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.
8. Centrais Eletricas Brasileiras (NYSE:EBR)
YTD Performance as of October 15: -18.79%
Market Cap as of October 15: $15.78 Billion
Number of Hedge Fund Investors: 6
Centrais Eletricas Brasileiras (NYSE:EBR), commonly known as Eletrobras, is the largest power utility company in Latin America, with operations in electricity generation, transmission, and distribution across Brazil. The company operates a significant portfolio of hydroelectric plants and plays a crucial role in Brazil’s electricity market.
In Q2, Centrais Eletricas Brasileiras (NYSE:EBR) reported a net income of $110 million, despite a 25.8% annual reduction due to higher operating costs and financial expenses. However, the company’s adjusted EBITDA margin of 50.1% and net debt of $8 billion with a leverage ratio of 1.95x, demonstrate its solid financial health.
In Q2, Centrais Eletricas Brasileiras (NYSE:EBR) performance was marked by a 9.1% annual increase in regulatory net operating revenue and a 10% increase in energy volume. However, total operating costs increased by 32.7% year over year, mainly due to charges for using the electricity grid and higher costs for purchased energy. Despite these challenges, Centrais Eletricas Brasileiras (NYSE:EBR) continues to invest in its transmission segment, with $357 million in Q2.
Centrais Eletricas Brasileiras (NYSE:EBR) is a compelling investment opportunity for value investors seeking a high-quality company with a strong track record of profitability and a solid financial profile. Despite a mixed Q2 performance, the company continues to show excellent signs of improvement, including a reduction in operating expenses, strategic divestment of non-core assets, and a strengthened capital structure. The company is expected to achieve 32.25% earnings growth in this year. With a consensus Buy rating from industry analysts, the stock has a target price of $10.40, which represents a 41.71% upside potential from its current level.
7. Algonquin Power & Utilities (NYSE:AQN)
YTD Performance as of October 15: -19.94%
Market Cap as of October 15: $4.00 Billion
Number of Hedge Fund Investors: 35
Algonquin Power & Utilities (NYSE:AQN) is a utility company serving over 1.2 million customers across the United States, Canada, and Chile. The company operates a portfolio of high-quality assets, including 13,517 miles of electric transmission lines, 8,482 miles of gas pipelines, and 6,941 miles of water mains.
On August 9, Algonquin Power & Utilities (NYSE:AQN) announced a definitive agreement to sell its renewable energy business, excluding hydro assets, to a wholly-owned subsidiary of LS Power for a total consideration of up to $2.5 billion. This sale is part of the company’s strategy to become a pure-play regulated utility and optimize its regulated business operations, aiming to create long-term value for both customers and shareholders.
Analysts view Algonquin Power & Utilities’ (NYSE:AQN) move as being on the right path, transforming into a traditional utility company with a stronger focus on regulated assets and cost reduction initiatives. The company’s new CEO is dedicated to cutting costs and improving profitability, with an emphasis on “capital-light growth” by enhancing regulatory coverage and conducting rate reviews. Industry analysts have reached a consensus Buy rating on the stock, with an average target price of $6, implying a potential upside of 16.80% from current levels.
6. ReNew Energy (NASDAQ:RNW)
YTD Performance as of October 15: -22.58%
Market Cap as of October 15: $2.21 Billion
Number of Hedge Fund Investors: 16
ReNew Energy (NASDAQ:RNW) is a UK-based renewable energy company, operating in India as the country’s largest renewable energy company. ReNew Energy (NASDAQ:RNW) specializes in solar and wind power generation.
The company’s growth potential is driven by India’s push for renewable energy. In Q1 2025, ReNew Energy (NASDAQ:RNW) secured agreements to produce about 15.6 GW of energy, with 7.12 GW of operational capacity, including 4.7 GW of wind and 2.4 GW of solar power.
Management says the company is on track to boost its financial returns and recent auction wins should bring in higher returns than before, thanks to lower module prices and a solid supply chain. The company’s manufacturing investments also give it an edge: the Jaipur facility, for example, is set to produce over 2 GW of modules this year, with the Gujarat facility expected to ramp up production by year-end. ReNew Energy (NASDAQ:RNW) also locked in external module sales for about 600 MW, which should boost profitability as these projects go live.
