NextEra Energy is getting ready for storage ‘revolution’

Source: Kristi E. Swartz, E&E News reporter • Posted: Friday, July 27, 2018

NextEra Energy Inc. continues to emphasize storage as part of its energy portfolio, with executives referring to it as “the next phase of renewables deployment.”

NextEra’s robust renewable energy unit added 90 megawatts of battery storage projects to a backlog during the second quarter, executives said yesterday. The company is so confident in an expanding storage market that at least 300 MW of solar projects signed for post-2020 will be paired with 75 MW of battery storage.

“We’re right at the beginning of, I think, a real revolution in this country in terms of how electricity is, how storage interacts with electricity on the grid, and how we’re going to start delivering much different, firm, renewable products to our customers going forward,” said NextEra Energy CEO Jim Robo, during the company’s second-quarter earnings conference call with analysts.

Many electric utilities nationwide are studying or deploying storage in some way, mostly in the form of pilot projects. Already the world’s largest renewable energy developer, NextEra Energy has made storage development a priority going forward.

Because solar and wind are intermittent, they aren’t guaranteed to be available for transmission at a given time. Adding storage changes the scenario.

Robo told analysts that roughly four hours of battery storage is enough to make a solar or wind project look a lot like a peaker generating plant, which electric companies deploy when demand is high.

The development is critical when it comes to cost; traditional peaker plants are usually older, less efficient and more expensive to operate.

“I guess we get surprised just by how cheap storage is becoming,” said Stephen Byrd, an analyst with Morgan Stanley Co., asking executives whether they think costs will continue to drop.

NextEra Chief Financial Officer John Ketchum said the company expects falling costs and improving technology, which will expand NextEra’s business opportunities.

As costs decline in the next decade, batteries combined with solar and wind will be cheaper than the operating costs of traditional inefficient generation resources, he said. NextEra expects that to happen over the next 10 years, he said.

NextEra continued to add more wind and solar projects to its portfolio during the second quarter, ending June 30. The backlog of projects is now so great at 7,400 MW, it is nearly two times larger than the company has had at any time before the end of 2016, Ketchum said.

“Our future wind, solar and storage development program has never been strong,” he said.

Analysts asked whether the company would continue to find new areas to develop utility scale solar. Executives said yes, but Robo emphasized that it is not backing away from wind development.

“The fact is we’re going to build, we’re going to originate, and we’re going to build a heck of a lot more wind now through the end of the decade, through the end of 2020, than on the solar side,” he said.

That’s because wind energy continues to be cheaper than solar in much of the Midwest, he said, and it is considered a staple product when it comes to low-cost energy.