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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Like many of its electric utility brethren, Evergy Incorporated (NYSE:EVRG) (Kansas City, Missouri), formed in 2018 by the merger of Westar Resources and Kansas City Power & Light, is decarbonizing. And, as it acts to shrink its carbon footprint, it is significantly increasing its planned capital expenditures (capex).
Two years ago, Evergy had a $6.1 billion, five-year capital plan. But its most recent five-year capital plan has risen by about one-third, to at least $9.2 billion over the next five years, 2021 through 2025, with the potential for that sum to increase by another $250 million.
Click on the image at right to see Evergy's five-year capital spending plan, 2021-2025.
The utility, which serves about 1.6 million customers in Kansas and Missouri, plans to sharply increase its spending on transmission and distribution, to about $5.9 billion over the 2021-2025 period, up from about $3.5 billion over the 2019-2023 period, according to the company's quarterly earnings presentations for the first quarters of 2021 and 2019.
Its more recent earnings reports have added a line item for spending on renewable generation, which is expected to total about $675 million over the 2023-2024 period. The company plans to add 750 megawatts (MW) of solar generation over that two-year period. The company is still early in the process of procuring those resources through a request for proposal (RFP).
Click on the image at right to see a table showing which areas of the business Evergy plans to invest in over the 2021-2025 timeframe.
By state, roughly 63% of Evergy's capital spend over the 2021-2025 period will be in Kansas, while the remaining 37% will be in Missouri. Assets that are jurisdictional at the Federal Energy Regulatory Commission (FERC) (Washington, D.C.) most likely are interstate transmission lines.
Click on the image at right to see a breakdown, by state and jurisdiction, of Evergy's $9.2 billion in planned capital spending over the 2021-2025 period.
Farther out, between 2025 and 2032, the company plans to add an additional 3,500 MW of renewable generation. The cost of those additions, expected to be in the billions of dollars, are not included in the company's current five-year capex plan.
An important part of the company's decarbonization plan is to close several coal-fired generators over the next two decades, according to an integrated resource plan (IRP) it filed this spring with Kansas and Missouri regulators. Specifically:
In 2010, coal accounted for about 52% of the electric generation capacity owned by Evergy's predecessor companies. That number declined to 40% in 2020, and Evergy hopes to reduce that to 24% and 7% in 2030 and 2040, respectively. The company also plans to continue shrinking its gas- and oil-fired generation as it sharply increases its wind and solar generation.
Click on the image at right to see Evergy's fuel mix has changed since 2010, and how the company plans to change it further over the next two decades.
In announcing Evergy's net-zero by 2045 goal on April 30, David Campbell, president and chief executive officer, said this was "a significant step forward for our customers, communities and shareholders. We're on a journey to a cleaner energy future, while balancing the highest priorities of reliability and affordability for our customers."
"Our coal-fired fossil plants are now more flexible than ever and frequently operate as a backup to renewable generation sources," he continued. "This flexibility allows us to adapt to real-time needs--running fossil plants more when renewable availability is low or customer demand is high. This measured transition toward more sustainable resource options maintains the reliability our customers need."
Campbell added: "The announcement of significant growth in renewable energy will bring economic benefits to our region through more cost-competitive generation and investment in rural communities. We're hearing more often from current and prospective commercial and industrial customers about their desire to move to more sustainable operations. This plan helps us help them achieve their carbon goals, as well as advancing Evergy's emissions targets."
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.
Two years ago, Evergy had a $6.1 billion, five-year capital plan. But its most recent five-year capital plan has risen by about one-third, to at least $9.2 billion over the next five years, 2021 through 2025, with the potential for that sum to increase by another $250 million.
Click on the image at right to see Evergy's five-year capital spending plan, 2021-2025.The utility, which serves about 1.6 million customers in Kansas and Missouri, plans to sharply increase its spending on transmission and distribution, to about $5.9 billion over the 2021-2025 period, up from about $3.5 billion over the 2019-2023 period, according to the company's quarterly earnings presentations for the first quarters of 2021 and 2019.
Its more recent earnings reports have added a line item for spending on renewable generation, which is expected to total about $675 million over the 2023-2024 period. The company plans to add 750 megawatts (MW) of solar generation over that two-year period. The company is still early in the process of procuring those resources through a request for proposal (RFP).
Click on the image at right to see a table showing which areas of the business Evergy plans to invest in over the 2021-2025 timeframe.By state, roughly 63% of Evergy's capital spend over the 2021-2025 period will be in Kansas, while the remaining 37% will be in Missouri. Assets that are jurisdictional at the Federal Energy Regulatory Commission (FERC) (Washington, D.C.) most likely are interstate transmission lines.
Click on the image at right to see a breakdown, by state and jurisdiction, of Evergy's $9.2 billion in planned capital spending over the 2021-2025 period.Farther out, between 2025 and 2032, the company plans to add an additional 3,500 MW of renewable generation. The cost of those additions, expected to be in the billions of dollars, are not included in the company's current five-year capex plan.
An important part of the company's decarbonization plan is to close several coal-fired generators over the next two decades, according to an integrated resource plan (IRP) it filed this spring with Kansas and Missouri regulators. Specifically:
- Lawrence Energy Center units 4 and 5, totaling 487 MW, will be closed by yearend 2023. Those units began operating in 1960 and 1971, respectively.
- Lake Road units 4, 5 and 6, totaling 97 MW, will be closed in 2024. Those units began generating electricity in 1966, 1974 and 1989, respectively.
- Jeffrey Energy Center Unit 3, rated at 669 MW, will be closed in 2030. That unit came online in 1983.
- La Cygne Power Station Unit 1, rated at 749 MW, will be retired in 2032. That unit began operating in 1973.
- By 2039, at the far edge of the IRP planning horizon, Evergy plans to close an additional 2,613 MW of coal-fired generation at La Cygne Unit 2, Jeffrey Energy Center Unit 1 and 2, and Iatan Unit 1.
In 2010, coal accounted for about 52% of the electric generation capacity owned by Evergy's predecessor companies. That number declined to 40% in 2020, and Evergy hopes to reduce that to 24% and 7% in 2030 and 2040, respectively. The company also plans to continue shrinking its gas- and oil-fired generation as it sharply increases its wind and solar generation.
Click on the image at right to see Evergy's fuel mix has changed since 2010, and how the company plans to change it further over the next two decades.In announcing Evergy's net-zero by 2045 goal on April 30, David Campbell, president and chief executive officer, said this was "a significant step forward for our customers, communities and shareholders. We're on a journey to a cleaner energy future, while balancing the highest priorities of reliability and affordability for our customers."
"Our coal-fired fossil plants are now more flexible than ever and frequently operate as a backup to renewable generation sources," he continued. "This flexibility allows us to adapt to real-time needs--running fossil plants more when renewable availability is low or customer demand is high. This measured transition toward more sustainable resource options maintains the reliability our customers need."
Campbell added: "The announcement of significant growth in renewable energy will bring economic benefits to our region through more cost-competitive generation and investment in rural communities. We're hearing more often from current and prospective commercial and industrial customers about their desire to move to more sustainable operations. This plan helps us help them achieve their carbon goals, as well as advancing Evergy's emissions targets."
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.
