Nextera Energy

NextEra Energy plans to reduce its scope 1 emissions intensity by 67% by 2025 compared with 2005. While NextEra is on track to achieve its target, the company should increase by a factor 1.4 its targeted scope 1 and 2 emissions reductions in order to align with its 1.5°C pathway. Further, it should aim to be carbon neutral by 2035 as this is the expectation for electric utility companies with assets in advanced economies. NextEra Energy is also lacking long-term GHG reductions goals which are crucial to maintain alignment with the Paris goals over time.

NextEra Energy’s research and development (R&D) investments are focused on renewable energy solutions, leading-edge battery storage systems and smart grid technology. The company is investing in developing wind turbines with larger rotors and new power trains and also bifacial solar panels which generate solar when the sun hits either side of the panel. However, the company performed poorly on intangible investments as it does not disclose sufficient financial details on mitigation R&D expenditure.

NextEra reduced its scope 1 and 2 emissions intensity from 249 gCO2e/kWh in 2015 to 199 gCO2e/kWh in 2020. However, this only represents about half the rate required by its 1.5°C pathway between 2020 and 2025. The company is also projected to exceed its carbon budget to 2035 by 40%. To remain within its carbon budget, NextEra could decrease its reliance on gas and focus on expanding its nuclear, solar and wind generation which accounts for around 50% in the company’s generation mix in 2020. NextEra plans to support its low-carbon generation expansion through storage projects and aims for a total of 1.2 GW of battery storage by 2030.

NextEra has improved its performance on climate governance. Climate change risks and emissions reductions targets are now part of the company’s formal annual reports and the company has implemented climate scenario analysis. Results of the scenario analysis supported NextEra’s plan to construct approximately 23 – 30 GW of long-term contracted renewables projects between 2021 and 2024. These reinforce NextEra’s credibility and strategic commitments on low-carbon transition. However, the company could still improve its performance by embedding climate and low-carbon transition skills within its board of directors.

NextEra plans to reduce its scope 1 emissions intensity by 67% by 2025 compared with 2005. NextEra also announced its ’30-by-30’ plan in 2019 which aims at installing 30 million solar panels in Florida by 2030 to reach approximately 11.7 GW of installed solar capacity on FPL’s system.

In 2020, the company began replacing old oil, natural gas and coal plants with more efficient natural gas units. In 2020, it closed the 330 MW Indiantown coal plant and converted the 924 MW Crist coal plant to natural gas. Three of its last four remaining coal plants will be closed by January 2024.

In 2020, NextEra invested 82% of its capital expenditure (CapEx) in low-carbon generation and plans to maintain this share until 2022. However, the company will remain reliant on gas with 73% of FPL’s capacity mix coming from natural gas in 2020 and plans for around 60% in 2030.

Between 2015 and 2020, NextEra’s scope 1 and 2 emissions intensity decreased by around 20% due to the closure and reconversion to natural gas of its coal plants. However, this rate of decrease is only half of what is required by NextEra’s 1.5°C pathway.

NextEra is now embedding decarbonization in its strategic plans but remains reliant on gas in its generation portfolio until at least 2030. The company could strengthen its consistency by focusing on replacing gas generation with low-carbon sources or developing electricity production from renewables gases.