Renewable energy ‘cheaper and faster’ than methane, says nation’s largest utility – pv magazine USA

July 31, 2024 John Fitzgerald Weaver

There’s been a lot of talk lately about growing demand for the U.S. power grid, after about two decades of relatively modest growth. Much of that projected growth in demand is being driven by power-hungry AI systems. The conversation about the resources required to power these data stores varies by region; the Southeast is mostly focused on new methane facilities, while Texas is focused on expanding solar, wind, and battery storage, complementing its significant existing gas reserves. California, meanwhile, is actively pursuing new clean energy deals.

In NextEra’s second-quarter earnings call, the company reported its second-best quarter ever for renewable energy, adding more than 3 GW of renewable and storage projects to its project portfolio. Including wind farm upgrades along with new wind, solar and storage projects, the company expects to deploy between 36.5 and 46.5 GW of new capacity between 2024 and 2027.

As the nation’s largest clean energy developer, NextEra generates revenue from methane, pipelines, wind, solar, storage, nuclear and coal, with about half of its revenue coming from fossil fuels. But the company’s strategic discussions indicate a shift toward prioritizing solar and storage over methane to ensure leadership for the next generation.

John Ketchum, president and CEO of the company, said:

This is our second best quarter on record. These results support our belief that most of the growth demand will be met by a combination of renewables and battery storage…we also recognize the realities of new gas-fired power plants, which are more expensive in most states, subject to fuel price volatility, and take a long time to implement, given the need to get gas to the generating unit and the three- to four-year lead time for gas turbines.

The company, known for its meticulous attention to detail and dedicated math department, has been reluctant to offer specific growth forecasts. Some analysts believe the actual growth in electricity demand will be much less pronounced than the headlines suggest. NextEra’s ambiguous statements may also indicate that the company is forecasting more moderate growth rates.

For example, instead of specifying a projected growth, the company said, “NextEra expects energy demand to grow four times faster over the next decades compared to the previous 20 years.” That statement raises questions, particularly about the company’s definition of “next decades” and the baseline of minimal demand growth over the past two decades.

Source: Statista

When it comes to the total amount of renewables that are expected to be deployed, NextEra is a bit more demanding and optimistic. The company highlighted the US Energy Information Administration’s projections that suggest that renewables and storage will be deployed three times faster over the next seven years than in the previous seven years. In addition, NextEra noted that its overall project pipeline has reached 300 GW of capacity, which is an increase of 20% compared to last year’s value of 250 GW.

The company expects to deploy 7.1 GW of solar in 2024-2025, followed by an additional 6.1 GW in 2026-2027. More than a third of that capacity will be deployed in the Southeast, with Florida expected to drive much of that growth. The Midwest region will account for nearly another third of solar deployment over the same period.

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