Eversource Energy: Clean Profits in Turbulent Times

The global market for clean energy is currently experiencing unprecedented growth. In light of increasing environmental concerns and government regulations, renewable energy sources such as wind, hydropower, biofuels, and solar energy are gaining significant prominence. This development has led to an increase in installed clean energy capacities. Concurrently, rising energy consumption continues to drive the expansion of this sector. According to the U.S. Energy Information Administration (EIA), it is expected that the use of clean energy sources will increase by 17% by 2024, reaching 42 GW, which would represent almost a quarter of national electricity generation. This surge could lead to higher short-term costs for clean energy, due to rising expenses for financing, labor, and land. Nevertheless, tax incentives from the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA) are likely to maintain the competitiveness of solar and wind energy. Notably, the solar and energy storage market shows further growth potential thanks to government programs and tax benefits. A challenging climate, however, prevails in the wind and hydrogen energy sectors. High costs and delays in permitting complicate wind energy projects, while a lack of government incentives slows the development of hydrogen energy. Bruce Flatt, CEO of Brookfield Asset Management, recently highlighted the transformative impact of decarbonization on industry and investments. Brookfield raised 15 billion USD for its renewable energy fund and plans to support companies in 15 countries in reducing CO2 emissions. The strategy includes building renewable energy infrastructures as well as direct electricity supply to corporate clients. Flatt is optimistic about the sector's future prospects, supported by government incentives and increasing capital flows. In this context, Eversource Energy emerges as a leading energy provider in New England. The company has set ambitious goals in the clean energy sector, particularly through significant investments in offshore wind projects. With projects such as South Fork Wind and Revolution Wind, Eversource has established a strong market position. The Sunrise Wind project, in particular, stands out as it is set to become the largest offshore wind project in the U.S. by 2026, delivering 924 megawatts of energy. Eversource Energy generated over 1.5 billion USD in revenue through the sale of 50% of the Sunrise Wind project to Ørsted. These and similar sales have helped the company significantly reduce its debt load and strengthen financial stability. Industry analysts recommend purchasing the stock, seeing an average price target of 72.82 USD, representing an upside potential of 6.5%. Despite impressive progress and stable financial performance, it remains to be seen to what extent Eversource Energy can keep pace with the dynamic development of other sectors, particularly Artificial Intelligence, in the long term.