Reports related to this article:
Project(s): View 7 related projects in PECWeb
Plant(s): View 7 related plants in PECWeb
Released August 04, 2017 | SUGAR LAND
en
Researched by Industrial Info Resources (Sugar Land, Texas)--NRG Energy Incorporated (NYSE:NRG) (Princeton, New Jersey), the largest independent U.S. power producer, saw its net losses deepen in second-quarter 2017, despite higher revenues compared with the year-earlier period. Mild weather, lower margins in Texas, and higher transportation costs for coal erased profits and hiked expenses. But the company is embarking on a three-year transformation plan that executives hope will shed less profitable assets and shift focus to its more promising natural gas developments. Industrial Info is tracking nearly $4 billion in active projects involving NRG.
Last month, executives announced NRG would raise as much as $4 billion through asset sales over the next three years. In a quarterly earnings-related conference call this week, they confirmed that they plan to divest all of the company's renewables-focused subsidiary, NRG Yield. The company did not specify which non-renewable assets would be sold off or how many jobs would be lost, but continues to estimate it will sell off 6 gigawatts worth of coal and gas-fired energy generation. For more information, see July 13, 2017, article - NRG Eyes Renewables as Key Part of $4 Billion in Asset Sales as Prices Pummel Profits.
But it's no surprise, given the direction of energy markets in the past few years, that NRG's investment outlook tilts heavily to natural gas-fired assets. Its largest project under construction is the $600 million Carlsbad Energy Center in Carlsbad, California, which is set to be completed in late 2019. The simple-cycle facility is expected to generate 600 megawatts (MW) from six General Electric (NYSE:GE) combustion turbines, each with a capacity of 100 MW. It will be built adjacent to NRG's existing Encina Power Station. For more information, see Industrial Info's project report.
NRG expects to begin construction next year on the $248.9 million repowering of the Mandalay Generating Station in Oxnard, California. The company plans to retire and permanently remove two existing units and construct a simple-cycle plant to provide more flexibility and a more efficient peaking facility. NRG has proposed several other natural gas-fired facilities spanning the U.S., including a $1.2 billion addition to the Gilbert Generating Station in Milford, New Jersey, which would add 1,028 MW with the addition of two combustion turbines and a steam turbine; and a $550 million peaking plant in Casa Grande, Arizona, which would use a simple-cycle design to generate 594 MW. For more information, see Industrial Info's project reports on the Mandalay, Gilbert and Casa Grande stations.
NRG also has proposed two projects to convert coal-fired facilities to burn natural gas: the $150 million conversion of a generating station in Dunkirk, New York, and the $41 million conversion of a station in Avon Lake, Ohio. The Dunkirk project involves altering three tangential-fired dry-bottom boilers from Alstom by adding burners from Babcock & Wilcox (NYSE:BW), while the Avon Lake project involves converting one of Babcock & Wilcox's own boilers. For more information, see Industrial Info's reports on the Dunkirk and Avon Lake projects.
NRG also is planning a $61 million expansion of a natural gas-fired station in Pittsburgh, Pennsylvania, which will include the installation of three chillers, each with a 1,200-ton capacity, and three engines from Caterpillar (NYSE:CAT), each with a capacity of 2 MW, to meet the growing energy needs for the adjacent UPMC Mercy Hospital. The project is expected to wrap up early next year. For more information, see Industrial Info's project report.
The divestments in renewables, nuclear and, to a lesser extent, natural gas and coal assets are part of a broader transformation plan. Executives said in the conference call that it will result in $590 million of annual cost savings, $215 million in net margin enhancement and a $50 million annual reduction in maintenance capital expenditures. They expect the plan to be finished by the end of 2020, with significant completion by the end of 2018.
NRG reported a net loss of $642 million for the quarter, compared with a $276 million loss in second-quarter 2016, despite $2.7 billion in operating revenues, a 20.15% increase. This included a $208 million net loss on the disposal of NRG's nuclear-focused GenOn subsidiary, which had filed for bankruptcy in June. Capital expenditures were reported to be $542 million, up from $442 million in the same period last year.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
Last month, executives announced NRG would raise as much as $4 billion through asset sales over the next three years. In a quarterly earnings-related conference call this week, they confirmed that they plan to divest all of the company's renewables-focused subsidiary, NRG Yield. The company did not specify which non-renewable assets would be sold off or how many jobs would be lost, but continues to estimate it will sell off 6 gigawatts worth of coal and gas-fired energy generation. For more information, see July 13, 2017, article - NRG Eyes Renewables as Key Part of $4 Billion in Asset Sales as Prices Pummel Profits.
But it's no surprise, given the direction of energy markets in the past few years, that NRG's investment outlook tilts heavily to natural gas-fired assets. Its largest project under construction is the $600 million Carlsbad Energy Center in Carlsbad, California, which is set to be completed in late 2019. The simple-cycle facility is expected to generate 600 megawatts (MW) from six General Electric (NYSE:GE) combustion turbines, each with a capacity of 100 MW. It will be built adjacent to NRG's existing Encina Power Station. For more information, see Industrial Info's project report.
NRG expects to begin construction next year on the $248.9 million repowering of the Mandalay Generating Station in Oxnard, California. The company plans to retire and permanently remove two existing units and construct a simple-cycle plant to provide more flexibility and a more efficient peaking facility. NRG has proposed several other natural gas-fired facilities spanning the U.S., including a $1.2 billion addition to the Gilbert Generating Station in Milford, New Jersey, which would add 1,028 MW with the addition of two combustion turbines and a steam turbine; and a $550 million peaking plant in Casa Grande, Arizona, which would use a simple-cycle design to generate 594 MW. For more information, see Industrial Info's project reports on the Mandalay, Gilbert and Casa Grande stations.
NRG also has proposed two projects to convert coal-fired facilities to burn natural gas: the $150 million conversion of a generating station in Dunkirk, New York, and the $41 million conversion of a station in Avon Lake, Ohio. The Dunkirk project involves altering three tangential-fired dry-bottom boilers from Alstom by adding burners from Babcock & Wilcox (NYSE:BW), while the Avon Lake project involves converting one of Babcock & Wilcox's own boilers. For more information, see Industrial Info's reports on the Dunkirk and Avon Lake projects.
NRG also is planning a $61 million expansion of a natural gas-fired station in Pittsburgh, Pennsylvania, which will include the installation of three chillers, each with a 1,200-ton capacity, and three engines from Caterpillar (NYSE:CAT), each with a capacity of 2 MW, to meet the growing energy needs for the adjacent UPMC Mercy Hospital. The project is expected to wrap up early next year. For more information, see Industrial Info's project report.
The divestments in renewables, nuclear and, to a lesser extent, natural gas and coal assets are part of a broader transformation plan. Executives said in the conference call that it will result in $590 million of annual cost savings, $215 million in net margin enhancement and a $50 million annual reduction in maintenance capital expenditures. They expect the plan to be finished by the end of 2020, with significant completion by the end of 2018.
NRG reported a net loss of $642 million for the quarter, compared with a $276 million loss in second-quarter 2016, despite $2.7 billion in operating revenues, a 20.15% increase. This included a $208 million net loss on the disposal of NRG's nuclear-focused GenOn subsidiary, which had filed for bankruptcy in June. Capital expenditures were reported to be $542 million, up from $442 million in the same period last year.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
