Giant U.S. energy holding company Duke Energy in a new report outlined for shareholders how it will achieve a goal updated last year to reduce its 2030 carbon dioxide emissions 40% compared to 2005 and achieve a “science-based 2-degree target.”
The company’s 2017 Climate Report to Shareholders made public on March 22 unveils a strategy to transition to a lower-carbon future, while also setting a goal to reduce its carbon intensity—the amount of carbon dioxide emitted per kWh produced—by 45% compared to 2005 levels.
In 2017 compared to 2005, more than 38% of Duke Energy’s delivered power came from carbon-free sources, the company said. Core elements of the new strategy include a 10-year $25 billion plan to modernize the grid and make it more reliable, resilient, and efficient. The strategy also calls for investment of $11 billion in renewables and natural gas generation, increasing the share of gas power from 28% in 2016 to 36% in 2030.
Meanwhile, the company will retire nine coal units with a total capacity of about 2 GW as part of plans to reduce its share of coal generation from 34% in 2016 to 27% in 2030. The reductions follow an already substantial transformation of Duke Energy’s fleet between 2011 and 2017, when it retired 47 coal units with a combined capacity of 5.4 GW and added 3 GW of renewables.
In the report, Duke Energy also said it is evaluating the possibility of seeking additional license extensions from the Nuclear Regulatory Commission for its existing nuclear plants, which in 2017 marked 19 consecutive years of operating at a capacity factor exceeding 90%.
Duke Energy’s strategy is described in an Environmental, Social, Governance (ESG) and Sustainability reporting template that member companies of the Edison Electric Institute are piloting as part of a voluntary initiative to better provide investors with uniform and consistent ESG/sustainability metrics. The company’s report echos efforts recently announced by American Electric Power (AEP) to pursue a strategy to reduce is carbon emissions by by 60% from 2000 levels by 2030, and 80% from 2000 levels by 2050.
Both companies pointed to customer expectations for their move to decarbonize. In its report, Duke Energy said: “The electric utility industry is undergoing extraordinary transformation, driven by increasing customer expectations, rapidly changing technology and new public policy requirements.
“We must also adjust to a changing climate and ensure our system remains resilient and provides value to our customers and shareholders for decades to come. To succeed in this dynamic environment, we developed a long-term, customer-focused strategy designed to mitigate risks and guide investments that deliver greater value to our customers and shareholders.”
—Sonal Patel is a POWER associate editor (@sonalcpatel, @POWERmagazine)