So, when NextEra says it is excited about an emerging renewable energy technology, investors should take note. Here’s what the company’s management team had to say about their second quarter conference call about a technology they believe could be the key to a zero emissions future.
Get excited about this emerging technology
NextEra CFO Rebecca Kujawa took the lead in the second quarter call. After going through the numbers, she turned to what the company sees ahead. She stated that:
Based on our continued analysis of the long-term potential of low-cost renewables, we remain confident that wind, solar and battery storage will ever significantly disrupt the country’s existing generation fleet, while reducing costs for customers. and helping to achieve future reductions in CO2 emissions. However, to achieve an emissions-free future, we believe that other technologies will be needed and we are particularly excited about the long-term potential of hydrogen.
Most utilities believe that the renewable energy technology currently available (eg wind, solar and battery storage) will not be enough to meet the ambitious goal of zero emissions. For this reason, leaders like Xcel Energy (NYSE: XEL) stated that “we will need new dispatchable carbon-free technologies – technologies that are not yet commercially available at the cost and scale necessary to achieve our aspiration by 2050” to be completely emission-free. For this reason, Xcel and others are investing money in research and development to “ensure that we have these technologies to deploy in the decades to come.” One of the many technologies the industry is looking for is hydrogen, which has NextEra “particularly excited. ”
Plan a pilot program
Kujawa then referred to the company’s first investment in hydrogen. She stated that:
In keeping with the waterfront approach, which we previously used with solar and battery storage, we plan to deliver a hydrogen pilot project to Florida Power & Light (FPL). This is a pilot project of approximately $ 65 million, which, subject to approval by the Florida Public Service Commission, is expected to be in service in 2023. We will use solar power that would otherwise have been cut. to produce 100% green hydrogen for about 20 years. megawatt electrolysis system. The hydrogen will be used to replace part of the natural gas consumed by one of the three gas turbines at the Okeechobee Clean Energy center. We believe the project is a complement to our continued solar energy and battery storage development efforts and highlights FPL’s continued innovative approach to further enhance the diversity of clean energy solutions available to its customers. .
As Kujawa points out, the company plans to invest in a small pilot project at one of its power plants in Florida to test the use of hydrogen as a replacement for some of the natural gas consumed at the Okeechobee Clean Energy Center. . It’s worth noting that the facility, which started in 2019, is already one of the cleanest and most fuel-efficient power plants of its kind. However, if successful, the company could potentially wean the plant off this cleaner fossil fuel by replacing it with zero-emission hydrogen.
Kujawa then noted that the company plans to “continue to assess other potential hydrogen opportunities in our business. And while our short-term investments are expected to be modest in the context of our overall investment program, we are excited about the long-term potential of the technology. , which should further support future demand for low-cost renewable energy, and accelerate the decarbonization of transport fuel and industrial raw materials. ”
The company tends to make several small bets on new technology before scaling up as costs fall. This was the case in the storage of batteries. In 2018, the company’s Pinal Central Solar Energy Center was the first project to combine solar power with an on-site battery storage system. A year later, the company announced plans to build the Manatee Energy Storage Center, the world’s largest solar battery system. If the company’s hydrogen pilot project is successful, it could quickly evolve this technology, just as it did with battery storage.
An exciting project to watch
NextEra Energy is a leader in the renewable energy sector, which is why its enthusiasm to start investing in hydrogen is notable. Although it will take a few years to develop this pilot project, which is far too small to move the needle, it is an important step for the future of zero emissions energy. If this technology is successful, the industry will be one more step towards providing the tools necessary to achieve its ambition to be carbon-free over the next 30 years.