NextEra to Swap Gas Pipelines for Renewables and Green Hydrogen

by Janet Wood (WindPower Monthly) Florida-headquartered NextEra Energy Partners has announced plans to divest its natural gas pipeline assets in order to invest up to $20 billion in green hydrogen and renewable energy. READ MORE

Excerpt from Clean Technica: A web of financial transactions stands between NEP and its pipeline-free goal, but the company believes that achieving pure-play status for its renewable energy business will be well worth the effort.

“The partnership believes these changes could potentially invite a new class of investors looking for a carbon-free, pure-play option to participate in the energy transition,” NEP stated in a press release dated May 8.

Pure-play refers to companies that focus on a specific business activity. With NEP as a pure-play renewable energy developer, investors who are on the prowl for clean power opportunities can put their money on NEP without having to calculate fossil energy assets into their environmental investing profile.

That’s a mighty attractive carrot these days. Despite the anti-ESG rhetoric bandied about by partisan office holders in the US (more on that in a second), leading businesses here and elsewhere around the globe continue to align with the corporate ESG (environmental, social, governance) movement. ESG guidelines are widely recognized as risk management tools for businesses to cope with 21st century challenges rather than floundering around in the 20th century. That’s why the environmental leg of the ESG stool leans heavily on renewable energy.

NextEra Energy Plunges Into Green Hydrogen Pool

NextEra Energy’s interest in green hydrogen could provide NEP with an additional demand platform for its renewable energy plans. Green (aka renewable) hydrogen can be produced from water with electrolysis systems powered by wind or solar power, which is right up the NEP alley.

NextEra sketched out its green hydrogen plans last summer, with the aim of decarbonizing its fleet of fossil natural gas power plants. That may seem like a far-off dream, considering that green hydrogen is a relatively new fuel and suppliers are playing catch-up. However, the transition to green hydrogen is already under way. Leading turbine manufacturers like Mitsubishi introducing gas turbines that are engineered to handle more green hydrogen on an incremental basis as the supply chain ramps up to 100%.

More Green Hydrogen For The Fertilizer Industry

NextEra has also set the green hydrogen wheels in motion for another leading user of hydrogen, the agriculture industry. Green hydrogen can be combined with ambient nitrogen from the air to produce green ammonia, which is then used to make ammonia fertilizer. Without the green hydrogen angle, the primary feedstock for ammonia is fossil gas.

The green ammonia trend is supported by federal policy. In 2020, for example, the US Department of Energy launched a program aimed at using green ammonia as a hydrogen carrier, to help release a bottleneck in the hydrogen distribution chain.

Leading ammonia producers are catching on. In 2021, CF Industries announced that it would introduce a green ammonia system to its plant in Donaldson, Louisiana.

As if on cue, in April NextEra Energy and CF Industries Holdings announced a green hydrogen project to be launched at CF’s Industries’ Verdigris Complex in Oklahoma.

The two companies note that the proposed project is part of the HALO Hydrogen Hub proposal launched by Arkansas, Louisiana and Oklahoma. If all goes according to plan, HALO will win a slice of an $8 billion Energy Department funding pot that aims to establish a network of regional hydrogen hubs around the US.

Funding for the Energy Department initiative comes from the Bipartisan Infrastructure Law, which stipulates a carve-out for fossil energy. However, the main focus is on renewable sources.

Who’s Afraid Of The ESG, Part Deux

Republican governors and attorneys general in about two dozen US states have been peppering the media with anti-ESG rhetoric over the past year or so. That’s kind of funny, because in some cases their own economic development agencies have poured millions into attracting manufacturers that will spread new clean technologies far and wide. Kentucky is one standout example. If you can spot others, drop us a note in the comment thread.

The irony is especially delicious when the state in question is Florida, where Republican Governor Ron DeSantis recently signed an anti-ESG bill into law.

As reported by The Wall Street Journal, the corporate parent of NEP is eyeballing the potential for investments in green hydrogen totaling $20 billion, leveraging the favorable winds of the federal Inflation Reduction Act. READ MORE