“There are billions and billions and billions of dollars sitting on the sidelines, waiting to find a home around renewable assets,” John Ketchum, chairman, president and chief executive officer of NextEra Energy, told analysts during a Tuesday morning earnings call.
The company’s solar and wind projects are back on track following an effort to move its supply chains out of China, and NextEra is now aggressively pursuing a stake in the green hydrogen and renewable natural gas sectors.
NextEra Energy is set for double-digit earnings growth through the end of the year after posting a 13.5% year-over-year increase in adjusting earnings per share for the first quarter, company executives said.
The breadth and scale of opportunities in renewable energy has never been greater, NextEra Energy executive vice president and CFO Kirk Crews said. And NextEra Energy doesn’t plan to miss any of them.
The company has doubled the amount of new solar generation it plans to deploy over the next ten years at subsidiary Florida Power and Light, while wholesale arm NextEra Energy Resources signed contracts for another 2,020 megawatts in the first months of 2023. In addition, the California ISO has recommended the approval of a $400 million transmission project by NextEra Energy Resources that Crews said would unlock up to 11 GW of new renewable generation.
But that’s just a fraction of what the company believes it could achieve with the Inflation Reduction Act. Given the current demand for renewable energy, Crews said NextEra Energy Resource’s total combined portfolio could reach 58 GW by 2026. NextEra Energy Partners, the company’s acquisitions and investment arm, has identified 1,300 MW of repowering opportunities,and is looking at the potential to co-locate storage at renewable energy sites. NextEra Energy Partners is also looking to acquire additional renewable energy assets from other companies, Crews said.
In addition, NextEra has taken a keen interest in renewable fuels. Energy Resources has closed a deal to buy a portfolio of landfill gas-to-electric facilities for $1.1 billion, Crews said, and has entered a joint venture with CF Industries to provide green hydrogen to one of the company’s ammonia factories. Ammonia, a compound of nitrogen and hydrogen, is used in fertilizer and can be used as an energy carrier.
Crews said the project would require the installation of 450 MW of new renewable energy to power a 40-ton-per-day hydrogen facility.
Outside this deal, Crews said NextEra is speaking with potential partners and customers regarding hydrogen deals that represent a combined $20 billion in capital investment and could require 15 GW of new renewable energy.
“As the world leader in renewables and a leader in battery storage, we believe we are the logical partner for green hydrogen with significant interconnection and land inventory positions, and deep market expertise to help our potential partners optimize some of the best green hydrogen sites around the country,” Crews said. “As a result, with the right regulations, we see hydrogen quickly becoming a significant technology for our customers and a new growth driver for Energy Resources given the number and size of opportunities we are evaluating.”
It wasn’t always this way, Crews said later during a Q&A with analysts. Before the IRA, he said, hydrogen was not an economic product.
“It is today because of the IRA, and so we are running hard at it,” he said.