This special interest group is for professionals to connect and discuss all types of carbon-free power alternatives, including nuclear, renewable, tidal and more.


Wind and solar producer tops Exxon as most valuable U.S. energy company

Al Karaki's picture
CEO and Founder, 4iAfrica - Insight, Implementation, Innovation, Impact

Experienced project manager, visionary, social innovator and serial entrepreneur who insights, innovates and implements large scale projects for governments, the private sector and civil society...

  • Member since 2020
  • 35 items added with 15,183 views
  • Oct 9, 2020

It's a milestone for renewable energy in the U.S.: A solar and wind power provider topped ExxonMobil as America's most valuable energy company.

NextEra Energy, based in Juno Beach, Florida, eclipsed Exxon this week when its value hit $143.8 billion, edging out the fossil-fuel giant. After the close of trading on Wednesday, NextEra was worth $900 million more that Exxon and about $2 billion more than Chevron, America's No. 2 oil and gas producer.

NextEra's enormous growth underlines the shift toward clean energy amid growing planetary destruction as a result of climate change. Exxon, once the world's most valuable company, has seen its revenues and profits slide over the last decade. 

By contrast, NextEra — the largest wind producer in North America and one of the largest solar companies — has enjoyed profit margins of as much as 50%, while its stock has outperformed the broader stock market. (NextEra also produces some natural gas as well as nuclear power.)
The company's growth has also been unimpeded by the coronavirus pandemic. "This is the best renewables development environment we've ever been in," Rebecca Kujawa, NextEra's chief financial officer, told investors last month. 

Exxon, whose overall value as a company has been shrinking since 2007, has been hit especially hard because of the impact of COVID-19 on travel and oil consumption. Exxon's market cap shrank in half in 2020 alone. In August, the company lost its symbolically important place in the Dow after nearly a century of listing on the blue-chip index, replaced by software maker Salesforce.

It's worth noting that Exxon's revenues still dwarf NextEra's. The oil titan pulled in $255 billion in revenues last year, compared to NextEra's $19.2 billion. Yet NextEra's stock trades for $287 a share, reflecting investor expectations for future growth, while Exxon's stock is valued at $33. 

While some fossil-fuel companies, such as Royal Dutch Shell and BP, have tried to capture a piece of the renewables boom and pledged to cut down their own carbon emissions, Exxon has largely resisted the trend. Bloomberg reported on Monday that Exxon plans to increase its annual greenhouse-gas emissions by 17%, citing internal documents.

On Monday, the Department of Energy touted a new report on oil and natural gas that described fossil fuels as "providing energy security and supporting our quality of life." The Trump administration also continues to promote fossil-fuel development and has rolled back emissions limits.

But alternative energy, such as solar, wind and hydroelectric power, is today the cheapest source of energy in the U.S., explaining its appeal to investors, despite government policy.

"Today, hundreds of billions of dollars of capital are flowing into clean energy," Bruce Usher, an investor and professor at Columbia Business School, recently told CBS MoneyWatch.

"That bucket for investors is not about policy," he said. "It's about where you can get the biggest return."

Investment bank UBS on Monday cited NextEra's ascent in encouraging their clients to consider investing in clean power.

"[W]hile NextEra Energy only briefly overtook ExxonMobil in intraday trading, this does, in our view, underline the multi-year shift from traditional toward renewable energy, one that will continue in the decades ahead," UBS analysts wrote in a research note. 

As another example of this shift, UBS cited electric carmaker Tesla, which earlier this year became the world's most valuable car manufacturer.

The main driver of the clean-energy boom, according to UBS is China. The world's most populous country and largest greenhouse-gas emitter has pledged to zero out its carbon emissions by 2060. "Given China accounts for 30% of the world's greenhouse gas emissions, this declaration is significant," the analysts wrote.

© 2020 CBS Interactive Inc.. All Rights Reserved.

Matt Chester's picture
Matt Chester on Oct 9, 2020

Do you think this trend is here to stay-- will more renewables start to overtake the oil giants immediately, or will there be a oil resurgence in the next year or two (before eventually falling off to the energy transition)?

Peter Key's picture
Peter Key on Oct 10, 2020

By revenue, NextEra is more regulated utility than renewables developer. Its total operating revenue in the second quarter was $4.2 billion. Its Florida Power & Light subsidiary produced two thirds of that, or $2.8 billion. NextEra also reportedly made a bid for Duke Energy in what Reuters said would have been the utility sector's biggest acquisition.

Al Karaki's picture
Thank Al for the Post!
Energy Central contributors share their experience and insights for the benefit of other Members (like you). Please show them your appreciation by leaving a comment, 'liking' this post, or following this Member.
More posts from this member

Get Published - Build a Following

The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.

If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.

                 Learn more about posting on Energy Central »