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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--If you're a renewable power developer, Duke Energy Corporation (NYSE:DUK) (Charlotte, North Carolina) wants to speak with you. If you're a battery energy storage system (BESS) company, Duke wants to hear from you, too. And even developers of natural gas and nuclear generation should stay in touch with Duke, one of the nation's largest utility holding companies, serving about 7.7 million electric customers in six states and another 1.6 million customers in five states.
On October 9, Duke held its first virtual ESG (Environment, Social and Governance) Day for investors. There, it rolled out plans to accelerate its departure from coal, sharply increase its renewable generation, dramatically expand battery energy storage and bring methane emissions in its natural gas business to net zero by 2030.
Duke's plan to decarbonize its business includes:
"I want you to think about two numbers," Young told investors on the virtual conference. "$20 billion and $50 billion. Those numbers represent the range of incremental investment required over the next 15 years" to lower carbon dioxide emissions by between 55% and 75% by 2035.
Over time, the new investments and coal-plant shutdowns are expected to cut Duke's reliance on coal or oil to generate electricity from 24% in 2019 to 11% in 2030 and 1% in 2040, Duke executives told investors this summer, before ESG Day, when announcing the company's second-quarter earnings. Approximately 31% of Duke's electricity was generated from natural gas last year, and that number is expected to grow to 42% in 2030 before shrinking to 25% in 2040 and 6% in 2050, the company said this summer.
About 5% of Duke's electricity came from renewables in 2019, but that number is expected to rise to 14% in 2030 and 29% in 2040, company executives said on the second-quarter conference call.
Click on the image at right to see Duke's current and projected fuel mix.
If the company's decarbonization measures are implemented, those numbers could change: coal could fall faster while renewables could rise faster.
"As you transition out of coal," Young continued, "you will have lower fuel costs. As you transition out of coal, you will have lower non-fuel (costs). There are less people. The outages are less complex. The third area is our continual pursuit of efficiencies across our footprint to our business transformation model."
"We will continue to find digital applications to automate processes," Young said. "We will use data analytics to tell us how to do things and when to do it better. And we have learned from the pandemic how to virtually move our workforce from areas of lesser importance to emergent work to help us displace the need for contractors."
Industrial Info is tracking 56 active projects by Duke Energy worth about $6 billion in total investment value (TIV). Sixteen of those projects are for renewable energy generation. The TIV on those projects is about $1.7 billion, with Florida gaining the lion's share of stated future investments, followed by North Carolina, South Carolina and Indiana. Roughly $4.3 billion of the company's planned capital expenditures will go to fossil fuel-related projects, including: building new gas-fired generation; environmental cleanup of coal ash ponds; dismantling and demolition of retired generating stations; uprating hydro generation; converting coal units to burn gas; and building or upgrading transmission & distribution projects.
Click on the image at right to see where Duke Energy plans to build new renewable generation.
Those capital investment numbers don't include renewable generation projects developed by a third party for Duke, which would be covered by a power purchase agreement (PPA). For example, a few days after Duke's ESG Day, developer Capital Power Corporation (Edmonton, Alberta) said it signed PPAs with Duke for three solar generation projects in North Carolina. The aggregate generating capacity of the three projects - Hornet Solar, Hunter's Cove Solar and Bear Branch Solar - is about 160 MW. The company estimated it would cost about $198 million to build the three projects. Construction of those projects is expected to begin in early 2021 or early 2022, and all three are scheduled to be operating by late 2022.
Duke is not the first utility to hold an ESG Day, and even those utilities that don't reserve an entire day for ESG matters are including ESG information in their quarterly presentations to investors and analysts.
Roughly 700 people dialed in to Duke's ESG virtual presentation, spokesperson Catherine Butler said in an interview.
Butler added that preliminary feedback from stakeholders, including state utility regulators, has been positive.
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.
On October 9, Duke held its first virtual ESG (Environment, Social and Governance) Day for investors. There, it rolled out plans to accelerate its departure from coal, sharply increase its renewable generation, dramatically expand battery energy storage and bring methane emissions in its natural gas business to net zero by 2030.
Duke's plan to decarbonize its business includes:
- Retiring all its coal-only generating units in the Carolinas by 2030 and accelerating the retirement of coal plants in the Midwest
- Double its renewable generation fleet, to 16,000 megawatts (MW), by 2025, 24,000 MW by 2030, and 40,000 MW by 2050
- Install more than 11,000 MW of battery energy storage systems by 2050
- Achieve net-zero methane emissions in its gas distribution business by 2030
"I want you to think about two numbers," Young told investors on the virtual conference. "$20 billion and $50 billion. Those numbers represent the range of incremental investment required over the next 15 years" to lower carbon dioxide emissions by between 55% and 75% by 2035.
Over time, the new investments and coal-plant shutdowns are expected to cut Duke's reliance on coal or oil to generate electricity from 24% in 2019 to 11% in 2030 and 1% in 2040, Duke executives told investors this summer, before ESG Day, when announcing the company's second-quarter earnings. Approximately 31% of Duke's electricity was generated from natural gas last year, and that number is expected to grow to 42% in 2030 before shrinking to 25% in 2040 and 6% in 2050, the company said this summer.
About 5% of Duke's electricity came from renewables in 2019, but that number is expected to rise to 14% in 2030 and 29% in 2040, company executives said on the second-quarter conference call.
If the company's decarbonization measures are implemented, those numbers could change: coal could fall faster while renewables could rise faster.
"As you transition out of coal," Young continued, "you will have lower fuel costs. As you transition out of coal, you will have lower non-fuel (costs). There are less people. The outages are less complex. The third area is our continual pursuit of efficiencies across our footprint to our business transformation model."
"We will continue to find digital applications to automate processes," Young said. "We will use data analytics to tell us how to do things and when to do it better. And we have learned from the pandemic how to virtually move our workforce from areas of lesser importance to emergent work to help us displace the need for contractors."
Industrial Info is tracking 56 active projects by Duke Energy worth about $6 billion in total investment value (TIV). Sixteen of those projects are for renewable energy generation. The TIV on those projects is about $1.7 billion, with Florida gaining the lion's share of stated future investments, followed by North Carolina, South Carolina and Indiana. Roughly $4.3 billion of the company's planned capital expenditures will go to fossil fuel-related projects, including: building new gas-fired generation; environmental cleanup of coal ash ponds; dismantling and demolition of retired generating stations; uprating hydro generation; converting coal units to burn gas; and building or upgrading transmission & distribution projects.
Those capital investment numbers don't include renewable generation projects developed by a third party for Duke, which would be covered by a power purchase agreement (PPA). For example, a few days after Duke's ESG Day, developer Capital Power Corporation (Edmonton, Alberta) said it signed PPAs with Duke for three solar generation projects in North Carolina. The aggregate generating capacity of the three projects - Hornet Solar, Hunter's Cove Solar and Bear Branch Solar - is about 160 MW. The company estimated it would cost about $198 million to build the three projects. Construction of those projects is expected to begin in early 2021 or early 2022, and all three are scheduled to be operating by late 2022.
Duke is not the first utility to hold an ESG Day, and even those utilities that don't reserve an entire day for ESG matters are including ESG information in their quarterly presentations to investors and analysts.
Roughly 700 people dialed in to Duke's ESG virtual presentation, spokesperson Catherine Butler said in an interview.
Butler added that preliminary feedback from stakeholders, including state utility regulators, has been positive.
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.
