Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Economy

How Wall Street Is Making Sense of Energy’s Weird In-Between Period

Four takeaways from a week of earnings.

Renewables, a Tesla, and an oil refinery.
Heatmap Illustration/Getty Images

Every few months, corporate earnings announcements give us the chance to (pretty literally) take stock of how the energy transition is going. After a rocky end-of-year for many renewables companies, this earnings season was, perhaps, more warily anticipated than most.

A bunch of energy companies reported this week, ranging from fossil fuel stalwarts to the bleeding edge of decarbonization and in between. The results indicate an industry that's a bit unsure of itself — showing promising signs overall, but with lots still to figure out, especially in how to make offshore wind a real business. Everyone expects growth, but turning that growth in consistent profits can be tricky.

Here are four takeaways from a mixed bag:

1. TL;DR: Look at GE.

GE’s renewable energy business is a kind of snapshot for utility scale investment: it's doing a lot, but at least for now struggling to make money and taking a bath on offshore wind. The business reported both a fourth quarter loss and a full-year loss for 2023, but its onshore wind turbine business was profitable, as was its business servicing the electric grid. Offshore wind, meanwhile, remained something of a money suck.

So while  one large offshore wind order was cancelled (likely a New Jersey project), GE’s renewables head Scott Strazik said the massive SunZia wind project in the Southwest was still full steam ahead with an order for 2.4 gigawatts worth of wind capacity.

2. Transmission is hot right now.

The rush to build out new power lines to deliver new electricity also buoyed GE’s business, with “a number of large [high voltage direct current] orders” — infrastructure for sending power over long distances — and a 40% jump in orders for power transformers, equipment necessary to help move electricity. “There’s a lot of healthy demand across renewables that we expect to continue into 2024,” Strazik said.

That demand is coming from companies like NextEra,  which combines a regulated utility in Florida with a wind, solar, and storage development business. The company told investors in a presentation on Thursday that it “continues to see strong demand for new renewables and storage,” and had added 9,000 megawatts of combined renewables and storage in 2023. The company said it would spend almost $2 billion to build out transmission through 2027, creating a virtuous cycle with manufacturers like GE.

3. Storage is taking off.

If NextEra is on one end of the storage business, then Tesla is on the other. The former builds out utility-scale battery operations, often on the same sites as solar projects, and could “operate up to 53 gigawatts of generation with the potential to co-locate battery storage,” its chief executive John Ketchum told investors.

In Tesla’s earnings call on Wednesday, meanwhile, CEO Elon Musk spotlighted the company’s Tesla Energy business, which sells the Powerwall battery and solar system, as an area of high growth while its core auto business goes through a period of transition. A new model code-named “Redwood” coming, Musk said, in 2025.

Musk said the company’s energy storage business “delivered nearly 15 GW-hours of batteries in 2023, compared to 6.5 GW-hours the year before,” growth he described as “tremendous.” And while investors were miffed that Tesla didn’t provide a forecast for growth in car sales — which implied it wouldn’t hit its traditional 50% target — Musk was happy to say that he thought the company’s storage business “would grow much faster than the car business.”

4. Don’t count out fossil fuels.

While the oil majors have yet to release their fourth quarter earnings, the market got a hint at how things were going from the results released by Halliburton, the oil services firm that’s also a major player in fracking.

The company hiked up its dividend and reported both revenue and profit growth in 2023. Overall, the business was the most profitable it had been “in over a decade,” the company’s chief financial officer, Eric Carre, told analysts.

It did, however, note that the footprint of its North American business was shrinking as the number of active oil rigs had declined, and that it expected “flattish revenue and margin environment,” the company’s chief executive, Jeff Miller, added. Meanwhile, overseas, Miller  said he expected industry spending to “grow at a low double-digit pace,” with “multiple years of sustained activity growth.”

He did not, however, expect an end to oil any time soon. “[The] long-term expansion of the global economy will continue to create enormous demands on all forms of energy,” Miller said. “I expect oil and gas remains a critical component of the global energy mix with demand growth well into the future.”

Yellow

You’re out of free articles.

Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Hotspots

Judge, Siding With Trump, Saves Solar From NEPA

And more on the week’s biggest conflicts around renewable energy projects.

The United States.
Heatmap Illustration/Getty Images

1. Jackson County, Kansas – A judge has rejected a Hail Mary lawsuit to kill a single solar farm over it benefiting from the Inflation Reduction Act, siding with arguments from a somewhat unexpected source — the Trump administration’s Justice Department — which argued that projects qualifying for tax credits do not require federal environmental reviews.

  • We previously reported that this lawsuit filed by frustrated Kansans targeted implementation of the IRA when it first was filed in February. That was true then, but afterwards an amended complaint was filed that focused entirely on the solar farm at the heart of the case: NextEra’s Jeffrey Solar. The case focuses now on whether Jeffrey benefiting from IRA credits means it should’ve gotten reviewed under the National Environmental Policy Act.
  • Perhaps surprisingly to some, the Trump Justice Department argued against these NEPA reviews – a posture that jibes with the administration’s approach to streamlining the overall environmental analysis process but works in favor of companies using IRA credits.
  • In a ruling that came down on Tuesday, District Judge Holly Teeter ruled the landowners lacked standing to sue because “there is a mismatch between their environmental concerns tied to construction of the Jeffrey Solar Project and the tax credits and regulations,” and they did not “plausibly allege the substantial federal control and responsibility necessary to trigger NEPA review.”
  • “Plaintiffs’ claims, arguments, and requested relief have been difficult to analyze,” Teeter wrote in her opinion. “They are trying to use the procedural requirements of NEPA as a roadblock because they do not like what Congress has chosen to incentivize and what regulations Jackson County is considering. But those challenges must be made to the legislative branch, not to the judiciary.”

2. Portage County, Wisconsin – The largest solar project in the Badger State is now one step closer to construction after settling with environmentalists concerned about impacts to the Greater Prairie Chicken, an imperiled bird species beloved in wildlife conservation circles.

Keep reading...Show less
Yellow
Spotlight

Renewables Swept Up in Data Center Backlash

Just look at Virginia.

A data center.
Heatmap Illustration/Getty Images

Solar and wind projects are getting swept up in the blowback to data center construction, presenting a risk to renewable energy companies who are hoping to ride the rise of AI in an otherwise difficult moment for the industry.

The American data center boom is going to demand an enormous amount of electricity and renewables developers believe much of it will come from solar and wind. But while these types of energy generation may be more easily constructed than, say, a fossil power plant, it doesn’t necessarily mean a connection to a data center will make a renewable project more popular. Not to mention data centers in rural areas face complaints that overlap with prominent arguments against solar and wind – like noise and impacts to water and farmland – which is leading to unfavorable outcomes for renewable energy developers more broadly when a community turns against a data center.

Keep reading...Show less
Yellow
Energy

Where Clean Energy Goes From Here

The One Big Beautiful Bill Act is one signature away from becoming law and drastically changing the economics of renewables development in the U.S. That doesn’t mean decarbonization is over, experts told Heatmap, but it certainly doesn’t help.

The Big Beautiful Bill and clean energy.
Heatmap Illustration/Getty Images

What do we do now?

That’s the question people across the climate change and clean energy communities are asking themselves now that Congress has passed the One Big Beautiful Bill Act, which would slash most of the tax credits and subsidies for clean energy established under the Inflation Reduction Act.

Keep reading...Show less
Blue