The nation’s transition to a clean energy future took another step forward recently when Florida-based NextEra Energy Partners (NEP) announced plans to become a pure-play renewable energy company. In doing so, the subsidiary of energy infrastructure company NextEra Energy will get rid of its natural-gas pipeline assets to focus solely on clean power.
In a May press release, NEP laid out its strategy for moving to a 100% renewable energy model. It first plans to sell its STX Midstream and Meade natural gas pipeline assets in 2023 and 2025, respectively. After those sales close, the excess proceeds will be used to pay down various equity and financing obligations. Other proceeds will be used to finance growth in renewables.
Photo Courtesy NextEra Energy
One reason NEP wants to shed its gas pipelines and focus on clean energy is to unlock greater value in the company, CEO John Ketchum said in the press release.
“We have a terrific track record, but we believe NextEra Energy Partners’ future growth potential is not reflected in its current valuation,” Ketchum said. “We believe this disconnect is driven by a combination of macroeconomic factors and concerns around the equity required to finance the partnership’s convertible equity portfolio financing buyouts.”
“The U.S. economy’s ongoing transition to renewable energy is a significant driver of future renewable energy investments, and we want NextEra Energy Partners to be well positioned to capitalize on these investments,” he continued.
NextEra launched NEP in 2014, focusing on fossil fuels and renewable energy. Its holdings include the STX Midstream natural gas pipeline in Texas and the Meade pipeline in Pennsylvania, “CleanTechnica” reported, adding that those pipeline investments “are now complicating things” for NEP. The shift to 100% renewables lets the company take advantage of massive U.S. government spending on clean energy.
After completing its natural gas pipeline sales, NEP expects to “achieve Real Zero carbon emissions in 2025,” the company said. It also sees a chance to lure “a new class of investors looking for a carbon-free, pure-play option to participate in the energy transition.”
Photo Courtesy CF Industries
While NEP puts its focus on renewables, parent company NextEra has expanded into other sustainable energy markets. In April, NextEra announced a partnership with ammonia producer CF industries to “develop a zero-carbon-intensity hydrogen project” in Oklahoma at CF’s Verdigris Complex.
According to an April press release, the plan is to build a jointly owned 100-megawatt electrolysis plant at the Verdigris Complex. It will be powered by a dedicated 450-MW renewable energy facility developed by NextEra.
Under the agreement, CF would be the “sole offtaker” of 100% of the zero-carbon hydrogen output from the site’s electrolyzers. It would then be used to produce up to 100,000 tons of zero-carbon ammonia per year.
Photo Courtesy NextEra Energy
“CF Industries expects the resulting green ammonia production to support the transition of American agriculture to low- and zero-carbon fertilizers, helping to remove up to 130,000 metric tons of carbon dioxide emissions from the agriculture supply chain each year,” the press release said.
The NextEra-CF project was included in an April funding application submitted to the U.S. Department of Energy (DOE) by the HALO Hydrogen Hub, a tri-state initiative involving Arkansas, Louisiana, and Oklahoma. The press release said the initiative’s goal is “compete for funding” from the DOE’s regional clean hydrogen hub program.
