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Are You Investing in Renewables?

Recent studies have shown renewables are on the rise and many utility companies are taking advantage of the trend.  Financial reasons outweigh environmental concerns.   The low costs of production from renewable sources versus fossil fuel energy explains the shift.  Several utility companies are investing, building or buying alternative energy sources.  Those sources include hydro, wind, solar, and energy-from-waste.  

Utilities making the transition include American Electric Power(AEP), Duke Energy, NextEra Energy and Southern Company.   AEP recently announced plans to invest $1.8 billion into renewables.  Their project includes a $4.8 billion investment toward building the world’s second largest wind farm in Oklahoma.  AEP will spend more on acquiring renewable assets than fossil fuels.  Since 2007, Duke Energy has invested $4 billion in wind, solar and battery storage.  NextEra Energy Resources has become the world’s largest generator of electricity from wind and solar. And in the last five years, Southern Company, has abandoned ‘clean coal’ and added 4,000 MW of renewables.  To compete and lower production costs, utilities will have to catch up or partner up with utility-scale alternative energy providers. 

Based on stock ratings and research, 5 alternative energy companies made the ‘best to invest’ list.  Hydro and wind energy company, Brookfield Renewable Partners.  Pattern Energy Group, operating 20 wind farms in the U.S., Canada and Chili.  First Solar Energy has plans to double their production rate.  Covanta Holdings is leading the energy-from-waste process and their business model is unique.   They are paid a fee to collect the waste used to generate energy that they then sell to utilities.  Enviva Partners is the world’s largest supplier of wood pellets, sold to utilities, in place of coal.  It is strongly believed that long-term contracts and low production costs of these companies will reduce risk and provide high returns to investors.  Whether it's the public or private sector of the energy industry, renewables are proving most profitable.  Are you investing?


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