Despite all the doom-and-gloom headlines about climate change, theres actually plenty of room for optimism. Consider that the United States has cut total annual emissions by 862 million tons on a carbon dioxide equivalent basis since 2005. Thats a 15% reduction, and more than the entire annual output of Germany.
The trend should accelerate in the near future. The National Renewable Energy Laboratory (NREL) projects that the U.S. could boast over 500,000 megawatts of installed wind and solar power capacity by 2030. That could generate 40% of the nations total electricity and result in a compound annual growth rate of 15% for wind and solar electricity generation from 2018 to 2030.
That also suggests that NextEra Energy Partners (NYSE:NEP) has a solid growth runway if the business can maintain enough financial flexibility to take advantage of this expansion.
Image source: Getty Images.A significant long-term growth opportunity awaitsNextEra Energy Partners was created by NextEra Energy (NYSE:NEE), which is the largest publicly traded utility in the world by market cap.
Well, technically, it isnt a pure utility. While NextEra Energy operates electric utilities in Florida (read: companies that sell electricity to end users) , it also derives a significant amount of revenue and income from its power generation business (read: a company that sells electricity to utilities).
NextEra Energy Resources (NEER) builds, operates, and sells wind and solar power assets across the United States. Its one of the largest capital investors in the country, generates more electricity from the wind and sun than any other company on the planet, and owns more installed wind power capacity -- 15,000 megawatts -- than all but seven countries.
The leadership position of NEER has helped NextEra Energy Partners to assemble its own portfolio of wind and solar power assets across the U.S. The partnership has acquired most of its current 5,330-megawatt portfolio, including nearly 2,000 megawatts since 2018, from the power generation arm of the parent.
While NextEra Energy Partners hasnt outlined specific growth expectations in terms of power capacity, the company and its parent have been outlining Americas incredible renewable energy growth potential in recent investor meetings. Consider how NextEra Energy sees the market developing through the next decade: PeriodAverage Annual Capacity Additions, Wind PowerAverage Annual Capacity Additions, Solar Power2019 to 2022~10,000 megawatts~10,000 megawatts2023 to 203012,000 megawatts to 15,000 megawatts18,000 megawatts to 20,000 megawattsData source: NextEra Energy investor presentation.
For comparison, the United States exited 2018 with roughly 96,000 megawatts of installed wind power capacity and 62,000 megawatts of installed solar capacity. The nation could boast 500,000 megawatts of combined wind and solar power capacity by 2030. That sets up a clear growth runway for NEER and, by extension, NextEra Energy Partners.
. The power generation.....