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Alliant (LNT) to Expand Wind Portfolio with 500MW Projects

Zacks

Alliant Energy Corporation LNT announced that it has reached a settlement with customer groups for its proposed New Wind Project. This project, if approved, will add 500 megawatts (MW) to Alliant Energy’s wind generation portfolio.

Alliant Energy has proposed to expand the Whispering Willow Wind Farm in Franklin County and is exploring opportunities to develop additional wind energy assets in other areas of the state. The New Wind Project would bring online 250 MW in 2019 and the remaining 250 MW in 2020.

The company currently owns nearly 568 MW of wind generation plants and plans to add more renewable assets to its portfolio over the next 10 years.

Future Plans

Going forward, Alliant Energy plans to invest $1 billion for developing wind energy farms in Iowa. The proposed investment would almost double its owned and operated wind generation capacity and places it among the leading U.S. electric utilities with owned wind energy.

Per Alliant Energy’s management, the New Wind Project aims to supply low-cost clean energy to customers in the state of Iowa.

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Extension of Investment Credit

The wind energy industry will benefit significantly from the production tax credit (“PTC”) extension. The PTC, which pays 2.3 cents per kilowatt-hour of electricity generated, has expired at 2014 end due to Congressional gridlock. Now, the PTC will be extended through 2020 but will be gradually decreased over the next four years before being completely phased out.

We expect the upcoming wind projects in the U.S. to be able to enjoy the benefit of the tax credit extension. As per the U.S. Energy Information Administration (“EIA”), wind generation capacity is expected to increase 11% in 2016 and another 11% in 2017.

Scope for Renewable Energy

The U.S. Environmental Protection Agency (EPA) had proposed total CO2 reduction of 29% by 2025 and 30% by 2030. But only shutting down coal-based generation units will not be of much help, thereby underscoring the need to increase the share of clean energy in the generation mix.

The renewable space is also getting support from the government in the form of tax credit extensions. This is driving conventional utility companies to shift focus from coal to renewable sources. The EIA report also envisioned U.S. electricity generation from renewable sources to increase 9.5% in 2016 and 5.8% in 2017.

Some of the utilities that are shifting from fossil fuel for renewable sources for energy generation include NRG Energy Inc. NRG, Sempra Energy SRE and Duke Energy Corp. DUK.

Zacks Rank

Alliant Energy currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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