Phillips 66 PSX, a leading global refiner, has partnered with the electrical utility firm NextEra Energy NEE to power its refinery in Rodeo, CA. PSX will do so through the energy generated by a new solar facility, which will be owned and operated by NextEra Energy.
Overview of the Solar Facility
The new solar plant is estimated to have a 30.2 megawatts (MW) power generation capacity. The plant is expected to be operational in January 2025, gradually increasing its power generation capacity over the first quarter of the year. The new solar facility shall be constructed on 88 acres of land owned by Phillips 66, located close to its renewable fuels facility based in the San Francisco Bay area. The solar facility is set to have more than 70,000 solar modules. It is anticipated to produce 60,000 MW hours of electricity annually.
Renewable Energy Impact on Refinery Operations
The new solar facility should help the refinery reduce its grid power demand by almost 50%. This will also help PSX’s Rodeo refinery reduce its dependence on external power sources. Furthermore, the solar facility will help the refinery cut down its carbon dioxide emissions by nearly 33,000 metric tons per year, beginning in the January quarter of 2025.
Phillips 66 converted its Rodeo refinery into a renewable fuels facility earlier this year. The Rodeo complex has completely ceased crude oil processing and shifted to producing renewable diesel and sustainable aviation fuels (SAF). The renewable fuel facility achieved full production capacity after its conversion, producing nearly 50,000 barrels of renewable diesel and SAF per day.
Zacks Rank and Key Picks
Currently, both PSX and NEE carry a Zacks Rank #3 (Hold).
Some better-ranked stocks from the energy sector are FuelCell Energy FCEL and TechnipFMC plc FTI, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
FuelCell Energy is a clean energy company offering low-carbon energy solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company designs fuel cells that generate electricity through an electrochemical process that combines fuel with air, reducing carbon emissions and minimizing the environmental impact of power generation. As such, FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.
TechnipFMC plc is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry. The company’s total backlog witnessed a high of $14.7 million in the third quarter of 2024, indicating an 11.1% increase from the previous year’s level. This growing backlog ensures strong revenue growth for FTI.
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