The world is in the early stages of a major energy transition, as it looks to shift from carbon fuels to cleaner alternatives. It would be great if such shifts were as easy as flipping a light switch, but that’s just not how things work. This transition is likely to take decades. But that doesn’t mean companies, or investors, should ignore the changes. And that’s why NextEra Energy (NEE -3.36%) and TotalEnergies (TTE -1.91%) are both names to keep an eye on as they look to ensure the world has power today and in the future.
Big and getting bigger
NextEra Energy is one of the largest electric utilities in the U.S. Florida Power & Light is its most important business on that front, supplying power to around 5.7 million customers in the Sunshine State. This is a regulated business, which means that NextEra has a monopoly in the markets it serves and, in exchange, has to get its rates approved by the government. In order to appease regulators, NextEra spends money on upgrading and maintaining its systems.
Image source: Getty Images.
This relationship means that both financial results and the company’s capital spending tend to be fairly stable over time. In general, utilities are pretty boring and reliable. What makes NextEra so interesting is that the other half of its business is a massive solar and wind operation. In fact, the company claims to be “the world’s largest generator of renewable energy from the wind and sun.” It’s also a big player in the energy storage space, which is an increasingly important component in the transition away from carbon fuels. This is the company’s growth platform, and its being built on top of the boring but reliable electric utility business.
The numbers are pretty astounding. R …