Renewable energy demand will triple over the next seven years as data center growth accelerates to facilitate the proliferation of artificial intelligence,\u00a0NextEra Energy\u00a0CEO John Ketchum said Wednesday.<\/p>\n
NextEra added 3,000 megawatts of renewable and storage projects to its order backlog in the second quarter. Of those, 860 megawatts \u2014 or 28% \u2014 come from agreements with Google to power the tech company\u2019s data centers.<\/p>\n
\u201cThis marks our second best origination quarter ever,\u201d Ketchum told analysts on the company\u2019s earnings call Wednesday. \u201cThese results support our belief that the bulk of the growth demand will be met by a combination of renewables and battery storage.\u201d<\/p>\n
NextEra\u2019s business with tech and data center customers currently stands at seven gigawatts of renewable assets in operation and in backlog, said Brian Bolster, NextEra\u2019s chief financial officer.<\/p>\n
NextEra stock was up 3.5% in early afternoon trading. It is the largest power company in the S&P utilities sector by market capitalization and operates the largest renewable portfolio in the U.S.<\/p>\n
Shares have gained 24% year to date and 12% over the last three months, as investor enthusiasm over the company\u2019s position to meet growing U.S. power demand.<\/p>\n
NextEra expects power demand to grow four times faster over the next decades compared to the prior 20 years on demand from data center, manufacturing and the electrification of the economy, Ketchum said.<\/p>\n
Consulting firm Rystad Energy recently forecast that data centers and the adoption of electric vehicles alone will result in additional 290 terawatt hours of electricity demand in the U.S. by 2030. That\u2019s equivalent to the entire power demand of Turkey, according to Rystad.<\/p>\n
Executives at some of the biggest utilities in the U.S. have warned that\u00a0failure to meet this demand\u00a0will jeopardize the nation\u2019s economic growth. Rebecca Kujawa, CEO of NextEra Energy Resources, a subsidiary NextEra Energy, said it will take time to nail down concrete numbers on exactly how much demand is coming from data centers in particular.<\/p>\n
\u201cBut there is no escaping the fact that these are very large numbers and numbers that I don\u2019t think any utility across the industry has seen before,\u201d Kujawa said Wednesday. \u201cFrom a practical standpoint, it\u2019s going to take a couple of years for this really to materialize and utilities to be able to absorb it and serve it.\u201d<\/p>\n
Natural gas\u00a0is also expected to play a key role in meeting power demand, though there is an ongoing debate about how the power mix will break down between gas and renewables. Producers and pipeline operators have argued that renewables, which are dependent on sun and wind conditions, will need gas as backup to ensure reliable power.<\/p>\n
Alan Armstrong, CEO of pipeline operator\u00a0Williams Companies, told CNBC last week the U.S. risks\u00a0falling behind in the AI race\u00a0if it doesn\u2019t embrace natural gas as a power source.<\/p>\n
Ketchum said natural gas has an important role to play as a bridge fuel during the energy transition. NextEra owns and operates a natural gas fleet in Florida. But the CEO said renewables come at a lower cost and are faster to deploy.<\/p>\n
Building new natural gas generation is \u201cmore expensive in most states, is subject to fuel price volatility, and takes considerable time to deploy given the need to get gas delivered to the generating unit and the three- to four-year waiting period for gas turbines,\u201d Ketchum said.<\/p>\n
With power demand expected to surge, there is growing interest in nuclear energy as a source of reliable, carbon free energy. Ketchum indicated Wednesday that NextEra is considering restarting the Duane Arnold nuclear plant in Palo, Iowa, though it would require a thorough assessment. The plant ceased operations in 2020.<\/p>\n
\u201cWe would only do it if we could do it in a way that is is essentially risk free with plenty of mitigants around the approach,\u201d Ketchum said Wednesday. \u201cThere are a few things that we would have to work through but yes \u2014 we are we are looking at it.\u201d<\/p>\n
NextEra is rated as a buy equivalent by 70% of Wall Street analysts, with an average price target of $79.12 per share, suggesting nearly 10% upside from Tuesday\u2019s close of $72.11.<\/p>\n<\/p>\n
Renewable energy demand will triple over the next seven years as data center growth accelerates to facilitate the proliferation of artificial intelligence,\u00a0NextEra Energy\u00a0CEO John Ketchum said Wednesday. NextEra added 3,000 megawatts of renewable and storage projects to its order backlog in the second quarter. Of those, 860 megawatts \u2014 or 28% \u2014 come from agreements […]<\/p>\n","protected":false},"author":0,"featured_media":6710,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-6709","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/6709","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=6709"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/6709\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/6710"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=6709"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=6709"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=6709"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}