NextEra (NEE) Unit Launches Unique Energy Storage Project

NextEra Energy, Inc.’s (NYSE:NEE) unit, Florida Power & Light company (“FPL”) announced that it will launch an innovative energy storage pilot project. The project is aimed to strengthen the electric grid by testing various applications of advanced battery technologies under real-life conditions. It is an extension of FPL's clean energy research program.

Details of the Project

FPL will install various types of battery systems in the densely populated regions of Miami-Dade as well as the isolated areas of Monroe county in southern Florida in an effort to study the potential benefits of energy storage, including grid reliability and power quality. FPL expects to begin construction of the project this summer, with most components anticipated to commence operation by the year end.

The pilot project is expected to facilitate grid management, promote clean energy and generate savings on electricity bills. Notably, FPL is one of the largest clean energy providers in the U.S. and the company boasts the lowest residential utility bills in the state which is also 30% below the national average.

NEXTERA ENERGY Price

Advantages of Battery Storage

Increasing global population has been spurring demand for energy and renewable energy is gaining popularity because of its environment-friendly nature. This has resulted in cleaner sources of energy gaining a larger share of the generation mix at utility companies gradually.

Per a U.S. Energy Information Administration report ("EIA"), the total share of renewable energy in electricity generation mix will increase 13% in 2016 and 3.3% in 2017. With growing adoption of renewable energy came the need for modernization initiatives likebattery storage technologies.

Storage technology is gaining importance because of their ability to store energy chemically. Moreover, such devices can be installed almost everywhere as well as at the grid level to provide power backup. Thus, apart from ensuring greater system reliability, the technology also allows greater utilization of renewable energy by customers.

Clean Energy Initiative

The ongoing economic recovery in Florida is helping FPL to expand its customer base consistently. To cope with growing demand and maintain service reliability, the company continues to increase its scale of operations and is focused on upgrading its infrastructure. In addition, its efforts on expanding its renewable fleet are commendable and should drive growth, going forward.

Per the EIA, solar energy is expected to constitute only 1.2% of the total U.S. utility-scale generation in 2017, indicating immense room for growth. To reap the benefits, FPL is expanding its solar generation capacity to serve its customer base of 4.8 million better. In Feb 2016, FPL began the construction of three solar energy centers, each with capacity of 74.5 megawatts (MW), which are scheduled for completion in 2016 end. Once completed, these plants will nearly triple FPL's solar capacity apart from improving its overall generation mix.

Backed by its unwavering focus on clean energy and infrastructural upgrades, NextEraEnergyhas already achieved the Environment Protection Agency’s ("EPA") Clean Power Plan’s emission decline target set for 2030.

Zacks Rank & Key Picks

NextEra Energy currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the same space include Spark Energy, Inc. (NASDAQ:SPKE) , Avangrid, Inc. (NYSE:AGR) and Black Hills Corporation (NYSE:BKH) . While both Spark Energy and Avangrid sport a Zacks Rank #1 (Strong Buy), Black Hills Corporation has a Zacks Rank #2 (Buy).