President & Chief Executive Officer of NextEra Energy Resources LLC, NextEra Energy Inc
EDGE Chats: Rebecca Kujawa, NextEra Energy Resources
Rebecca Kujawa, Vice President of Business Management for NextEra Energy Resources talks about trends in the power sector, the future of the electric utility, and policy developments to watch. Part of the EDGE Chats series of conversations with executives about leading issues and trends at the intersection of energy, environment, and business. Hosted by the Center for Energy, Development, and the Global Environment (EDGE) at Duke University's Fuqua School of Business.
About Rebecca Kujawa
In a 2015 EDGE Chats interview at Duke University, Rebecca Kujawa, then Vice President of Business Management for NextEra Energy Resources, discussed trends in the power sector. She stated that electricity load growth is slowing due to energy efficiency, technology improvements, and cultural changes, while innovation in smart grid technology, battery storage, and wind and solar improvements are making clean energy more economic. Kujawa noted that cheaper natural gas has reduced power prices and that NextEra Energy Resources focuses on long-term contracts for capital investments. Kujawa highlighted the importance of public policy, citing the EPA's Clean Power Plan as a potential driver of a shift from coal to natural gas and renewables. She said the production tax credit for wind has been significant but that wind and solar have become economic enough to consider phasing it out. She also pointed to opportunities in gas infrastructure, such as pipelines to support utilities, and described battery storage as a technology that could change grid management and investment decisions.
Transcript (5 segments)
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Rebecca Kujawa0:19
From a university perspective, I would say the couple of top trends that we see are that loads are not growing as much as they used to. Energy efficiency, technology improvements, even some cultural changes for how people use power has changed. That still provides a lot of opportunity for certain parts of the sector, including those that are focused on clean energy, as there's a shift within technologies, but it's something we all have to focus on. Another key trend is the innovation and technology. We've seen tremendous innovations in the smart grid for how smart and intelligent our systems are, so how quickly we can respond to customer needs, but also different technologies that we're employing like battery storage.
Speaking is always going to be difficult. Who would have thought five years ago that the oil and gas markets would change so dramatically? And that's had a huge impact on what type of technologies different utilities are employing, or even independent power producers are building. Looking forward 10 years, we don't know. I certainly think distributed generation has a place in the marketplace. It's certainly something that some consumers and some markets will find very relevant, but I also think batteries will be highly impactful. And just broadly, utility-scale renewables will continue to have a significant place in how this market evolves.
The market price changes for oil and gas have had a significant impact on how we look at the business going forward. On the side of Florida Power and Light, we have a significant amount of natural gas, so that's tremendously positive. On the competitive energy side, NextEra Energy Resources is focused on the competitive business. It's changed the way that we do certain parts of our business. We're very focused on long-term contracts in order to have visibility to how we're going to make money from the significant capital investments we make, so we're very disciplined on that. It also creates real opportunities for technology innovation. The industry has responded very significantly to the need to be cost competitive in the renewable space. And third, we've taken opportunities for new parts of the business. An increase in gas demand for the utility sector results in opportunities for folks to build gas infrastructure, which is something that we're focused on, including building different gas pipelines.
There's significant regulation. Two that I would highlight that we expect to be significantly important: our EPA's 111d regulations, the final rule which some people know better as the Clean Power Plan, has the potential to have significant impact in the industry from a significant shift from coal to natural gas, but also the significant deployment of renewables as a way to reach compliance and ultimately improve the environmental emissions that affect us all as just normal human beings in the United States. The other one is the production tax credit, we call it the PTC, which has been a significant incentive for wind development for a number of years. It has been one of those short-term extensions from a public policy standpoint probably throughout its history.
Wind is tremendously economic in many parts of the country, along with solar, which is very exciting. There are many technologies that are exciting today. Smart grid technology is certainly one of them. We talk about it at the utility. The interesting development: a number of years ago, I wouldn't have known when your power was out until you called. And now, in certain cases, we know in advance of a power outage when something looks amiss in the whole broad fabric of the grid, and we're able to tell customers, 'Hey, there's an issue, let's help you address it,' which is a tremendous shift in the value proposition of what companies provide to consumers. The other technology shifts are things like battery storage, which is really going to potentially change the way that we...