If you’re anxious about America’s purported slow response to climate change, then you might want to take a close look at NextEra Energy‘s (NYSE: NEE) June investor presentation. Aside from updated numbers, not much stands out in the 235-slide presentation, which includes the usual colorful graphs and charts communicating the latest monthly results for the business’s most important metrics.
But sharp-eyed investors may have noticed a subtle change to one pie chart in particular: the one that predicts how the United States will generate electricity in 2030. NextEra Energy’s latest published projection estimates the mix from renewable energy sources could approach 50%.
That’s up from the 25% share for renewables projected in the company’s May investor presentation, and significantly more optimistic than virtually every other public estimate. Can the latest forecast be taken seriously? If so, what does it mean for investors?
On the one hand, a projection is just that — a projection. It’s also important to note that NextEra Energy wasn’t the original source of either forecast. The pie chart from May’s investor presentation used estimates from IHS and data from 2017, while the slide deck published in June used estimates from the National Renewable Energy Lab (NREL) and data from 2018.
On the other hand, NextEra Energy did choose to switch data sets. Given the significant differences between the two, that probably wasn’t a decision it took lightly. It certainly seems optimistic to expect the United States will generate half of its electricity from renewable sources by 2030.
Then again, if any single company ought to have special insight into the shifts in the nation’s regional power generation situation, it would be NextEra Energy: It produces more electricity from the wind and sun than any other company on the planet. Its power generation subsidiary, NextEra Energy Resources (NEER), operates 17,000 megawatts (17 gigawatts) of wind and solar power assets across the country today. It owns more installed wind power capacity than all but seven countries, and is the fifth-largest capital investor in the United States.
Moreover, NEER has plans to build an additional 29,000 megawatts (and counting) of wind and solar power assets in the coming years. So while NextEra Energy didn’t originate this optimistic forecast, perhaps its business discussions with customers gave it the confidence to publish a radically more ambitious projection than almost any other company.