More Utilities Betting on Renewables

November 13, 2017


Motley Fool:

American Electric Power (NYSE:AEP), who generates nearly half of its electricity from coal, says it will invest $1.8 billion in renewable energy by 2020. That’s only about 10% of its total capital spending, but it’s a transition other utilities have already begun.

In a press release discussing its future investments, AEP said it will invest $1.8 billion in renewable energy between 2018 and 2020, which seems small compared to its $18.2 billion capital spending plans. But if you pull out $4.4 billion in investment for distribution systems and $9 billion for transmission assets you see that only $3.0 billion will be allocated to fossil fuel generating assets.

The 2018 to 2020 plan is also on top of a $4.5 billion investment in the 2,000 MW Wind Catcher project in Oklahoma, which will be the world’s second-largest wind farm. In total, AEP will spend more on building/buying renewable energy assets than fossil fuels in the next few years.

A shift is happening at U.S. utilities

The transition to renewable energy is happening because utilities see the economics of wind and solar energy as too good to pass up. And they’re putting billions into building their renewable energy businesses.

Duke Energy has 2,300 MW of wind power and 600 MW of solar, investing $4 billion in renewables since 2007. It’s even investing in battery storage as a new generation of grid asset.

NextEra Energy’s subsidiary NextEra Energy Resources says it is the world’s largest generator of electricity from the wind and solar. On top of that, the company has a controlling interest in NextEra Energy Partners (NYSE:NEP), one of the biggest renewable energy yieldcos in the world.

AES has taken a leadership position in energy storage through a partnership with Siemens called Fluence. This is on top of 25% of its power generation portfolio coming from renewable sources.

Southern Company is another to make the surprise move to renewable energy. After leading the charge into “clean coal” and nuclear power, Southern Company has made an about-face and added 4,000 MW of renewables in the last five years.


3 Responses to “More Utilities Betting on Renewables”

  1. andrewfez Says:

    The WV offshoot of AEP has let it be known that there will be no more new coal burning. It’s customers, including Koch Industries, are asking for sustainable energy going forward as they believe a carbon tax is inevitable. Further, places like Google won’t set up shop in dirty energy parts of the country and Appalachian Power is sensitive to such.

    “This isn’t an issue of pollution controls, however; Customers and economics are driving today’s energy agenda. Beam says the debate over climate change, and the role of coal in it, is essentially over. Appalachian Power’s parent company AEP believes the regulation of carbon dioxide is inevitable. In the coming decades, renewable energy and natural gas are poised to dominate the fuel mix. “We’re past that argument as a company,” Beam said.”

  2. neilrieck Says:

    In the following article article from Sept-2017 we read: “Every hour, China installs at least one wind turbine and enough solar panels to cover a football pitch”

    So when inexpensive energy is combined with lower wages, does anyone think manufacturing will be coming back to to the West?

  3. Jerry Falwel Says: shows there has been no pause in CO2 rise which means something. If the estimates of total CO2 emitted by man were flat than the CO2 emitted by man is simply numerically wrong in the estimates or the claimed connection between mans CO2 output and stratospheric CO2 are simply wrong, take your pick.

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