NextEra Energy Inc. is looking to add more gas generation and potentially restart a retired nuclear plant to help meet growing demand from large customers, while still expanding its renewables fleet, executives said Jan. 24.
Subsidiary NextEra Energy Resources LLC is taking initial steps to recommission the Duane Arnold Energy Center (DAEC) nuclear plant in Iowa. The company has filed notice with the US Nuclear Regulatory Commission to request a license change, a first step to restore the facility's operating license and potentially restart plant operations as early as the end of 2028, executives said on the fourth-quarter and full-year 2024 earnings call.
The 679.5-MW nuclear plant, which began operating in 1975, was shut down in 2020 after it was damaged in a storm a few months before its planned retirement. The plant is in good condition and has attracted considerable interest, and though the damaged cooling tower will have to be repaired, it is "run of the mill" work, "so not a whole lot of risk there," NextEra President, CEO and Chairman John Ketchum said.
"We also continue to evaluate alternatives such as [small modular reactors]," Ketchum said. "However, due to the risks and uncertainty, the practical reality is we are unlikely to add multiple gigawatts of new nuclear to the grid over the next decade."
Ketchum said NextEra has embraced the Trump administration's policies emerging through executive orders since President Donald Trump took office Jan. 20.
"We can't afford to take any options off the table," Ketchum said. "We're going to need gas, we're going to need nuclear, we're going to need renewables, we're going to need storage as well. But we can't wait because that demand is here today ... Power demand is higher than it's ever been."
NextEra expects US power demand to increase more than 80% in the next five years and sixfold over the next 20 years. The company plans capital expenditures of $120 billion over the next four years, with 80% going to Republican-led states, Ketchum said.
"The only close analogy you could draw is to the last industrial revolution," Ketchum said.
Partnership for more gas assets
NextEra also announced a framework agreement with GE Vernova Inc. to build gas generation with the "potential to support multiple gigawatts for datacenters, the restoring of manufacturing and the electrification of industry as well as serve investor-owned utilities, municipalities, cooperatives and commercial and industrial customers," Ketchum said.
"Nobody has built more gas-fired generation over the last decade than NextEra Energy," Ketchum said. "And nobody has sold more gas turbines than GE Vernova."
The partnership will allow for more renewables to meet growing power demand, Ketchum said, "by pairing low-cost renewables for energy with gas-fired generation for capacity."
New generation built would be co-owned 50-50, though NextEra may consider a build-own-transfer arrangements in the "right situation," Ketchum said.
The companies plan to collaborate over the next four years to identify locations that would most benefit from the additional generation, particularly to help meet the demand of large-load customers, Ketchum said.
Renewables are ready to meet that demand now, but new gas-fired generation will not be available at scale until 2030, and then only in certain pockets of the US, Ketchum said. He also noted that the cost of new gas-fired resources has "more than doubled" in the past five years.
"The need to add to the country's power infrastructure is no longer in doubt," Ketchum said. "Our industry's mandate is to deliver new generation and capacity solutions at the lowest cost possible in order for the US to achieve the new administration's energy dominance agenda.
"If we don't build new generation to keep up with increasing demand for electricity, power prices are going to go up, or, perhaps worse, new technology or manufacturing load won't be able to connect to the grid, which would slow economic growth and we could miss opportunities to further our leadership in AI."
Renewables
For the third year in a row, NextEra Energy Resources reported its best year ever for origination, adding more than 12 GW of new renewables and battery storage to its backlog, including about 3.3 GW since the third-quarter update in October 2024. Energy Resources has placed into service more than 6 GW of new projects over the last four quarters, the company said in its earnings release. Energy Resources' backlog through 2027 now totals more than 25 GW.
Additions to the backlog increased 30% from 9 GW originated in 2023, and Energy Resources is expected to operate a roughly 75-GW renewables portfolio by the end of 2027, Ketchum said.
Energy Resources had a record year in solar and battery storage origination specifically, deploying more than 3.4 GW, with more than 7.2 GW in the backlog.
Regulated utility subsidiary Florida Power & Light Co. (FPL) commissioned about 2.2 GW of new solar in 2024. FPL expects to add more than 15 GW of solar by 2033.
FPL's growth was driven primarily by continued capital investment totaling about $8.2 billion in 2024, NextEra said in its earnings release. FPL regulatory capital increased 10% in 2024.
The two companies placed into service about 8.7 GW of new renewables and storage projects in 2024, Ketchum said.
NextEra does not expect impacts from Trump's executive order pausing wind power permits, approvals and loans, according to Ketchum, since the company does not have offshore wind exposure and its onshore projects are nearly all sited on private land.
Results
NextEra reported fourth-quarter 2024 adjusted earnings of $1.10 billion, or 53 cents per share, compared to $1.07 billion, or 52 cents per share, in the fourth quarter of 2023. The S&P Capital IQ normalized consensus EPS estimate was 53 cents for the quarter.
For the full year 2024, NextEra reported adjusted earnings of $7.06 billion, or $3.43 per share, compared to $6.44 billion, or $3.17 per share, in 2023, representing a year-over-year growth in adjusted earnings per share of about 8.2%, and at the high end of the company's adjusted EPS expectation range.
The S&P Capital IQ normalized consensus EPS estimate was $3.42 for full-year 2024.
NextEra Energy Resources reported adjusted earnings for the fourth quarter of 2024 of $446 million, or 22 cents per share, compared to $361 million, or 18 cents per share, for fourth-quarter 2023. On a GAAP basis, Energy Resources posted a fourth-quarter 2024 net loss of $442 million, or a loss of 21 cents per share, compared with net income of $885 million, or 43 cents per share, in the prior-year period.
Energy Resources reported full-year adjusted earnings for 2024 of $3.12 billion, or $1.51 per share, compared to $2.76 billion, or $1.36 per share, for 2023.
Lower results were primarily driven by increased interest expense, new debt to finance growth, refinancing of existing debt and decreased contributions from gas infrastructure business.
The company now has $28.5 billion in interest rate hedges in place, NextEra Executive Vice President of Finance and CFO Brian Bolster said.
"To put this all in perspective, NextEra Energy sensitivity for an immediate 50-basis-point upward shift in the yield curve has, on average, one to three cents of expected adjusted EPS impact in 2025, 2026 and 2027, which is equivalent to less than 1% of our adjusted EPS expectations ... assuming we do not implement other cost reductions," Bolster said.
