NRG Energy's Green Strides - Analyst Blog

NRG Energy Inc. (NRG) received a 10-year contract from the New York State Energy Research and Development Authority (NYSERDA) for power generated using renewable biomass fuel at its Dunkirk Generating Station in western New York. The project, which is expected to come online by the end of 2011, will produce up to 15 megawatts (MW) of the station’s total output using clean wood biomass.
 
NRG plans to locally source harvested biomass including forest and wood processing residues.
 
NRG Energy is focused on adding sustainable biomass to the fuel mix, cutting emissions and supporting New York’s goal of producing 30% of its electricity from renewable sources by 2015.
 
In 2004, New York established a Renewable Portfolio Standard (RPS). Subsequently in 2009, the New York Public Service Commission, acting on a goal set by Governor David Paterson, expanded the RPS goal to increase the proportion of renewable electricity sold in New York from the pre-existing 25% to 30% by 2015. To meet this goal, NYSERDA conducts competitive solicitations to award contracts for projects that deliver renewable energy to the New York wholesale power market.
 
In addition to the Dunkirk project, NRG is planning to use biomass as the primary fuel at its Montville Generating Station after repowering one of the facility’s existing units to produce up to 40 MW of electricity. In Louisiana, NRG has created a 20-acre test site using locally grown switchgrass and sorghum for use as biomass fuel at its Big Cajun II plant.
 
NRG Energy owns and operates one of USA’s largest and most diverse power generation portfolios. Headquartered in Princeton, New Jersey, the company’s power plants provide more than 24,000 megawatts of generation capacity. NRG’s retail business, Reliant Energy, serves more than 1.6 million residential, business, commercial and industrial customers in Texas.
 
However our bullish outlook on NRG Energy would be partially offset by execution risk related to the expansion of its nuclear generation capacity, natural gas price volatility and need for environmental capital expenditure to adhere to federal guidelines. We maintain our long-term Neutral recommendation on the Zacks #3 stock.

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