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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Executives from American Electric Power Company Incorporated (NYSE:AEP) (Columbus, Ohio) told peer utility-company executives earlier this month that the company is planning about $37 billion of capital expenditures over the 2021-2025 period, approximately 72% of which will be earmarked for the company's transmission & distribution (T&D) business.
Click on the image at right to see a breakdown of AEP's 2021-2025 capital investments.
AEP owns about 40,000 miles of transmission lines and 221,000 miles of distribution lines. The company serves about 5.5 million customers in 11 states.
Speaking November 9 at the 55th annual Edison Electric Institute's (EEI) Financial Conference, AEP leaders detailed the utility giant's years-long transition to a cleaner energy company: more coal-fired plants will close, emissions will decline and more renewable generation will be added to the company's portfolio.
AEP plans to invest about $26.7 billion in its T&D business between 2021 and 2025, more than in previous five-year plans.
Click the image at right to see how AEP's 2021-2025 capital spending plans compare with its previous five-year plans.
Industrial Info is tracking more than 180 active AEP capital projects valued at about $4.2 billion. Most of the largest projects are environmental remediation, specifically closing coal-ash ponds to comply with a federal rule on coal combustion residuals (CCRs), although the company has earmarked about $200 million to build a 128-megawatt (MW) windfarm in Kansas. Click here for a list of AEP projects.
AEP has been transitioning to more of a regulated T&D enterprise in recent years. For more on that, see May 28, 2019, article - AEP Sets $33 Billion Capex for 2019-2023 and February 17, 2017, article - Turning Away from Merchant Generation, AEP Unveils $17.3 Billion Capital Budget in Regulated Markets.
The materials AEP shared with attendees at the November 9 EEI conference underscores the degree to which its capital spending has moved away from merchant generation, indeed all generation, over the past decade. In 2010, AEP allocated 44% of its capital investment toward generation. The current five-year forecast envisions allocating only about 18% of capital spend toward generation. Spending on transmission over the 2021-2025 period is expected to more than double from earlier spending, while investments in the distribution business over the next five years are expected to rise only modestly from what they were in 2010.
Click on the image at right to see how AEP's capital allocation has changed since 2010.
Going forward, over the 2021-2025 period, capital spending is scheduled to be heaviest for AEP's Transmission Holding Company, at $7.9 billion, followed by AEP Texas ($6 billion), Appalachian Power Company ($4.9 billion), AEP Ohio ($4 billion) and Southwestern Electric Power Company ($3.7 billion).
Click on the image at right to see which AEP operating companies are scheduled to receive the largest capital investments over the next five years.
AEP has invested billions of dollars in recent years, and will continuing making those investments, to transition its generation away from coal and toward a mix of natural gas and renewables. As recently as 2005, 70% of AEP's generating capacity was coal-fired, but that is scheduled to fall to about 43% this year and 24% in 2030.
Coal plant retirements and retrofits in the three decades since 1990 have cut AEP's sulfur dioxide (SO2) emissions by 97%, oxides of nitrogen (NOx) emissions by 94% and mercury emissions by 97%, officials told attendees at the EEI conference.
Currently, AEP's coal-fired generation fleet totals about 12,100 megawatts (MW), AEP officials said. The company plans to retire about 1,111 MW of coal-fired generation in 2020, and another 4,264 MW over the 2021-2030 period. In addition, the company plans to allow its lease on Rockport Unit 2, a 1,310-MW unit, expire in 2022. By 2030, AEP's coal fleet will stand at about 6,500 MW, roughly a fourth of what it was in 2010, company officials said.
Fueled by those coal plant retirements, AEP expects to cut its carbon dioxide (CO2) emissions by 70% by 2030, compared with a 2000 baseline. By 2050, company officials said, emissions will fall to 80% below that 2000 baseline. AEP ultimately aspires to have net-zero carbon emissions.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
AEP owns about 40,000 miles of transmission lines and 221,000 miles of distribution lines. The company serves about 5.5 million customers in 11 states.
Speaking November 9 at the 55th annual Edison Electric Institute's (EEI) Financial Conference, AEP leaders detailed the utility giant's years-long transition to a cleaner energy company: more coal-fired plants will close, emissions will decline and more renewable generation will be added to the company's portfolio.
AEP plans to invest about $26.7 billion in its T&D business between 2021 and 2025, more than in previous five-year plans.
Industrial Info is tracking more than 180 active AEP capital projects valued at about $4.2 billion. Most of the largest projects are environmental remediation, specifically closing coal-ash ponds to comply with a federal rule on coal combustion residuals (CCRs), although the company has earmarked about $200 million to build a 128-megawatt (MW) windfarm in Kansas. Click here for a list of AEP projects.
AEP has been transitioning to more of a regulated T&D enterprise in recent years. For more on that, see May 28, 2019, article - AEP Sets $33 Billion Capex for 2019-2023 and February 17, 2017, article - Turning Away from Merchant Generation, AEP Unveils $17.3 Billion Capital Budget in Regulated Markets.
The materials AEP shared with attendees at the November 9 EEI conference underscores the degree to which its capital spending has moved away from merchant generation, indeed all generation, over the past decade. In 2010, AEP allocated 44% of its capital investment toward generation. The current five-year forecast envisions allocating only about 18% of capital spend toward generation. Spending on transmission over the 2021-2025 period is expected to more than double from earlier spending, while investments in the distribution business over the next five years are expected to rise only modestly from what they were in 2010.
Going forward, over the 2021-2025 period, capital spending is scheduled to be heaviest for AEP's Transmission Holding Company, at $7.9 billion, followed by AEP Texas ($6 billion), Appalachian Power Company ($4.9 billion), AEP Ohio ($4 billion) and Southwestern Electric Power Company ($3.7 billion).
AEP has invested billions of dollars in recent years, and will continuing making those investments, to transition its generation away from coal and toward a mix of natural gas and renewables. As recently as 2005, 70% of AEP's generating capacity was coal-fired, but that is scheduled to fall to about 43% this year and 24% in 2030.
Coal plant retirements and retrofits in the three decades since 1990 have cut AEP's sulfur dioxide (SO2) emissions by 97%, oxides of nitrogen (NOx) emissions by 94% and mercury emissions by 97%, officials told attendees at the EEI conference.
Currently, AEP's coal-fired generation fleet totals about 12,100 megawatts (MW), AEP officials said. The company plans to retire about 1,111 MW of coal-fired generation in 2020, and another 4,264 MW over the 2021-2030 period. In addition, the company plans to allow its lease on Rockport Unit 2, a 1,310-MW unit, expire in 2022. By 2030, AEP's coal fleet will stand at about 6,500 MW, roughly a fourth of what it was in 2010, company officials said.
Fueled by those coal plant retirements, AEP expects to cut its carbon dioxide (CO2) emissions by 70% by 2030, compared with a 2000 baseline. By 2050, company officials said, emissions will fall to 80% below that 2000 baseline. AEP ultimately aspires to have net-zero carbon emissions.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
