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Sempra Unit to Up Energy Storage Project Via 83.5 MW Capacity

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Sempra Energy (SRE - Free Report) announced that its subsidiary San Diego Gas & Electric (SDG&E) has received an approval from California Public Utilities Commission (CPUC) to add nearly five energy storage projects totaling 83.5 megawatts (MW) to its current storage capacity. Also, the company won a nod for the demand response program of 4.5 MW from CPUC. The company expects to this project to come online by next year to continue its initiative for a greener San Diego.

Energy storage is essential to conserve electricity to be used later when demand is high but supply is low.

The company is committed to supplement more energy storage is the system and has plans to add another 330 MW of storage facility by 2030. The increased storage capacity will help it improve power grid reliability and provide more of renewable, cleaner and sustainable future to its customers.

Need for Storage Capacity

Renewable Energy is attaining popularity as no pollutant is released during electricity generation. However, the greatest drawback of producing energy from a renewable source is the non- availability of the primary resources of sunlight and wind pressure 24X7. Sometimes, excessive renewable energy output is issued when the weather is favorable and demand for power is low.

Energy Storage facilities are a solution to above-mentioned problems. Renewable energy stored in the batteries could be used during high demand without weighing on the fossil fuel plants. In a way, these energy storage facilities will help accelerate growth of renewable energy generation plants and lower the emission level.  

As of Mar 31, 2018, per U.S. Department of Energy, the United States boasts an electric energy storage capacity of more than 25 gigawatts (GW). Of the total capacity, 94% is in the form of pumped hydroelectric storage and the rest 6% in the form of battery, thermal storage, compressed air and flywheel.

Importance of Renewable

Renewable Energy source has been gaining momentum globally. Wind and solar power have been two of the fastest growing sources of electricity generation on the international front over the past decade. In 2017, global installed wind capacity grew by nearly 11%, bringing the global total to 540 GW. Projections by the International Energy Agency indicate that renewable energy will continue to grow more rapidly than fossil fuels over the next two decades.

Per U.S. Energy Information Administration report, during 2014-2017 time period, renewable sources accounted for more than 50% of the total utility scale power plant added in the United States. In 2018, 9 GW of new solar and wind assets will be added, showing the rising significance of renewable sources across the United States.

Sempra Energy’s Take on Renewable

As for renewables, the company is focused on adding solar, wind and hydro assets to its portfolio. As of Mar 31, 2018, IEnova (one of the company’s units) plans to invest $130 million in development, construction and operation of the Don Diego Solar Complex, a 125 MW solar facility in Sonora, Mexico. Management expects operations at the solar project to commence in the second half of 2019.

Last December, the company’s portfolio contained 1,590 MW of solar and wind power operations. Looking forward, realizing the growth opportunities in the renewable energy sources, onshore wind and PV solar capacity additions are expected to average 8 GW and 12 GW, respectively, for the company per year through 2021. A steady focus on the expansion of its renewable capacity will enable the company to provide emission-free power to its clients.

Price Movement

In the past month, shares of Sempra Energy have underperformed the Zacks Utility industry. The stock has lost 7.1% compared with the industry’s decline of 0.2%.



 

Stocks to Consider

Sempra Energy currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Better-ranked stocks from the same industry include the following:

South Jersey Industries, Inc. holds a Zacks Rank #2 (Buy). It reported first-quarter 2018 adjusted earnings of $1.26 per share, surpassing the Zacks Consensus Estimate of 96 cents by 31.3%. Currently, the company has an Earnings ESP of +1.62%.

Spire Inc. (SR - Free Report) has a Zacks Rank #3 (Hold). The company released first-quarter 2018 adjusted earnings of $2.83 per share, beating the Zacks Consensus Estimate of $2.48 by 14.1%. Currently, the company has an Earnings ESP of +66.67%.

NewJersey Resources Corporation (NJR - Free Report) carries a Zacks Rank of 3. It reported first-quarter 2018 earnings of $1.62 per share, outpacing the consensus mark of 96 cents per share by 68.8%. Currently, the company has an Earnings ESP of +175.00%.

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