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Duke Energy Corp DUK-N said on Monday it has agreed to sell its unregulated utility scale Commercial Renewables business to Brookfield Renewable in a deal valued at about $2.8-billion.

Duke said it expects net proceeds of about $1.1-billion from the sale, which the company will use to help incorporate more than 30,000 megawatts of regulated renewable energy into its system by 2035.

The proceeds are also expected to help strengthen its balance sheet, avoid additional debt and improve grid reliability.

The deal comes at a time when electric utilities in the United States are largely shifting away from fossil fuels toward cleaner energy sources, including solar and wind, to meet climate goals.

Charlotte, North Carolina-based Duke is planning to spend $65-billion over the next five years, most of it directed toward its transition to low-carbon energy sources, the company’s CFO told Reuters last week.

Duke aims to reduce carbon emissions by more than 50 per cent by 2030 and plans to retire all of its coal plants by 2035. Its goal is to achieve net-zero carbon emissions by 2050.

The sale agreement with renewable power assets operator Brookfield Renewable includes more than 3,400 megawatts of utility-scale solar, wind and battery storage across the United States, along with operations, new project development and current projects under construction, Duke said on Monday.

The deal is expected to close by the end of 2023, Duke said. Morgan Stanley & Co LLC and Wells Fargo Securities LLC are Duke’s financial advisers, with Skadden, Arps, Slate, Meagher & Flom LLP serving as legal counsel.

Duke, which initiated the sale process for the commercial renewables unit in November, reported a smaller-than-expected first-quarter profit last month, hurt by unfavourable weather, lower volumes and higher interest expenses.

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