Renewable Giant NextEra: Offshore Wind Is A Poor Investment
By Emokpaire Tijani Agba
American renewable energy giant NextEra (NYSE:NEE) told the CERAWeek energy conference in Houston on Wednesday that offshore wind’s capital intensive nature makes it a poor investment as the world attempts to transition to clean energy.
Citing the costs of installing and maintaining infrastructure, as well as numerous complications with projects of this vast size, CEO John Ketchum told the Houston conference that NextEra-the largest producer of renewable energy in the world-finds it challenging to maintain onshore wind fleets, which are less complicated and less capital intensive than offshore.
“We find it hard enough just to take care of a fleet onshore with some of the issues that we deal with as a company, and we’re best in class,” he said, as reported by Reuters.
Costs associated with offshore wind projects continue to mount due to complicated subsea cable installation and supply chain issues, while extreme weather and salt water corrosion are constant threats to viability.
NextEra’s warnings about the challenges of offshore wind come just weeks after the Biden Administration announced the country’s first U.S. offshore wind energy lease sale in the Gulf of Mexico. More than 300,000 acres of offshore waters would be up for grabs for offshore wind development if the White House proposal moves forward.
In December, the Department of the Interior (DOI) held its first offshore wind lease sale in the Pacific, resulting in over $757 million in winning bids for five lease areas. Offshore wind developments over these lease areas have the potential to power over 1.5 million homes, according to the White House.
NextEra itself continues to power on in the renewables sector, with plans to boost all-renewable power generation capacity to around 70 gigawatts in 2026-up from 25 gigawatts currently.
NextEra saw a 22% increase in revenue in 2022 to some $21 billion, with net income up 16% to $4.15 billion.