy capital of Queensland. Few weeks ago, Singapore-based Equis Energy received approval for its $2 billion Wandon South Solar project. It is likely to be the largest solar farm (1,000-megawatt) in the region. In the past one month, Australia’s solar sector has witnessed around 1,678 megawatts worth new projects.  The country’s Clean Energy Finance Corporation, is backing various large-scale solar projects as part of the Australian economy’s transition to net zero emissions by the second half of the century, including its commitment of $77 million to three Edify Energy projects — the Whitsunday, Hamilton Gannawarra solar Farms in March.

Overall, around 38 solar plants are operating and 29 are under construction.With the growing investment in such renewable solar projects, Australia is expected to  meet the target of producing 23.5% of energy from renewable resources by the end of 2018.

Zacks Rank and Key Picks

Headquartered in Netherlands, Shell is one of the largest integrated energy companies and is engaged in production, refining, distribution and marketing of oil and natural gas. The company currently carries a Zacks Rank #3(Hold). Shell’s stock has gained around 2.5% year to date, substantially outperforming the 6% decline of the industry it belongs to.

Some better-ranked players in the energy space are TransCanada Corporation (TRP - Free Report) , Lonestar Resources US Inc. and Range Resources Corporation (RRC - Free Report) . All three companies sport a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

TransCanada delivered an average positive earnings surprise of 4.06% in the last quarter.

Lonestar Resources delivered an average positive earnings surprise of 39.71% in the last quarter.

Range Resources  delivered an average positive earnings surprise of 51.82% in the last quarter.

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