NextEra Energy Inc. expects demand for power from new renewable energy (RE) projects to triple in the next seven years compared to the past seven, driven by data centers.
The major United States RE electricity producer has traditionally been supported by replacement cycle demand, in which “higher cost, less efficient generation has been retired in favor of low-cost renewables and battery storage”, chair, president and chief executive John Ketchum said in NextEra Energy’s earnings conference for the second quarter.
“We expect this to continue and, while replacement cycle demand has been around for a long time, growth cycle demand is new”, Ketchum explained. “With the exception of a few states such as Florida, power demand from new growth has been static in our industry for decades.
“That’s changing as power demand is projected to grow four times faster over the next two decades compared to the prior two. That growth is being driven by demand across multiple sectors, which is expected to create a long-term opportunity for fast to deploy, low-cost generation”.
“Energy Resources couldn’t be better positioned, as it has a 300-gigawatt pipeline, half of which is in the interconnection queue process or is already interconnection ready”, Ketchum added, referring to subsidiary NextEra Energy Resources LLC.
Energy Resources added 3,000 megawatts (MW) of backlog during the quarter, 860 MW of which come from agreements with Google LLC to meet the tech giant’s data center power demand.
“With these additions, NextEra Energy Resources’ backlog now totals roughly 22.6 gigawatts after taking into account more than 1,600 MW of new projects placed into service since the first-quarter 2024 financial results call in April”, the Juno Beach, Florida-based company said in its quarterly report.
Ketchum said, “These results support our belief that the bulk of the growth demand will be met by a combination of new renewables and battery storage”.
“As data center growth accelerates to facilitate our economy’s shift to artificial intelligence and as we continue to re-domesticate and electrify across 8 multiple sectors, our nation must embrace an ‘all of the above’ strategy to meet increasing electric demand”, Ketchum added.
NextEra Energy, though, still operates a fleet of natural gas-fueled generation units and Ketchum maintained that gas is a “bridge fuel” and that the U.S. “needs all forms of energy”.
For the second quarter, NextEra Energy reported $1.6 billion in net profit, or $0.79 per share, slashed from $2.8 billion, or $1.38 per share, for the same three-month period the prior year.
It has now made $3.9 billion in net income for the first half of 2024, compared to $4.9 billion for the first six months of 2023.
NextEra Energy’s net earnings adjusted for non-recurring or extraordinary items for the second quarter of 2024 came at $2 billion, or $0.96 per share, up from $1.8 billion, or $0.88 per share, for the corresponding period of 2023.
It expects full-year adjusted earnings per share to be in the range of $3.23 and $3.43.
NextEra Energy declared a regular quarterly dividend of $0.515 per common unit. NextEra Energy expects to grow dividends per share at about 10 percent per year through at least 2026, relative to 2024.
The company had $12.8 billion of current assets as of the end of June, including $1.5 billion of cash and cash equivalents. Meanwhile, its current liabilities totaled $26.2 billion including a $7.3 billion current portion of long-term debt plus $2.7 billion of short-term debt.
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