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NextEra Execs Not Seeing Supply Chain Crunch

Oct. 20, 2021
The Florida-based company added more than 2,100 MW to its renewables backlog during the third quarter

Leaders of NextEra Energy, the world's largest wind and solar energy producer, said Wednesday they aren’t yet seeing snarls in the supply chain hurt their development plans.

Speaking to analysts and investors on the heels of NextEra’s better-than-expected third-quarter earnings report, CFO Rebecca Kujawa said higher input costs from supply bottlenecks – which are causing delays in some large construction and manufacturing projects – haven’t affected the company’s timeline for building new renewable capacity. Some planned elements in NextEra’s portfolio have moved around a bit, she added, but not beyond management’s expectations for such ebbs and flows.

“We’re not having anything notable from a buyer perspective,” Kujawa said, adding that she sees NextEra as being “very well positioned” to execute on development plans for the rest of this year and in 2022. Beyond that, she said, the outlook naturally gets a bit more cloudy.

That bodes well for Kujawa, Chairman and CEO Jim Robo and their NextEra Energy Resources renewables and storage division, which in the third quarter posted record origination numbers. The group added about 2,160 megawatts – more than half of it in wind – to its backlog, which finished September at more than 18,000 MW.

Two other thoughts from Wednesday’s conference call:

• Asked for her thoughts on the timeline for green hydrogen to be competitive in the power market, Kujawa said NextEra is thinking that will be late this decade and into the 2030s. A big element of that, she added, is that production will become cheaper as renewable inputs gain share. The NextEra team also is eyeing Washington, D.C., to see if a hydrogen production tax credit will make it into the reconciliation bills being negotiated. That, she said, will help green hydrogen close the cost gap with hydrogen derived from natural gas.

• Looking to build out its portfolio and link to other renewable energy efforts with industrial customers, NextEra is working on the acquisition of a small water utility in the Houston area as well as a water reuse and reclamation project. Combined, those plans call for NextEra to invest $45 million – not a big deal for a company with an annual capex budget of about $15 billion – but Kujawa said the company plans to grow the water business in Texas and elsewhere by buying small privately owned and municipal utilities elsewhere.

“I expect us to be active,” she said. “We’ll build it over time.”

Shares of NextEra (Ticker: NEE) were up nearly 3 percent midday Wednesday, growing the company’s market capitalization to about $165 billion. Year to date, they are up slightly.

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