Clearway Energy CWEN announced that it has entered into a binding agreement to acquire the operational Tuolumne Wind Project from Turlock Irrigation District.

The acquisition is the next step in Clearway's path to meeting its long-term financial objectives, including the goal of delivering the midpoint or better of $2.40-$2.60 in cash available for distribution (CAFD) per share in 2027.

Key Details of CWEN’s Agreement

Tuolumne Wind Project is a 137-megawatt (MW) wind project in Klickitat County, WA that achieved commercial operations in 2009. The project will sell power under a new power purchase agreement with Turlock Irrigation District, an investment-grade regulated entity, with an initial contract term of 15 years to 2040. Along with the purchase, Turlock Irrigation District granted the company a contractual extension option that would allow for the project's possible future repowering.

After factoring in estimated closing adjustments and new non-recourse project-level debt, the company expects its total long-term corporate capital commitment to acquire the project to be approximately $70-75 million, which the company expects to fund with existing sources of liquidity.

The acquisition is expected to provide incremental annual levered asset CAFD on a five-year average basis of nearly $9 million beginning Jan. 1, 2026. The company expects the transaction to close in the first quarter of 2025.

Clearway Strengthens Its Renewable Portfolio

Clearway is making strategic investments and acquisitions to further expand its renewable operations. Its portfolio comprises nearly 11.7 gigawatt (GW) of gross capacity, including 9 GW of wind, solar, and battery energy storage and over 2.7 GW of conventional dispatchable power capacity providing critical grid reliability services.

In October 2024, Clearway started the construction of standalone solar and energy storage projects in Hopkins County, TX. The company announced a $665 million investment in the 200 MW Pine Forest storage and 300 MW Pine Forest solar facilities. The commercial operation of the projects is expected in 2025.

In May 2024, CWEN committed to acquire a 50% cash equity interest in the Rosamond South I solar plus storage project, a 257 MW project located in Rosamond, CA, for nearly $21 million in cash. It completed a joint development agreement for battery development adjacent to CWEN’s Utah solar assets, with the potential to invest up to $85 million at a 10% CAFD yield in 2026.

By 2035, 95% of the electricity the company generates will be carbon-free, and by 2050, CWEN will achieve net-zero Scope 1 and 2 GHG emissions. Clearway has a 30 GW development pipeline that is expected to continue to add renewable assets to CWEN’s portfolio over time, further reducing its carbon intensity.

Other Companies’ Focus on Clean Energy

Per the U.S. Energy Information Administration, the annual share of U.S. electricity generation from renewable energy sources is expected to be 23% and 25% in 2024 and 2025, respectively.

Along with CWEN, some other companies like Dominion Energy D, Duke Energy DUK and NextEra Energy NEE are also set to take advantage of the increasing demand for clean electricity.

Dominion Energy’s long-term objective is to add more battery storage, solar, hydro and wind (offshore and onshore) projects by 2036 and increase the renewable energy capacity by more than 15% per year, on average, over the next 15 years. Organic projects and acquired assets will further expand the company’s clean energy portfolio.

D’s long-term (three-to-five-year) earnings growth rate is 13.64%. The Zacks Consensus Estimate for 2024 earnings per share (EPS) indicates a year-over-year increase of 38.7%.

Duke Energy aims to bring 2.7 GW of battery storage into service by 2031 and 1.2 GW of onshore wind into service by 2033. Such solid renewable capacity maximization plans should enable the company to further bolster its footprint in the expanding renewable energy market.

DUK’s long-term earnings growth rate is 6.35%. The Zacks Consensus Estimate for 2024 EPS indicates a year-over-year increase of 7.4%.

In the third quarter of 2024, NextEra Energy expanded its contracted renewables backlog by adding nearly 3 GW of renewable projects. Its backlog additions include nearly 100 MW of wind projects, 1.4 GW of solar projects, 1.4 GW of battery storage projects and 100 MW of wind repowering.

NEE’s long-term earnings growth rate is 8.12%. The Zacks Consensus Estimate for 2024 EPS indicates a year-over-year increase of 7.6%.

CWEN’s Stock Price Performance

In the past six months, shares of CWEN have risen 6.9% compared with the industry’s 21.8% growth.

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CWEN’s Zacks Rank

The company 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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