NextEra Energy, Inc.’s NEE affiliate, Florida Power & Light Company (“FPL”) has chosen two of the nation's premier providers of renewable energy engineering, procurement and construction (“EPC”) services – Blattner Energy and Black & Veatch – to construct its latest solar projects.
Details of the Announcement
FPL selected Blattner Energy to be the EPC contractor for four 74.5-megawatts (“MW”) solar power plants, which are planned to be completed by Dec 31, 2017. The plants include − FPL Coral Farms Solar Energy Center, located in Putnam County; FPL Horizon Solar Energy Center, in Alachua and Putnam Counties; FPL Indian River Solar Energy Center, located in Indian River County; and FPL Wildflower Solar Energy Center, in DeSoto County.
Black & Veatch has been chosen to serve as the EPC contractor for four 74.5 MW solar power plants − FPL Barefoot Bay Solar Energy Center, located in Brevard County; FPL Blue Cypress Solar Energy Center, in Indian River County; FPL Hammock Solar Energy Center, located in Hendry County; and FPL Loggerhead Solar Energy Center, in St. Lucie County. These plants are scheduled to be completed by Mar 1, 2018. Overland Contracting Inc., a Black & Veatch company, will execute the construction work in the above said four sites.
More about the Plants
The eight plants are expected to generate millions of dollars in net savings for FPL customers throughout their operational lifetime. This is expected to be driven by the projected cutback in the use of fossil fuels that will offset the cost to build the plants. The estimated cost of the projects is likely to be $900 million.
Moving ahead, construction on the projects is anticipated to commence this spring. At its peak time, 200 workers will be required by each site that brings the cumulative number of workers to approximately 1,600.
On completion, jointly the new plants are expected to produce sufficient energy to power around 120,000 homes and prevent over 525,000 tons of carbon emissions per annum. In fact, the U.S. Environmental Protection Agency is also of the view that this level of greenhouse gas reduction can be compared to the emissions from over 100,000 vehicles or the carbon seized by over 450,000 acres of forest.
Focus on Clean Energy
FPL has been the forerunner of cost-effective solar expansion in Florida since 2009. Through strategic investments in clean energy, the company strives to improve the efficiency of its system, reduce fuel consumption, lower emissions and cut long-term costs for customers. In fact, the organization claims that the construction of aforementioned plants represent one of the lowest-cost solar plants ever built in the States.
FPL's innovative approach to clean, fuel-efficient generation, which includes phasing out fossil fuel-fired plants, has saved its customers over $8.6 billion in fuel costs and prevented 108 million tons of carbon emissions since 2001.
Notably, the company has already achieved the carbon emissions goal set by the U.S. Environmental Protection Agency's Clean Power Plan for Florida. Moreover, it boasts one of the lowest residential customer bills in the nation.
As of Dec 31, 2016, FPL operated over 335 MW of solar generating capacity.
Utility Industry Outlook
Primarily, three factors — historically low interest rates, public policies that promote the use of cleaner sources of energy and innovative drilling technologies — have led many companies in the utility space to venture into new areas of growth.
However, yesterday’s Federal rate hike, to some extent, has dampened the enthusiasm for traditionally high-yielding utility stocks, as other income-oriented investments, such as bonds, have become more attractive in comparison.
The Fed’s hawkish stance on interest rate hikes, in near future as well, exposes utilities with high valuations and limited growth prospects to major risk.
Coming to solar energy, which constitutes a major growth area in the renewable space, Trump’s victory in the U.S. has clouded the future of solar companies. This has been triggered by the President’s plans to bring back the traditional energy businesses of coal, oil and gas; as he expressed skepticism about global climate change.
Nevertheless, Solar Energy Industries Association expects the U.S. solar market to witness strong growth in 2017, with installations projected to rise to 13.2 GW DC. Although this reflects a decline of 10% from 2016 levels, it is 75% higher than the 2015 levels. Over the long term, it is projected that over 18 GW of solar PV capacity will be installed annually by the end of 2022.
Shares of NextEra Energy gained 12.6% over the past 12 months, outperforming the Zacks categorized Utility – Electric Power industry loss of 1.3%. This outperformance can be attributed to NextEra Energy’s strategy of divesting non-core assets to focus on core areas and deploying the divestment proceeds for acquisitions that are in sync with its long-term growth policy and will strengthen its balance sheet. The stock’s performance is in line with that of DTE Energy DTE, Ameren Corp. AEE and CMS Energy CMS, which also surpassed the industry mark.
NextEra Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Ameren Corporation (AEE): Free Stock Analysis Report
CMS Energy Corporation (CMS): Free Stock Analysis Report
NextEra Energy, Inc. (NEE): Free Stock Analysis Report
DTE Energy Company (DTE): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research