NextEra Energy's Florida utility plans US record expansion of solar and related battery storage
The 25GW of new capacity through 2033 is more than the next eight largest owners have installed in past decade
Utility Florida Power and Light (FPL) wants to add 25GW of grid-scale solar PV and related battery storage capacity through 2033, more than the next eight largest US owners of those technologies have installed over the past decade.
With this plan, FPL would increase solar mix from 6% of total 2023 generation to 38% in 2033, while battery storage capacity would expand almost 10 times. Nuclear provides 20% of generation and the rest is mainly natural gas. By 2033, nuclear and solar would represent 56% of the power mix.
On 1 April, the utility had 6.44GW of solar capacity in operation across 88 sites and 469MW of storage capacity at three locations.
“FPL’s annual 10-year site plan continues to indicate that solar and storage are the most cost-effective answer for customers to add reliable grid capacity over the next decade,” Kirk Andrews, CFO at FPL parent NextEra Energy, said on a Tuesday earnings call.
The Inflation Reduction Act (IRA), the landmark 2022 climate law, provides lucrative long-term federal tax credits that have made solar PV more cost-effective in some cases for grid-scale power versus conventional and other clean technologies. A game-changer was the IRA making the production tax credit (PTC) available for solar.
FPL calculates that a 75MW array that produces 150,000MWh/yr in 2024 would result in a tax credit of $4.5m with a PTC valued at $30/MWh. This first-year credit would then be extended for nine more years while being adjusted for inflation.
Battery storage technology has continued to advance, and cost of storage is projected to continue to decline over the long-term. This trend is being aided, in part, by a new IRA tax credit for standalone storage.
Before then, storage projects could only claim the investment tax credit (ITC) when installed in connection with a new solar array, which was required to charge at least 80% of the batteries. No grid charging was ITC-eligible.
These operation constraints for storage facilities claiming the ITC, now worth up to a potential 50% of capital investment, limited how batteries could be employed.
FPL CEO Armando Pimentel told analysts the utility – the country’s largest by electricity sales and number of customers – doubled the amount of future storage installations from 2GW a year earlier in the 2024 plan.
“My expectations are that as time goes on that we would likely add more storage to our plans going forward, because it is that attractive in the overall economics,” he said, adding, “Especially as we add solar, which again, continues to be the best proposition from a cost standpoint for our customers.”
Battery storage acts as a key resource to the grid that is both valuable and cost effective for customers, according to FPL, by providing system balancing needs and electricity at any time of the day or weather condition.
With about 469MW of storage in place, FPL has found that batteries help minimize solar curtailment during shoulder load daytime hours. They are also able to ramp up their output much faster than conventional generation, making them effective at meeting load demand as solar generation reduces during evening hours.
FPL serves most of the state’s populous Atlantic coast, the Gulf of Mexico coast south of Tampa Bay, and the western half of the Panhandle region bordering Alabama and Mississippi.
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