NRG Energy in JV for New Technology - Analyst Blog

Three big energy companies, NRG Energy Inc. (NRG), General Electric Co. (GE), and ConocoPhillips (COP), have entered into a joint venture to invest in projects that would foster newer developments and research in paradigm shifting energy technology.

The three companies jointly pooled in $300 million capital to form Energy Technology Ventures. Their goal is to invest in venture- and growth-stage energy technology companies in the renewable power generation, smart grid, energy efficiency, oil, natural gas, coal and nuclear energy, emission controls, water and biofuels sectors, primarily in North America, Europe and Israel.

Over the next four years Energy Technology Venture would invest in 30 growth stage companies researching in cutting-edge energy technology. The three initial investments slated by this joint venture clearly show the direction of their program. Investments in Alta Devices Inc., Ciris Energy Inc. and CoolPlanetBioFuels inhere respective developments in solar photovoltaic, cleaner coals and biofuels.

This marks the first corporate venture investment by NRG Energy. However, the company on its own has initiated a wide range of investments in emerging technologies in solar, wind and nuclear power. Recently, NRG Energy acquired a 290 megawatt solar project from First Solar Inc. (FSLR) and entered into another joint venture with SunPower Corporation (SPWRA) to produce solar power.

NRG Energy's operating earnings during the third quarter 2010 were 87 cents a share, lower than the year-ago figure of $1.02 per share. The Zacks Consensus Estimates for fourth quarter 2010, fiscal year 2010 and fiscal year 2011 currently stand at 35 cents per share, $2.62 per share and $1.08 per share, respectively.

We appreciate the collaboration formed by these market-leading companies, with their individual expertise and know-how in the field of energy technology, promoting clean energy production to meet the ever increasing demand for power.

NRG Energy currently retains a Zacks #3 Rank (short-term Hold rating). On a competitive landscape the net margin of the company fared better than its peers, The AES Corporation (AES) and Calpine Corp. (CPN), in the trailing twelve months.

Based in Princeton, New Jersey, NRG Energy Inc. operates as a wholesale power generation company. The company is also involved in trade of fuel and transportation services, and trade of energy, capacity, and related products in the United States and internationally.

 
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