Dow Chemical (NYSE:DOW) has partnered with NRG Energy (NYSE:NRG) to achieve its clean energy usage target as stated in the 2025 Sustainability Goals set forth by the company. Dow had decided to utilize 400 MW of cost-effective clean energy and reduce carbon emissions by 2025. The company has achieved this target within a year of setting the goal and thereby increased the target to 750 MW.
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The partnership agreement with NRG will ensure 10 years of wind power purchased by Dow. The 150 MW, generated from NRG’s Goat Mountain I and II wind farms, will be used to power Dow’s Freeport, TX facilities. The facility is currently supplied with 350 MW of renewable power, corresponding to electricity required to power around 50,000 houses.
Dow’s increase in clean power consumption has made it one of the largest company in the U.S. to power manufacturing plants at such a large scale as well as the chief corporate consumer of wind energy there. Previously, the company used non-renewable energy sources such as fossil fuels, oil and gas. It has now evolved to reduce its carbon footprint by cost effectively utilizing sustainable energy. This additional 150 MW brings the total clean and sustainable energy used by Dow to 500 MW, prompting the rise in target.
The 2025 Sustainability Goals aim to re-evaluate the duty of businesses to promote sustainability. Using innovative techniques, Dow aims to lead the way to a more sustainable plant, partnering with businesses as well as the government.
NRG is a leading power company in the U.S. The company’s Goat Mountain wind farms, which will provide the energy to Dow, is spread over 1,100 acres. The company generates roughly 4,313 MW of solar and wind energy combined. Management at both companies holds a similar outlook on the future of energy and intends to reduce carbon footprint cost effectively.
Dow saw adjusted EPS growth for the fourteenth consecutive quarter in the first quarter of 2016. Adjusted earnings of 89 cents per share and revenues of $10.7 billion for the quarter beat the corresponding Zacks Consensus Estimates.
Looking ahead, the company anticipates sustained momentum in consumer-driven end markets. Demand in North America is expected to be strong while a recovery is projected in Europe and China, for Dow’s innovative and unique products. The company is also concentrating on closing the merger with DuPont (NYSE:DD) which will create a company worth $130 billion, DowDuPont, before breaking up into three separate businesses later.
Dow currently has a Zacks Rank #3 (Hold).
A better-ranked company in the chemical space is Akzo Nobel N.V. (OTC:AKZOY) , sporting a Zacks Rank #1 (Strong Buy).
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NRG ENERGY INC (NRG): Free Stock Analysis Report
DU PONT (EI) DE (DD): Free Stock Analysis Report
DOW CHEMICAL (DOW): Free Stock Analysis Report
AKZO NOBEL NV (AKZOY): Free Stock Analysis Report
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