NextEra Energy, operator of the largest natural gas-fired generation fleet in the U.S., has sights set on more power generation opportunities—working in partnership with gas turbine maker GE Vernova.
Targeting large load electricity users such as data centers and big manufacturers, NextEra on Jan. 24 said the two companies plan to develop power generation projects during the next four years utilizing natural gas power plants, renewable energy sources and storage. Their efforts could support development of multiple gigawatts (GW) of power.
“GE Vernova will incorporate its world-class natural gas generation technologies and critical electrification solutions, while leveraging its financial services capabilities,” NextEra Energy CEO John Ketchum said during the company’s earnings call. “NextEra Energy expects to provide customers with integrated renewable, storage, and gas-fired generation solutions for large loads—something we can uniquely deliver with our scale, experience, technology, and unmatched development skills.”
As part of NextEra’s partnership with GE Vernova, the long-term contracted assets would be co-owned 50-50 by the joint venture.
“Can more exposure to data center thesis give shares a spark? Potentially yes,” Jefferies analysts said in a note.
The gas framework agreement announced Jan. 24 takes shape as power demand increases in the U.S. after being stagnate for decades. It also comes as large-scale power users seek out reliable baseload power with lower carbon emissions. While much attention has been given to energy-hungry data centers as drivers of electricity demand growth, Ketchum pointed out that power demand is coming from all sectors.
“Given the current power demand environment, it is more important than ever to unleash all forms of electric generation starting with renewables, which are ready now,” Ketchum said.
Failure to do so and bring new generation online quickly could led to higher power prices, he added.
Renewable energy sources already comprise the bulk of power generation capacity additions in the U.S. The Energy Information Administration on Jan. 24 said it expects 26 GW of solar capacity additions for this year alone and another 22 GW next year.
Ketchum said the company expects load demand to increase 80% during the next five years and sixfold during the next 20 years.
US energy agenda
Speaking on the new Trump administration’s “energy dominance” ambitions, he added all-of-the-above solutions will be needed.
“We can’t afford to take any options off the table. 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,” he told analysts on the call. “But we can’t wait because that demand is here today.”
However, not all generation types are created equal in terms of timing, he added, noting an onshore wind project can be built in 12 months, a storage facility in 15 months and a solar project in 18 months.
NextEra executives have spent a lot of time in Washington on advocacy concerning the Inflation Reduction Act, Ketchum said, adding members of Congress understand electrons are needed now.
“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 [artificial intelligence],” he said.
Nuclear restart
Nuclear is also part of NextEra’s all-of-the-above energy strategy, though it sees nuclear as a longer-term option compared to renewables. The company continues to progress toward the recommissioning of its Duane Arnold nuclear plant in Iowa.
The approximately 600-megawatt nuclear plant closed in 2020 after its last customer, Alliant Energy, accepted a buyout, turning to wind, and a derecho damaged the plant’s cooling towers. The plant had operated for 45 years.
The plant is in good shape, Ketchum told analysts.
“Recently, we filed notice with the Nuclear Regulatory Commission to request a licensing change – an important first step in establishing the regulatory pathway to restore the facility’s Operating License and potentially restart plant operations as early as the end of 2028,” Ketchum said.
NextEra is involved in active discussions with customers and the plant has drawn a lot of interest, he added.
The company is also evaluating small modular reactors, though Ketchum said the first-of-a-kind, next-decade technology has some uncertainty and a longer development timeframe.
Quarterly highlights
NextEra reported a dip in fourth-quarter profit, dropping to $1.203 billion compared to $1.210 billion a year earlier.
For the year, NextEra reported profit of $6.95 billion, or $3.37 per share, down from $7.31 billion in 2023.
The company’s renewable energy unit, NextEra Energy Resources, marked a record year of new renewables and storage origination. It added more than 12 GW to the company’s backlog in 2024, up 30% from 2023. Energy Resources also commissioned more than 2.2 GW of new solar in 2024. Its renewables backlog now stands at more than 25 GW.
Energy Resources reported a fourth-quarter 2024 earnings of $446 million, up from $361 million.
The company’s limited partnership, NextEra Energy Partners, also announced Jan. 23 it would change its name to XPLR Infrastructure LP. Plans are for the company start trading Feb. 3 under the ticker symbol XIFR on the New York Stock Exchange. “We see the name change and rebrand part of NEE’s [NextEra’s] effort to distance the company from the vehicle ahead of the widely expected distribution cut,” Jefferies analysts said in the note.
XPLR Infrastructure is scheduled to report its fourth-quarter 2024 and full-year earnings on Jan. 28.
