Quarterly report shows Duke Energy’s shift away from coal

From its purchase of Piedmont Natural Gas, to its effort to replace the Asheville plant with gas-fueled generation and its ongoing cleanup of old coal ash sites, Duke Energy (NYSE:DUK) is continuing its shift away from coal-fired power.

Duke Energy, which reported quarterly earnings on Nov. 4, is not unique among utility-holding companies in this regard, nor its recent efforts to put more emphasis on regulated utility operations.

Duke closed the Piedmont deal in early October and it should help Duke’s transition into a cleaner fuel fleet, said Duke Energy Chairman, President and CEO Lynn Good in a conference call with financial analysts.

“The recent closing of our Piedmont Natural Gas acquisition, complemented by the announced sale of our international business, advances our portfolio transition and positions us as a premier regulated energy company,” Good said during the call.

Good noted that the sale of assets in Brazil and Latin America largely completes Duke’s transition towards a domestic infrastructure business.

Duke’s infrastructure business capital spending is largely divided between transmission and distribution infrastructure and its efforts to reduce carbon output of its generation.

Coal will only be 23% of Duke Energy fleet in 2030

Duke currently estimates that in 2030 only 23% of its power generation across the United States will come from coal. That’s compared to 58% in 2005.

Duke Energy estimates an additional 34% decrease in coal generation and a 25% increase in natural gas generation between 2015 and 2030, according to Duke’s slide materials.

The natural gas share of Duke’s generation was only 8% in 2005, but will reach 35% by 2030. Wind, solar and hydroelectric accounted for only 2% of the generation mix in 2005 but should grow to 10% in 2030. The percentage of nuclear energy at Duke is projected to be 32% in 2030 – which is the same percentage as 2005.

Duke’s carbon intensity is going from 1.29 lbs/kwh in 2005 to 0.77 lbs/kwh in 2030.

When it comes to cleaning up old coal combustion sites, coal ash costs will be recovered over a 15-year period in South Carolina under a settlement, Duke reported.

In addition, North Carolina’s HB 630 was signed into law in July It includes a requirement to provide access to permanent, alternative water supplies to power plant neighbors within a half-mile of affected North Carolina coal plants by Oct. 15, 2018

Meanwhile, Good said that site preparation is underway for the $1.1bn Western Carolinas Modernization project, which includes plans for two 280-MW combined cycle natural gas-fired generation facilities and new transmission infrastructure. The project should be completed in 2019.

Duke Energy is also seeking a state certificate a 21-MW combined heat and power (CHP) plant at Duke University. The CHP is an estimated $55m capital project.

Duke officials also noted that the $600m Lee combined-cycle natural gas power plant under construction in South Carolina should be in operation late in 2017.

In other matters:

  • Good also praised Duke’s staffers who “managed through two major hurricanes this fall.”
  • During the past quarter, Duke achieved record generation at Catawba and McGuire nuclear units in the Carolinas and the Edwardsport IGCC coal gasification plant in Indiana.
  • Duke Energy will soon be doing its financial reporting under three major headings: electric utilities and infrastructure; gas utilities and infrastructure, and; commercial Renewables.
  • Third quarter 2016 GAAP reported diluted earnings per share (EPS) were $1.70 compared to $1.35 for the third quarter of 2015.

https://news.duke-energy.com/releases/duke-energy-reports-third-quarter-2016-financial-results?_ga=1.97724503.974903521.1476194011

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.