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Duke CEO: US investor-owned utilities leading the way to a low-to-no CO2 economy

SNL Image

Lynn Good, chairman, president and CEO of Duke Energy, on stage with NARUC President Nick Wagner at NARUC's Summer Policy Event on July 22, in Indianapolis.
Source: EEI

America's investor-owned electric utilities are already on track to meet the carbon dioxide emissions cuts called for by the Paris Agreement on climate change, Lynn Good, chairman, president and CEO of Duke Energy Corp., told state regulators at their summer conference.

However, to achieve a low-to-no-carbon economy by 2050, Good said the U.S. needs to not only preserve its fleet of aging nuclear power plants but also fund the research and development of various breakthrough technologies.

Speaking at the National Association of Regulatory Utility Commissioners' summer conference July 22 in Indianapolis, Good praised investor-owned utilities for their "underappreciated" achievement of reducing their carbon emissions 27% since 2005. "All of that work has been done based on economic decisions without federal mandates and with affordability in mind," Good maintained.

Good, who recently completed a one-year term as the chairman of the Edison Electric Institute, or EEI, said almost every one of EEI's members, including Duke, now has goals to reduce CO2 emissions on average 50% by 2030. Those targets would not only be achieved "faster" than those set by the stayed Clean Power Plan, or CPP, Good said, but also ensure that the U.S. power industry is doing its part to help limit global warming to a two-degree C rise as called for by the Paris Agreement.

The Obama-era CPP aimed to cut power-related CO2 emissions 32% by 2030 from 2005 levels. The U.S. Environmental Protection Agency projects that the CPP's replacement, Affordable Clean Energy rule, will cut CO2 from the power sector by "as much as" 35% by 2030. However, nearly all of those reductions would come from a continued shift away from coal-fired generation toward cheaper sources, such as natural gas and renewables, and many studies forecast emissions will actually increase under the less-stringent Affordable Clean Energy rule.

Under the Paris Agreement, the U.S. had pledged to cut economywide greenhouse gas emissions by 26% to 28% below 2005 levels by 2025. Nearly half of U.S. states remain committed to the accord despite President Donald Trump's intention to withdraw the U.S. from it. So far, seven states have implemented mandates for 100% renewable or carbon-free electricity mixes by mid-century, with the latest being Maine and New York.

Good said a number of EEI's members are looking beyond 2030 and discussing how much they can accomplish by 2050 and if they can achieve a low-to-no-carbon economy. "It puts our industry in the conversation about what it is going to take to get to deep carbon reduction," she said.

With the continued absence of a "comprehensive" energy policy at the federal level, Good said the energy industry's vision of the future continues to be shaped at the state level through stakeholder engagement processes. While doing so can feel like grueling "sausage-making" at times, Good said engaging with a broad set of open-minded stakeholders is the best way to decide the best path forward. Once a compromise is struck and a clear vision is set, utilities like Duke can lead and implement that vision, she said.

Along with expanding renewables and battery storage and retiring coal-fired power plants, Good said keeping existing nuclear reactors running is imperative. She noted that Duke has 11 reactors in the Carolinas and half of the power in the Carolinas comes from carbon-free nuclear. "We will not get to [our] carbon-reduction goals if we cannot keep those carbon-free resources working. So we're an advocate of second-license renewals," Good said.

SNL Image

Lynn Good, chairman, president and CEO of Duke Energy Corp.
Source: Duke Energy

The U.S. Nuclear Regulatory Commission has granted 20-year operating license extensions beyond initial 40-year terms to 94 reactors, including four reactors that have since permanently shut down. According to the NRC, six of the nation's 97 operating reactors have applied for a second license renewal to extend their operations to 80 years.

Duke is also an R&D advocate, Good said, especially because the utility believes undiscovered or underdeveloped energy technologies are needed to achieve deep decarbonization by 2050. Such breakthrough technologies might include small modular reactors, carbon capture technology and innovative batteries, Good said. Between baseload reactors and intermittent solar and batteries, Good recognized that there is an R&D opportunity to find a new energy technology "to sit in the middle, that's load-following [and] carbon-free."

"Investment in the energy delivery system and the natural gas pipeline delivery system is [also] essential to meet carbon goals," Good added.