ReNew Energy (NASDAQ:RNW) has aggressive growth plans, including doubling its portfolio by 2029. Industry analysts have a consensus Buy rating on the stock with a target price of $8.70, implying a potential upside of 38.68% from current levels.
5. Centuri Holdings (NYSE:CTRI)
YTD Performance as of October 15: -23.91%
Market Cap as of October 15: $1.56 Billion
Number of Hedge Fund Investors: 18
Centuri Holdings (NYSE:CTRI) is a utility infrastructure services provider that has established itself as a leader in the renewable energy space.
On September 12, Centuri Holdings (NYSE:CTRI) announced a significant milestone in the construction of the Ørsted Sunrise Wind project, a major offshore wind farm located in New York’s Capital District. The project, which is being developed, constructed, and operated by Ørsted, aims to deliver up to 924 megawatts of renewable energy, enough to power nearly 600,000 homes. As part of the project, Centuri Holdings’ (NYSE:CTRI) subsidiary, Riggs Distler, has been responsible for constructing, assembling, and inspecting large, specialized components essential to wind turbine foundations, known as advanced foundation components (AFCs). The completion of more than half of these components marks a significant milestone in the project’s progress.
As the world continues to transition towards renewable energy sources, Centuri Holdings (NYSE:CTRI) is well-positioned to capitalize on this trend. The company’s expertise in the offshore wind industry, its partnerships with major players in the sector, and its commitment to local communities make it an attractive investment opportunity.
4. Hawaiian Electric Industries (NYSE:HE)
YTD Performance as of October 15: -28.82%
Market Cap as of October 15: $1.79 Billion
Number of Hedge Fund Investors: 21
Hawaiian Electric Industries (NYSE:HE) is the largest supplier of electricity in Hawaii, serving 95% of the state’s residents. The company is actively working toward transitioning its energy grid to rely more on renewable resources, such as solar and wind, to reduce its carbon footprint and align with the state’s renewable energy goals.
On September 25, Hawaiian Electric Industries (NYSE:HE) announced that it had successfully closed an offering of newly issued shares of its common stock, raising approximately $558 million in net proceeds. The offering, which was priced at $9.25 per share, is a significant step towards pre-funding, which is an expected contribution to the Maui wildfire litigation settlement. As announced earlier, Hawaiian Electric Industries’ (NYSE:HE) total payment obligation under the proposed global settlement is $1.91 billion, to be paid in four equal annual installments. The company’s first settlement payment of approximately $478 million is expected to be due no sooner than mid-2025.
Hawaii’s lack of preparedness and response to wildfires is a major concern. The state has not implemented measures such as power shut-offs during heat waves and windy periods, and its vegetative management program is underfunded and under-addressed. The Fire Research Safety Institute report on Hawaii urged the implementation of these measures, as well as the undergrounding of power lines in high-risk areas.
Hawaiian Electric Industries (NYSE:HE) is offering equity to address its financial obligations related to the settlement. By securing this financing ahead of schedule, the company is demonstrating its ability to deliver on its commitments and make progress towards resolving the going concern assessment disclosed in August 2023. The settlement, which is still in the final stages of negotiation, is expected to be signed and finalized soon, pending judicial review and approval. Once the settlement is finalized, Hawaiian Electric Industries (NYSE:HE) will have a clear path forward to resolve its obligations and move forward with its business operations.
3. Montauk Renewables (NASDAQ:MNTK)
YTD Performance as of October 15: -36.36%
Market Cap as of October 15: $814.27 Million
Number of Hedge Fund Investors: 13
Montauk Renewables (NASDAQ:MNTK) is a leader in the green energy sector, specializing in converting waste into green energy. With over 30 years of experience, Montauk Renewables (NASDAQ:MNTK) has pioneered the landfill gas-to-energy industry, turning biogas from landfills into renewable natural gas (RNG) and electricity. The company has also expanded into the agricultural sector, focusing on anaerobic digestion (AD) technologies that convert waste from dairy and swine farms into RNG.
The demand for RNG is expected to grow, with a regulatory environment increasingly favorable to RNG producers. Programs like the California Low Carbon Fuel Standard (LCFS) and similar initiatives in Oregon, Washington, and New Mexico offer incentives for low-carbon fuel production. Montauk Renewables’ (NASDAQ:MNTK) dairy and swine RNG projects have exceptionally low carbon intensity (CI) scores, with dairy RNG averaging -340 gCO2e/MJ and swine RNG at -347 gCO2e/MJ.
