Man of the hour, CEO Jensen Huang at the Bipartisan Policy Center on September 27, emphasized the crucial role of artificial intelligence (AI) in transforming the energy and utilities sector. According to Huang, AI has the potential to revolutionize the way energy is produced, distributed, and consumed, leading to significant economic and environmental benefits.
Huang highlighted the importance of accelerating the development and deployment of AI in the energy sector, citing examples such as smart grids, energy storage, and renewable energy integration. He noted that AI can help optimize energy distribution, predict energy demand, and identify areas of inefficiency in the grid. For instance, a study by the National Renewable Energy Laboratory (NREL) found that AI can help reduce energy waste by up to 15% by optimizing energy consumption in buildings and homes.
Huang also emphasized the need for a more efficient and resilient energy system, citing the growing demand for electricity and the increasing complexity of the grid. He argued that AI can help address these challenges by providing real-time monitoring and control, predictive maintenance, and advanced analytics. For example, a study by the Electric Power Research Institute (EPRI) found that AI can help reduce the frequency and duration of power outages by up to 50%.
Huang also highlighted the potential for AI to enable new business models and revenue streams in the energy sector, such as peer-to-peer energy trading and community-based energy sharing. For example, a study by the University of California, Berkeley found that peer-to-peer energy trading can help reduce energy costs by up to 20% and increase the adoption of renewable energy by up to 30%.
In terms of energy consumption, Huang noted that AI can help optimize energy usage in buildings, homes, and industries, leading to significant reductions in energy waste and greenhouse gas emissions. According to the U.S. Energy Information Administration (EIA), buildings account for approximately 40% of energy consumption in the United States, and industries account for approximately 30%. AI can help optimize energy consumption in these sectors by identifying areas of inefficiency and providing real-time feedback on energy usage.
In terms of policy, Huang argued that regulatory frameworks should support the development and deployment of AI in the energy sector. He called for increased investment in research and development, as well as workforce training and education programs to ensure that the energy sector has the necessary skills to adopt and deploy AI technologies.
Additionally, Huang emphasized the need for open standards and interoperability protocols to facilitate the integration of AI technologies in the energy sector. He noted that the development of open standards and interoperability protocols can help ensure that AI technologies are compatible with existing energy infrastructure, and can help facilitate the sharing of data and best practices across the industry.
AI has significant potential to transform the energy and utilities sector, leading to increased efficiency, reduced waste, and a more sustainable future. As the energy sector continues to evolve and grow, it is clear that AI will play a critical role in shaping its future, with that in context, let’s take a look at the 10 worst performing utility stocks in 2024.
Photo by Matthew Henry on Unsplash
Our Methodology
To compile our list of the 10 worst performing utility stocks in 2024, we used the Finviz and Yahoo stock screeners to find stocks that have experienced the most significant decline on a year-to-date basis and have a market cap of more than $500 million as of October 15. We then narrowed our choices to 10 stocks with the worst year-to-date performance. We also included their hedge fund sentiment, which was taken from our database of 912 elite hedge funds as of Q2 of 2024. The list is sorted in descending order of their year-to-date performance as of October 15.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 smallcap and largecap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Worst Performing Utility Stocks in 2024
10. Cia Paranaense De Energia – COPEL (NYSE:ELPC)
YTD Performance as of October 15: -17.48%
Market Cap as of October 15: $5.13 Billion
Number of Hedge Fund Investors: N/A
Cia Paranaense De Energia – COPEL (NYSE:ELPC), also known as Copel, is a Brazilian electric utility company that provides power to the Parana state in southern Brazil. The company operates in the generation, transmission, and distribution of electricity. Cia Paranaense De Energia – COPEL (NYSE:ELPC) is a major player in Brazil’s energy market, focusing on hydroelectric power generation.
In Q2, Cia Paranaense De Energia – COPEL’s (NYSE:ELPC) reported stable revenues and margins but lower-than-expected net income. The company’s revenues grew 2.2% year-on-year to $955.26 million, driven by strong distribution offsetting weak generation. Adjusted EBITDA reached $229.97 million, up 6% year-on-year, reflecting the performance of distribution. Net income surged 53.9% year-on-year to $83.85 million
Cia Paranaense De Energia – COPEL (NYSE:ELPC) has demonstrated strong cost control, with a 9% year-on-year decrease in manageable generation and transmission costs. This cost control has enabled the company to maintain stable margins, with an EBITDA margin of 24.1% in Q2. The company has also reduced its leverage, with a net debt/EBITDA ratio of 1.9x in Q2, down from 2.1x in Q2 2023. This reduction in leverage has improved the company’s financial flexibility and reduced its risk profile.
Cia Paranaense De Energia – COPEL (NYSE:ELPC) has also implemented a risk mitigation strategy to reduce its exposure to energy prices. The company has reduced its energy contracted until 2028, which should help mitigate the impact of energy price fluctuations.
Cia Paranaense De Energia – COPEL (NYSE:ELPC) is a good investment opportunity due to its cost control, and reduced leverage. While the company’s Q2 results were mixed, there are several positive trends that suggest the company is well-positioned for the future.
9. Enlight Renewable Energy (NASDAQ:ENLT)
YTD Performance as of October 15: -18.47%
Market Cap as of October 15: $1.85 Billion
Number of Hedge Fund Investors: 2
Enlight Renewable Energy (NASDAQ:ENLT) is an Israeli-based Independent Power Producer (IPP) and a leading developer, constructor, and operator of renewable energy projects. The company has built a strong presence in Israel, Europe, and the United States.
On October 14, Enlight Renewable Energy (NASDAQ:ENLT) announced the full commercial operation of its Solar and Storage Cluster in Israel. This cluster, comprising 12 installations across northern and southern Israel, has a combined solar generation capacity of 254 MW and an energy storage capacity of 594 MWh. It stands as one of the largest renewable energy facilities in Israel’s newly deregulated power market, producing over 50% of the clean electricity under the new regulatory framework. All of the Cluster’s output will be sold to the company’s supplier division, which will market the electricity directly to customers in Israel. The Cluster is expected to generate $34-36 million in revenue during its first full year of operation, not accounting for the additional margin from the company’s supplier division.
Enlight Renewable Energy (NASDAQ:ENLT) has a robust pipeline of projects that are anticipated to increase its gross installed capacity by 618 MW by the end of 2025. The company’s expansion into the U.S. market, where it has multiple projects under construction, is particularly significant.
The Inflation Reduction Act presents a unique opportunity for Enlight Renewable Energy (NASDAQ:ENLT) to benefit from tax credits of up to 30%, boosting the profitability of each new project. Combined with lower costs and higher tax credits in the U.S. market, this offers a major growth opportunity for the company.