NextEra Energy Resources LLC had its best year ever for origination in 2021, adding about 7,200 MW of new renewable and battery storage projects to the company's backlog, executives said Jan. 25 on a conference call to discuss fourth-quarter and full-year results.
NextEra also commissioned about 3,800 MW of wind, solar and storage projects in 2021. The company added about 1,500 MW of renewable projects to its backlog since its third-quarter earnings call, including 700 MW of new wind and wind repowerings, 300 MW of solar and 500 MW of battery storage.
The company's renewables backlog now stands at more than 16,600 MW, roughly the size of its entire renewable generation portfolio at the end of 2017, executive Rebecca Kujawa said, and nearly 25% larger than the backlog at the end of 2020.
Kujawa, NextEra Energy Inc.'s executive vice president for finance and CFO, is moving into a position as president and CEO of NextEra Energy Resources. The announcement was among a slate of leadership moves that include John Ketchum, president and CEO of NextEra Energy Resources, succeeding Jim Robo as NextEra Energy's president and CEO, effective March 1.
"We have an extremely deep bench with a ton of experience," Robo said.
Management also identified a new area of growth for NextEra by building out its analytics team, which the company expects to drive operational efficiencies in its existing fleet and use internal data to develop software solutions for customers. The company recently announced an agreement with JP Morgan Chase to use NextEra's Optos software to optimize energy use and reduce its carbon footprint.
The software uses artificial intelligence and blockchain technology, leveraging NextEra's fleet data to match energy demand with clean energy resources available on the market in real time, among other features, Kujawa said. The company recently signed a similar agreement with a large university to use the software to manage and optimize a more than 100-MW solar and storage facility in California.
"That is a huge leg-up that we have over the rest of the industry and one of the things that we're looking at," Robo said.
NextEra is working to provide additional services to help customers manage generation and load needs, weigh carbon intensity and deliver on environmental, social and governance goals, which could lead to more renewable deployments over time, Kujawa said.
"We've seen the opportunity to continue these investments [and] think about how we package and sell them to customers," Kujawa said. "You'll see a lot more of that from us going forward."
Build Back Better 'an accelerator'
NextEra executives are not hanging any plans on the Biden administration's $1.75 trillion Build Back Better, or BBB, legislation package passing in 2022, though they remain optimistic.
"We don't need BBB to deliver on the expectations we've just laid out," Robo said on the earnings call. "I think about BBB as an accelerator, not as something that we need." He added that NextEra does expect the clean energy component of the legislation to come up for a vote in 2022, though likely not until after the election during the fourth quarter.
The company's plans also do not hinge on any potential new federal incentives in the proposed legislation or otherwise, Kujawa said. Should the legislation pass, Kujawa said, the company is optimistic that a hydrogen incentive would be included that could benefit NextEra's plans.
Outlook
On an adjusted basis, NextEra Energy's full-year 2021 earnings were $5.02 billion, or $2.55 per share, compared to $4.55 billion, or $2.31 per share, in 2020, up about 10.4%, according to the company's Jan. 25 announcement. For the fourth quarter of 2021, NextEra reported adjusted earnings of $814 million, or 41 cents per share, compared with $785 million, or 40 cents per share, in 2020.
On the regulated side, Florida Power & Light Co. contributed EPS of $1.49 in 2021, compared with $1.35 in 2020, and Gulf Power Co. generated EPS of 14 cents in 2021, up from 12 cents in 2020. NextEra Energy Resources generated net income for 2021 of $599 million, or 30 cents per share, compared with $531 million, or 27 cents per share, in 2020.
NextEra also increased earnings guidance for 2022 and 2023. For 2022, the company expects adjusted earnings per share of $2.75 to $2.85, up from $2.55 to $2.75.
For 2023, the company's expected adjusted EPS is $2.93 to $3.08, up from $2.77 to $2.97. The new adjusted EPS expectations are $3.13 to $3.33 for 2024 and $3.35 to $3.60 for 2025.
