Top 5 U.S. utilities that didn’t promise to go completely carbon free
Electric utilities everywhere are promising to eliminate or offset their carbon emissions – here is The look of GTM in the top five.
Such promises were unthinkable for utilities just a few years ago. But the trend took off when Xcel Energy realized it could pull out coal-fired power plants, build clean power plants, and make more profits while lowering electricity costs. The combination of a positive public perception, a broader price base, and greater appeal to sustainability-minded investors has made carbon-free commitments the rule, not the exception, for the automotive industry. public services.
“They are really trying to appease a nascent but quite powerful movement of [environmental, social and governance focused] shareholders and institutional investors, ”said David Pomerantz, executive director of utilities watchdog group Energy and Policy Institute, who monitors carbon targets. “Once it started to take off … it became difficult if a company does not have have a goal. “
There are, however, a few exceptions: the recalcitrant who did not promise to eliminate their greenhouse gas emissions. Some have promised to reduce emissions intensity, which allows them to continue to burn fossil fuels as long as they also build zero-emission power plants. Others haven’t even promised it. All prominently list sustainability information on their websites.
Here is the list of investor-owned electric utilities in the United States that have not made a commitment to phase out carbon emissions. It’s not a long list – it has become increasingly difficult to find utilities that haven’t made the commitment. But the list includes some of the biggest names in renewable energy development, showing that it is possible to invest big in renewables while hoping to burn fossil fuels for decades to come.
Few companies have played such an important role in promoting the clean energy transition as NextEra Energy.
Its deregulated arm, NextEra Energy Resources, leads the United States in the development of renewable energy and was the first to store batteries on a large scale at a time when few companies were building it. Sister company Florida Power & Light, that state’s largest regulated utility, downplayed coal production years ago. It produced 73.6% of electricity in 2019 from gas and 22% from nuclear, the rest from coal and solar.
But instead of a long-term carbon commitment, NextEra is committed to reduce its carbon emission rate 67% below 2005 levels by 2025.
All of the wind and solar power produced by its renewable energy development arm reduces the company’s net emissions rate. Since NextEra has made no commitments on absolute emission reductions, it could simply continue to burn the same amount of fossil fuels and rely on new renewables to continue reducing emissions intensity, even if the emissions themselves remain at the same level.
NextEra also acquired the utility company Gulf Power, which burned coal for almost half of its own production in 2019.
“The decrease in carbon intensity may have made sense at a time when we had a lot more time,” Pomerantz said, referring to scientific assessments of what is needed to keep global warming below 2 degrees Celsius. “Now you just have to stop burning carbon.”
The lack of specific absolute emissions commitments hasn’t stopped NextEra from building an outstanding reputation on Wall Street as a forward-thinking and environmentally friendly utility. It remains to be seen whether this reputation will suffer from a gap with the sector in the fight against carbon pollution. The company did not respond to requests for comment.
If it wants to tackle absolute carbon emissions, NextEra will have to deal with its gas fleet. Retaining it or building new gas plants creates a risk for shareholders in the event that the policy changes to carbon-free requirements during the payback period of these assets. Presidential candidate Joe Biden proposed a national clean energy standard pegged to 2035, which is not far in terms of the lifespan of a gas plant.
The New Orleans-based utility, which serves several southern states and operates a nuclear fleet, has no plans to stop emitting carbon. It expects, however, to reduce the intensity of emissions 50 percent below 2000 levels by 2030.
Entergy’s climate strategy focused on swapping old gas and coal power plants for new gas power plants. Any new gas plant built over the next decade could last another 30 years, well beyond the point where other leading utilities say they will eliminate carbon emissions.
Although the company refused to choose a “specific future supply plan”, its analysis of climate objectives illustrates a “solar replaces most coal” scenario that would achieve the 2030 target. The result is that renewables reach almost 7% of production, while natural gas provides 60%.
Berkshire Hathaway Energy
Warren Buffett’s subsidiary, Berkshire Hathaway Energy, owns several utilities in the Great Plains and the West, as well as several gas companies. The company has not announced a carbon reduction target because it says “the cutting edge technologies needed to reach the net zero targets do not exist,” according to spokesperson Jessi Strawn.
That said, BHE is investing $ 30 billion in renewable energy production across its portfolio, which already has a fairly clean profile.
The company says 43% of its owned and outsourced capacity comes from non-carbon sources. The MidAmerican Energy Company and PacifiCorp subsidiaries lead the regulated utilities for wind capacity. BHE Renewables operates 4.6 gigawatts in nine states.
Overall, however, coal dominated BBB production in 2018 at 41%, joined by 24% of gas, according to its latest sustainability report. Renewable energies delivered 32 percent.
With new investments, MidAmerican is expected to deliver 100% renewable energy to customers in Iowa next year, Strawn said. NV Energy has signed huge solar and battery contracts and needs to completely decarbonize under a new Nevada state law. PacifiCorp has a plan for build 4.3 GW of solar and batteries.
Structural factors can shield BHE from the investor pressure other utilities face to make large carbon reduction commitments. It’s just a fragment of the vast Berkshire Hathaway conglomerate, nestled among insurance companies, diamond suppliers and ketchup makers and the Nebraska Furniture Mart. Buffett personally controls 30.7% of the conglomerate’s voting rights and enjoys considerable investor confidence due to its long history of outperforming the market.
Then again, the mid-century goals don’t matter as much if the utility is decarbonating right now.
The Nova Scotia utility that could do it, Emera now has utilities in Canada, the United States and the Caribbean; its electrical anchor point in the United States is Tampa Electric, which serves nearly 800,000 customer accounts. President and CEO Scott Balfour has identified reducing greenhouse gas emissions as a key environmental priority. But that’s about it for the details.
Emera has reduction of greenhouse gas emissions by 24% since 2005 and reduced the share of coal in its production mix by 70%, starting in 2018. Tampa Electric has started working towards a cleaner grid, building a 600 MW, 850 million solar fleet. dollars and driving battery storage. An additional 600 megawatts of solar power are in the works. *
Oklahoma Gas and Electricity
This regulated utility serves more than 858,000 customer accounts in Oklahoma and western Arkansas. It has built or contracted for 814 MW of renewable energy, mainly wind turbines, and has converted part of its fleet from coal to gas. These actions have reduced its carbon dioxide emissions by more than 40% since 2005.
But the utility has not set a measurable long-term goal to maintain these future emission reductions; instead, it describes expectations, stating that it expects emissions to be 50% below 2005 levels by 2030.
“Between 2030 and 2050, OGE plans to withdraw 95% of its current fossil fuel production, cost-effectively meeting our capacity needs by replacing the withdrawn production with newer technology, including high-efficiency natural gas or a zero emission technology such as renewables or batteries. , according to the public service climate fact sheet.
If these expectations come true, OGE could achieve an exceptionally clean fleet. The question is whether the company has sufficient incentive to do so without formal commitment.
* Updated with more information on solar building.