The U.S. Environmental Protection Agency (EPA) estimates that over 8,000 U.S. farms could support biogas recovery systems, representing an energy potential of more than 170 million MMBtu per year. Montauk Renewables (NASDAQ:MNTK) is well-positioned to capture a significant portion of this market, especially in dairy and swine farm RNG production, as only a small fraction of farms currently produce RNG.
In the next 5-10 years, Montauk Renewables (NASDAQ:MNTK) is expected to capture an increasing share of the RNG market, driven by its low-CI projects and favorable regulatory landscape. The company’s focus on high-return projects further supports its long-term growth prospects, with potential cash paybacks on capital investments within 2-5 years. The company is forecasted to grow its earnings by 62.5% this year. Industry analysts have a consensus Buy rating on the stock, with an average price target of $6.31, indicating a potential 10.68% upside from current levels.
2. Altus Power (NYSE:AMPS)
YTD Performance as of October 15: -53.88%
Market Cap as of October 15: $503.97 Million
Number of Hedge Fund Investors: 11
Altus Power (NYSE:AMPS) focuses on providing clean energy solutions by developing, owning, and operating distributed solar energy projects across the United States. The company serves commercial, industrial, and municipal customers and aims to expand the use of solar power to meet energy demands sustainably.
Altus Power’s (NYSE:AMPS) strong partnerships, growing demand for electricity, and attractive business model make it an attractive investment opportunity. The company has a portfolio of 990MW of installed PV capacity and serves a large network of 500 commercial customers and 25,000 solar community subscribers.
Altus Power’s (NYSE:AMPS) strategic position in commercial-scale solar offers a higher return on investment (ROI) compared to utility-scale and residential-scale segments. This is due to construction and operating costs that are close to those of utility-scale companies, combined with the ability to make greater use of economies of scale. As a result, the company has achieved a revenue per MWh of electricity produced of $166/MWh, significantly higher than the average of $125/MWh and median of $101/MWh calculated from a sample of 5 of the largest utility-scale companies globally.
Altus Power’s (NYSE:AMPS) attractive business model, strong partnerships, and growing demand for electricity make it a compelling investment opportunity. The company is anticipated to experience 100% earnings growth this year. Industry analysts are bullish on the company’s stock price and have a consensus Buy rating at a target price of $5.56, which implies a 44.66% increase from its current level.
1. New Fortress Energy (NASDAQ:NFE)
YTD Performance as of October 15: -74.42%
Market Cap as of October 15: $2.43 Billion
Number of Hedge Fund Investors: 20
New Fortress Energy (NASDAQ:NFE) is an energy infrastructure company that focuses on natural gas, particularly liquefied natural gas (LNG). The company’s mission is to deliver cleaner, affordable energy by building and operating LNG terminals and facilities in emerging markets.
New Fortress Energy (NASDAQ:NFE) has been facing challenges in addressing its near-term liquidity needs and debt maturities. However, the company has successfully navigated these difficulties by securing a deal with creditors to raise $400 million through an equity offering announced on October 1.
The equity offering, which offered 46,349,942 shares of Class A common stock at $8.63 per share has provided a crucial capital injection for the company. New Fortress Energy’s Chairman and CEO, Wes Edens, further expressed confidence in the company’s future by personally investing $50 million in the offering. Additionally, the company reached a transaction support agreement with certain noteholders, issuing $1.2 billion in new 12% 2029 senior secured notes and exchanging $1.4 billion worth of existing 2026 and 2029 notes into new 12% 2029 senior secured notes. This raised the company’s bond debt from $3.12 billion to $3.45 billion.
With this substantial increase in liquidity, the company is now in a better position to address delayed vendor payments and capital expenditures. The LNG production from its Fast LNG facility in Altamira, Mexico, is expected to generate significant cash flows, which will be essential for meeting the increased interest payment obligations. Although the company will need to manage the challenges posed by material shareholder dilution and higher interest payments, the resolution of near-term debt and liquidity concerns has removed a major overhang from the stock. Industry analysts have reached a consensus Buy rating for the stock, with an average target price of $19.07, indicating a potential upside of 68.30% from current levels.
While we acknowledge the potential of New Fortress Energy (NASDAQ:NFE) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NFE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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