Shares of Duke Energy (DUK -0.18%) surged 12.8% in March, according to data provided by S&P Global Market Intelligence. Given the defensive nature of utility stocks, it's not every day that you see a stock in the sector rise by double digits in a short span of time. For Duke, multiple announcements that fit well with President Joe Biden's climate change agenda fueled investor interest in the stock.
Biden recently unveiled a detailed $2 trillion plan to rebuild America's crumbling infrastructure. Aside from investment in traditional infrastructure, Biden's proposal is heavily weighted toward tackling climate change, as he had campaigned, and calls for a clean energy revolution to advance the country to net-zero carbon emissions by 2050. The plan includes a law requiring utilities to obtain more power from renewable sources, such as wind and solar.
Duke Energy unveiled an ambitious clean energy program only late last year and announced some key developments on that front in March.
Duke's largest wind power project started commercial operation last month. The 350-megawatt (MW) Frontier Windpower project in Kay County, Oklahoma, along with its existing 200-MW arm, can generate 550 MW of wind energy. For perspective, that can power as many as 193,000 average-size homes.
Around the same time, Duke announced two new solar power plants in Florida with a capacity of 74.9 MW each. The company has more than 1.9 million solar panels installed in Florida with more than 900 MW of capacity in operation or under development.
These moves are part of Duke's plans to double its renewables portfolio capacity to 16 gigawatts by the end of 2025. Plans also include converting all of its roughly 4,000 light-duty vehicles and half of its 6,000 medium- and heavy-duty trucks to electric vehicles (EVs) by 2030. In a move that reflects its commitment to that goal, Duke partnered with five other leading utilities in early March to install a network of fast-charging EV stations within their service areas to ease long-distance travel for drivers across major parts of the country.
Utilities across the board have fast-tracked efforts to transition to renewable energy in recent years. Duke was visibly lagging peers until it launched its clean energy program last year. It was perfectly timed given the Biden administration's focus on climate change and has only added to the stock's appeal. Duke's clean energy efforts are expected to boost its earnings and dividends in the coming years and ensure the 4%-yielding stock remains one of the best-in-class utility dividend stocks.