Heavier riders do produce more watts.
Power = force x distance / time, so because power is in part a function of force, heavier riders will produce more absolute power because of the additional bodyweight they are forcing onto the pedals.
However, more watts doesn’t necessarily mean more speed. The power-to-weight ratio and CdA (coefficient of aerodynamic drag) are the two most important factors that determine a cyclist’s speed. Heavier riders are usually larger than lighter riders. Thus they are slowed down by additional drag as much as by their heavier weight.