NextEra is on a roll

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Among large power companies, NextEra Energy is the clear leader in embracing the energy transition. As the long-time owner of the Solar Energy Generating Systems, a solar thermal facility in California, the company has substantial experience in owning and running solar plants, and got in the game earlier than other big power companies.

In its third-quarter results, NextEra’s presence in the solar market is bigger and badder than ever. Development subsidiary NextEra Energy Resources (NER) added 747 MW of solar contracts and 341 MW of battery storage to its backlog, almost all of which is in the post-2020 timeframe.

This brings NextEra’s pipeline of contracted renewable energy projects to more than 12.3 GW overall, including its sizable wind portfolio. And as the company moves forward, there is an ongoing shift from wind to solar. While it has more than 4 GW of wind scheduled to come online in 2019-2020, this falls to only 603 MW in the 2020-2021 timeframe.

Solar does the opposite, going from 1.5 GW in 2019-2020 to more than 2.8 GW in 2021-2022. On the company’s quarterly results call, Chief Financial Officer and VP of Business Management Rebecca Kujawa predicted that while she expects demand for wind to remain steady, that “solar demand will continue to increase through the early part of the next decade.”

 

More New York, more batteries

The company’s solar projects also show a geographic shift. While NER’s portfolio remains geographically diverse, 2019-2020 projects are led by Georgia, with a number of projects in California and Arizona as well as smaller volumes in New England, Colorado and other states.

In 2021-2022 New York is the largest single location, at 550 MW of the company’s 2.8 GW of contracted projects. NextEra has done well in the state’s solicitations for large-scale clean energy.

But perhaps the biggest change is the rise of battery storage. NER’s pipeline goes from 50 MW of battery storage projects in 2019-2020 to more than 10x that in 2021-2022, with Kujawa noting that “more than 50% of the solar projects we’ve added to our backlog include a battery component”.

 

Solar in its service area

But while many large power companies are building solar, wind and even battery projects these days, what has made NextEra unique is its willingness to build large volumes of solar in the service area of its subsidiary utility, Florida Power and Light (FPL).

FPL made headlines with its “30 x 30” plan to put 30 millions solar panels (~11-13 GW online by 2030. Recently it also made progress by reaching a settlement with intervenors around its Solar Together program, which will include 10% participation by low-income customers. As can be expected of FPL, Solar Together is the largest community solar program in the nation.

It is important to note that like pretty much all utilities, FPL has remained hostile to customer-owned, distributed solar. FPL is fine with solar, as long as it owns it and/or it doesn’t threaten its investments in its transmission and distribution system.

And along the way, the company is making good money. Not only FPL but NER and NextEra as a whole have remained consistently profitable, with health earnings per share in Q3 and ongoing.