Few companies in the world have bet bigger on renewable energy than NextEra Energy (NYSE:NEE). The electric utility is already the global leader in producing electricity from the wind and sun and is a leader in the battery storage market. Meanwhile, its current backlog of renewable energy development projects is bigger than the entire existing operating portfolios of all but two companies in the world.
So when NextEra says it’s excited about an emerging renewable energy technology, investors should take notice. Here’s what the company’s leadership team had to say on its second-quarter conference call about one technology they believe could be key to achieving an emissions-free future.
Getting excited about this emerging technology
NextEra’s CFO Rebecca Kujawa took the lead on the second-quarter call. After running through the numbers, she pivoted toward what the company sees ahead. She stated that:
Based on our ongoing analysis of the long-term potential of low-cost renewables, we remain confident as ever that wind, solar, and battery storage will be hugely disruptive to the country’s existing generation fleet, while reducing cost for customers and helping to achieve future CO2 emissions reductions. However, to achieve an emissions-free future, we believe that other technologies will be necessary, and we are particularly excited about the long-term potential of hydrogen.
Most utilities believe that the currently available renewable energy technology (e.g., wind, solar, and battery storage) won’t be enough to achieve the aspirational goal of being emissions-free. Because of that, leaders like Xcel Energy (NYSE:XEL) have stated that “we will need new carbon-free dispatchable technologies — technologies not yet commercially available at the cost and scale needed to achieve our 2050 aspiration” of being completely emissions-free. Because of that, Xcel and others are pouring money into research and development to “ensure we have these technologies to deploy in the coming decades.” One of the many technologies that the sector is researching is hydrogen, which has NextEra “particularly excited.”
Planning a pilot program
Kujawa then discussed the company’s first investment in hydrogen. She stated that:
Consistent with the toe-in-the-water approach, we have previously utilized with solar and battery storage, we are planning to propose a hydrogen pilot project at Florida Power & Light (FPL). It is an approximately $65 million pilot project, which, subject to Florida Public Service Commission approval, is expected to be in service in 2023. We will utilize solar energy that would have otherwise been clipped to produce 100% green hydrogen through a roughly 20-megawatt electrolysis system. The hydrogen will be used to…
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