Duke Energy Corp. DUK recently unveiled its long-term investment plan along with increasing its current five-year capital target and clean energy projections at the company’s inaugural environmental, social and governance (ESG) day. This comes at a high time when a handful of Utilities across the board are steadily ramping up their carbon-dioxide (CO2) emission reduction goals.
The company now forecasts that its current five-year capital plan will increase by about $2 billion to approximately $58 billion.
Details of the Long-Term Plan
Duke Energy’s recently-announced plan includes acceleration of coal plant retirements in addition to the 50 coal units with capacity worth more than 6,500 megawatts (MW), which it already retired since 2010. The company aims to retire all coal-only units in the Carolinas and reduce methane emissions in its natural gas business to netzero by 2030.
In terms of promoting clean energy, the company now targets to bring its regulated renewable capacity total to 40 gigawatts (GW) by 2050.It also aims to add more than 11,000 MW of energy storage to its system by 2050.
For such clean energy expansion, Duke Energy aims to spend capital in the range of $65-$75 billion during the 2025-2029 period. Such clean energy transition will enable the company to increase its earnings at the upper end of its current long-term adjusted EPS growth rate of 4-6% through 2024.
Factors Driving Decarbonization
In the United States, most utilities significantly lowered their CO2 emissions since 2005. This was possible owing to sustained low natural gas prices and declining costs for renewable generation alongside technological innovations that promoted energy storage.
Also, improvements in power plant efficiency and shifts in investments towards clean energy within the power sector have been boosting decarbonization for a while now. Further, state energy policies like renewable standard portfolio as well as subsidies