NextEra Adds to Renewables Backlog, Sees Cheaper Renewable Energy Future

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Researched by Industrial Info Resources (Sugar Land, Texas)--NextEra Energy Incorporated (NYSE:NEE) (Juno Beach, Florida) reported strong performance for the fourth-quarter and full-year 2017. During the year, the company added to its renewable energy backlog and made progress on its power projects. Chief Executive Officer Jim Robo sees NextEra continuing its renewables buildout as the cost of wind and solar continues to drop and technology continues to improve. Industrial Info is tracking $13.7 billion in active NextEra projects.

In 2017, NextEra added 2,700 megawatts (MW) of new renewables projects to its backlog and commissioned 2,150 MW of wind and solar projects, including 1,600 MW of repowering projects. In the company's conference call, Robo said, "Our prospect for new renewables growth has never been stronger," noting that Congress made no retroactive changes to the wind Production Tax Credit and solar Investment Tax Credit, which provide tax abatement for wind and solar projects. "With incentives, wind is the cheapest form of energy at 1.2 to 1.8 cents per kilowatt-hour (kWh) at high wind sites, while solar continues to be priced at a discount to other forms of generation at 2.5 to 3.5 cents per kWh."

Robo noted the continuing improvement in renewables pricing and technology. "Wind turbine technology continues to improve through a combination of taller towers and wider rotor diameters. Today, we are installing 127-meter-rotor-diameter turbines. By 2021, we expect manufacturers to be selling approximately 150-meter rotor diameters in the U.S. market, further increasing net capacity factors and helping reduce installed wind costs on a dollar-per-kilowatt basis. Over the past year, we have seen an approximate 30% reduction in turbine costs. Through the end of the decade, we expect another 10% decline per year on average."

Speaking of solar power, Robo said, "By early in the next decade, as further cost declines are realized and module efficiencies continue to improve, we expect that without the incentives, solar pricing will be 3 to 4 cents per kWh, below the variable costs required to operate an existing coal or nuclear generating facility of 3.5 to 5 cents per kWh."

Among NextEra's renewable energy projects is the construction of eight solar sites, each generating 74.5 MW. Four have been completed, and the remaining four are on track to be completed this quarter. The Blue Cypress Solar Energy Center in Vero Beach, Florida, is among these. Construction began last summer, with Black & Veatch Incorporated (Overland Park, Kansas) performing engineering, procurement and construction (EPC) on the project, which has an estimated total investment value (TIV) of $161 million. For more information, see Industrial Info's project report.

NextEra is in the planning stages for the Bonita II Windfarm in Morton, Texas. The facility would generate 150 MW. Construction on the $240 million project is set to kick off this year, with completion by the year's end. The project would use 75 2-MW wind turbine-generators. For more information, see Industrial Info's project report.

NextEra Chief Financial Officer John Ketchum discussed some of the company's nonrenewable projects. "This month, we completed the early retirement of the St. Johns River Power Park, an approximately 1,300-MW coal-fired plant co-owned with JEA [Jacksonville Electric Authority (Jacksonville, Florida)]." Demolition and dismantlement of the facility is set to kick off this quarter, taking about a year to complete. Chicago Bridge & Iron Company (NYSE:CBI) (The Hague, Netherlands) is performing engineering, and Total Wrecking & Environmental (Buffalo, New York) is the demolition contractor. For more information, see Industrial Info's project report.

"Construction on the approximately 1,750-MW Okeechobee Clean Energy Center remains on schedule and on budget. Additionally, progress on the Dania Beach Clean Energy Center continues to advance through the regulatory approval process. Both plants are natural gas-fired plants in Florida.

Construction on the Okeechobee facility began early last year and is expected to be completed in mid-2019. The combined-cycle facility will generate 1,600 MW. Zachry Industrial Services Group (San Antonio, Texas) is performing EPC work on the project, which has an estimated TIV of $1.2 billion. For more information, see Industrial Info's project report.

The $888 million Dania Beach Clean Energy Center in Fort Lauderdale, Florida, remains in the planning and permitting stages. Construction could begin in the second half of next year, with completion in 2022. The facility would generate 1,200 MW. Golder Associates Incorporated is consultant. For more information, see Industrial Info's project report.

NextEra reported net income of $2.16 billion for fourth-quarter 2017, compared with $966 million in fourth-quarter 2016.

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