uploads///Fuel Mix

NextEra takes commanding lead in green power

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Nov. 27 2019, Updated 7:24 p.m. ET

NextEra’s generation capacity

As of December 30, 2013, most of NextEra Energy’s (NEE) 44,000 MW (megawatt) capacity consisted of natural gas, nuclear, and wind power plants. These power sources make up 95% of NextEra’s total generation capacity. Coal, solar, oil, and hydro make up the rest.

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Capacity by segment

NextEra’s generation capacity is shared between its two principal subsidiaries, Florida Power & Light Company, or FPL, and NextEra Energy Resources, or NEER. FPL is the regulated utility subsidiary of NextEra, and it owns more than 25,500 MW of capacity. The unregulated operations headed by NEER, meanwhile, totals 18,200 MW of capacity.

Natural gas is FPL’s dominant source of electricity generation. Nearly 67% of FPL’s capacity is based on natural gas-fired power plants. NEER, on the other hand, has high exposure to wind energy. Wind energy constitutes more than 10,200 MW, or 56%, of NEER’s total generation capacity.

Business advantage

Interestingly, unlike most of the power producers in the US, coal-based power forms a very small percentage of NextEra’s capacity. Coal-fired power plants contribute only 3% toward NextEra’s total generation capacity.

At a time when environmental agencies are issuing strict emissions standards and penalizing coal power plants over elevated levels of pollution, the company’s low exposure to coal-based capacity is an advantage. Coal-heavy power producers in the US include American Electric Power Company (AEP), First Energy (FE), and Ameren Corp. (AEE).

All of these companies are part of the Select Sector Utilities Select Sector SPDR Fund (XLU).

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