Shares of Orbital Energy Group (NASDAQ:OEG) jumped as much as 37.1% in trading Tuesday after the company announced a new partnership. Shares were up 16.9% at 3:25 p.m. EST.
Orbital announced an engineering, procurement, and construction (EPC) agreement with the newly formed Black Sunrise Half Century Fund. The fund is decommissioning coal-fired power plants across the U.S. and converting them to solar energy. Management expects the partnership to begin providing services in the second quarter of 2021.
This is a sizable agreement considering the Black Sunrise Fund expects to build over 1 gigawatt of solar power plants with its initial investment of $725 million. It'll take time to build out these projects, but they'll deliver revenue for many years for Orbital Energy Group.
This is an important contract for a company as small as Orbital Energy Group that is trying to establish itself as a preferred EPC company for developers. The company generated just $13.6 million in revenue during the third quarter and lost $5.7 million. If it can win more deals like this and increase recurring revenue, this could be a great performing renewable energy stock.