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NRG Energy, Inc. has said that it would focus more on its traditional power-generation business and moving its solar-power business into a separate unit, according to a report from The Wall Street Journal.
The move is part of a broad reorganization that the company is doing to bolster its stock and balance sheet.
The Wall Street Journal reported that NRG Energy is planning to separate its solar-power business for it to have limited access to the company’s cash.
NRG Energy is aiming for its solar-power business unit to eventually become a stand-alone company.
The Wall Street Journal stated that NRG Energy aims to conserve $1 billion of capital in 2016 with the reorganization that it is doing.
The company could then use the money saved to reduce its almost $20 billion in long-term debt.
The Business Finance News also mentioned that the NRG Energy’s decision to reorganize is also due to the difficulty of managing traditional energy and renewable energy under the same head.
E. ON SE, the largest German utility company, also reorganized and separated its traditional energy business and renewable energy business last year.
The announced reorganization is considered as a setback for David Crane, the CEO of NRG Energy, according to The Wall Street Journal.
Crane is one of the most passionate advocates of renewable energy in the electricity business, promoting solar panels, wind turbines, and electric cars as the future of the energy industry.
But in a recent conference call with investors, Crane said that the company will be focusing more on “good and near-term returns,” according to The Wall Street Journal.
NRG Energy’s intent is to get away from initiatives that depend on the public’s appetite for new technology.
Crane also said that the company is looking to sell some of its conventional power plants and delay the conversion of coal or oil to natural gas, according to The Wall Street Journal.
The company’s generating stations that sell electricity into deregulated power markets is one of the largest fleets in the nation.
The Business Finance News reported that the move is similar to what other energy company does to improve cash and liquidity as oil prices continue to drop.
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NRG Energy Aims to Transform Renewable Energy Business As Standalone Unit, Part of ...
