NextEra backs Biden’s clean energy push as renewables power profit

Source: By Reuters • Posted: Sunday, April 25, 2021

A wind farm shares space with corn fields the day before the Iowa caucuses, where agriculture and clean energy are key issues, in Latimer, Iowa, U.S. February 2, 2020. REUTERS/Jonathan Ernst/File Photo

NextEra Energy Inc (NEE.N) will back the U.S. government’s push for utilities to tap carbon-free sources, the country’s most valuable electricity provider said as capacity growth in renewable energy pushed its quarterly profit above expectations.

A clean energy standard would put the country on course to deliver on President Joe Biden’s campaign promise to decarbonize the power sector by 2035, an aggressive goal that U.S. utilities have supported thanks to the low cost of renewables like wind and solar. read more

However, there are some concerns on whether the firms would be able to meet the tight deadline, according to utilities trade group Edison Electric Institute.

Against this backdrop, the support of NextEra, the world’s largest solar and wind energy provider, is seen as important for the administration.

Top company executives said on a post-earnings call that it has backed the extension of existing renewable tax credits and new transmission and storage incentives, items that were included in the White House’s $2 trillion infrastructure plan.

“We have been encouraged by the Biden administration’s focus on clean energy and the emphasis they have placed on it in their budget and in the upcoming infrastructure package,” Chief Financial Officer Rebecca Kujawa said.

Analysts expect NextEra to be one of the top beneficiaries of Biden’s plan to modernize the nation’s infrastructure, which includes billions of dollars to boost the market for renewable power and advanced clean energy technologies, while stripping away subsidies for fossil fuels.

The plan delivers a key win for wind and solar project developers with a proposal to extend the industry’s tax credits by a decade, far longer than the typical one to five year timeline the subsidies have enjoyed.

NextEra Chief Executive Jim Robo said he was not worried about any corporate tax rate hike from the new infrastructure bill, as the proposed legislation is “very positive from a renewable standpoint”.

“We are excited to work with the administration on the plan that I think is really going to accelerate the decarbonization of the U.S. economy over the next several years,” Robo said.

Though NextEra remains one of the few large utilities in the United States to not detail a net-zero emissions target, the company said on Wednesday its Florida-focused electricity unit will produce 40% energy from zero-emission sources by 2030.

NextEra, which last year briefly became the most valued U.S. energy company when it overtook Exxon Mobil Corp (XOM.N) during the crude market downturn, posted adjusted earnings of 67 cents per share for the first quarter.

Analysts expected it to earn 59 cents, according to Refintiv IBES.

The company said its clean energy business, Nextera Resources, added about 1,750 megawatts of contracted renewables and storage to its backlog in the quarter, bringing the total to 15,250 megawatts.

The unit’s adjusted earnings grew 13% to $598 million, almost half of NextEra’s total profit.

The company also kept unchanged its 2021 adjusted earnings forecast and long-term financial expectations, targeting profit per share of $2.40 to $2.54 and up to 8% growth in the next two years.