NextEra Energy Resources, a subsidiary of NextEra Energy (NEE), has revealed plans to build nearly 700 MW of fully-contracted battery storage projects in California before the end of 2022- with a capital investment of nearly $800 million.
This development could nearly double the total installed capacity of battery storage in the US available today (approximately 1,350 MWs).
“California needs significant investment in battery storage to meet its aggressive clean energy goals,” said NextEra Energy Resources CEO John Ketchum, noting that the California Public Utility Commission has now approved all 523 MW of the projects.
“Once these projects are operational by the end of 2022, Californians will benefit from more low-cost, emission-free solar energy during more hours of the day, as well as improved reliability across the regional electric grid” Ketchum added.
The battery storage projects will be co-located at six existing NextEra Energy Resources solar projects and include the previously announced 63 MW at Blythe 110 Solar Energy Center, 115 MW at Blythe II Solar Energy Center and 230 MW at the McCoy Solar Energy Center.
In addition, NextEra Energy Resources has a current pipeline of nearly 2,000 MW of shovel-ready or near shovel-ready battery energy storage projects in California.
The company says the build out of this 2,000 MW energy storage pipeline is contingent on obtaining long-term power purchase agreements for the projects as well as the necessary regulatory approvals.
Shares in NextEra are currently trading up 15% year-to-date, and the stock scores a cautiously optimistic Moderate Buy analyst consensus. That’s with 4 recent buy ratings offset by 4 hold ratings. Meanwhile the average analyst price target of $287 indicates marginal upside potential from current levels.
RBC Capital’s Shelby Tucker reiterated his buy rating on the stock, while boosting his price target from $292 to $297, after Next Era reported a solid 2Q20 EPS beat.
“At the utilities, strong performance at FPL offset the slight decline in earnings at Gulf. At NEER, growth from New and Existing Investment more than offset the drag from Customer Supply & Trading” wrote Tucker. (See NEE stock analysis on TipRanks)
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