POWER May 2022 Intl - 19

UTILITY SPOTLIGHT
2. Duke Energy subsidiaries own a massive generating fleet with a combined capacity of 50.3
GW. However, Duke Energy's power mix has transformed dramatically since 2005. Courtesy:
Duke Energy
segment, meanwhile, conducts natural
gas operations primarily through the
regulated public utilities of Piedmont,
Duke Energy Ohio, and Duke Energy
Kentucky, serving residential, commercial,
industrial, and power generation
natural gas customers. Finally, Duke Energy's
commercial renewables segment
acquires, develops, builds, operates, and
owns wind and solar renewable generation
throughout the U.S. The segment's
portfolio includes utility-scale wind and
solar generation assets, distributed solar
generation assets, distributed fuel
cell assets, and battery storage projects,
which total 3,554 MW across 22 states.
These include 23 wind facilities, 178 solar
projects, 71 fuel cell locations, and
two battery storage facilities.
Duke Energy notes that revenues from
the increasingly lucrative commercial
renewables division are primarily generated
by selling renewable power through
long-term contracts to an array of customers,
many of which have obligations
under state-mandated renewable portfolio
standards. Outside of these ventures,
Duke Energy also owns a captive insurance
company, Bison, which provides
the company's subsidiaries with indemnification
for financial losses. It also notably
holds a 17.5% equity interest in NMC,
a petrochemical and plastics producer
based in Saudi Arabia.
Multi-Pronged Challenges
While the company's business interests
have historically been shaped by business
opportunity and soaring power
demand, recent changes appear to be
more solidly driven by a combination of
factors, including pressure from shareholders
to improve its environmental,
social, and governance (ESG) posture. In
response to a recent resolution by nonprofit
advocacy group As You Sow that
urged the company to revise its net-zero
target, Duke Energy in February said it
will expand its 2050 net-zero goals to
include Scope 2 and specific Scope 3
May 2022 | POWER
emissions. (Scope 2 emissions are indirect
emissions from power the company
purchases from others to use in its facilities,
while Scope 3 includes indirect
emissions that arise from other sources
in the company's value chain.)
In tandem, as part of its expanded
" Clean Energy Action Plan, " the company
also said it would dramatically slash
coal generation's share from the current
22% of total generation to 5% by 2030
and achieve a full phaseout of unabated
coal-companywide-by
2035. Duke
Energy has already reduced its Scope 1
carbon emissions from electricity generation
by 44% from 2005 levels. The majority
of those reductions were achieved
through the retirement of 56 coal units-
a combined 7.5 GW-since 2010.
But as Lynn Good, Duke Energy Corp.
chair, president, and CEO, noted at the
company's inaugural ESG Investor Day
in October 2020, ESG efforts are also
rooted in long-term sustainability, particularly
as the company continues to
navigate emerging industry disruptions
and related uncertainties. " We became
a stronger, more agile company, intensifying
our focus [on ESG] considerations,
and accelerating our clean energy transformation, "
Good said. ESG-conscious
changes to the company's generating
fleet and business interests offer a
" compelling investment story, " and investment,
Good noted, will be crucial to
the company's growth, given new infrastructure
demands related to the energy
transition. To achieve a complete coal
phase out by 2035, the company in February
said it expects to deploy more than
$130 billion over the next decade-$63
billion of which it will spend over the next
five years-to fund investments in grid
modernization and efforts to replace its
coal fleet with renewables, natural gas,
and emerging technologies.
Keeping customer bills affordable,
however, remains a crucial priority for the
company, which is why the company will
strive to mitigate capital increases by reducing
other costs. " As you transition out
of coal, you will have lower fuel costs, "
said Steve Young, Duke Energy executive
vice president and chief financial officer.
" 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, " he added. " We have a good track
record here as well. We will continue to
find digital applications to automate processes, "
he 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 dis3.
By 2035, only one Duke Energy coal plant could be operational-the Edwardsport integrated
gasification combined cycle (IGCC) plant. The 618-MW coal-fired project in Knox County,
Indiana, started commercial operations in June 2013. A POWER Top Plant in 2013, the plant is
one of only a handful of large-scale IGCC projects that are operating today worldwide. Courtesy:
Duke Energy
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POWER May 2022 Intl

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