Amid Depressed Power Demand, Duke Sticks to Plan to Double Renewables Base
Duke Energy is standing behind its plan to double its renewable energy base to 16 gigawatts by 2025 despite the depressing effect the coronavirus outbreak is having on its utilities.
Duke's first-quarter income from its utilities business fell, and the results don’t reflect the full impact of the COVID-19 stay-at-home and business closure orders, CEO Lynn Good said on a Tuesday conference call.
In April the picture darkened further: Duke's total electricity sales fell 5 percent, dragged down by a 12 percent slide in demand from industrial customers that was only partially offset by higher-than-usual residential sales.
Utilities across the country are reporting dramatic drops in commercial and industrial energy demand. Many are also absorbing the costs of continuing to serve residential customers who can’t pay their bills due to unemployment or sickness. Duke is among the largest U.S. power utilities, with 7.4 million electric and 1.4 million natural-gas customers across six states in the Southeast and Midwest.
Despite near-term headwinds, Duke stood behind its long-term plan to reach net-zero emissions by 2050, starting with a target of 50 percent greenhouse gas reductions by 2030. The utility group's plan to double its current 8 gigawatt fleet of renewables by 2025 is a big part of meeting those goals.
While renewables only account for 5 percent of Duke's 51 gigawatts of generating capacity today, its solar and wind portfolio has grown in recent years. Duke Energy Renewables, the company’s renewable energy development arm, owns projects in 19 states as far afield as California, competing with heavyweight developers like NextEra Energy and Avangrid.
In its home state of North Carolina, where state law allows Duke’s regulated utilities and its renewable development arm to compete against third-party independent power producers to supply solar power, the utility contracted 600 megawatts of solar last year and is bidding for 600 megawatts more this year, Duke spokesperson Randy Wheeless told GTM.
In Florida, a state that allows utilities to build their own solar power plants , Duke has about 300 megawatts of solar operating and another 200 megawatts under construction, part of a plan to reach 1,500 megawatts by 2028.
Coronavirus a "wild card"
Though the company does not currently expect the coronavirus pandemic to upend its renewable expansion plans, Duke is among numerous utilities and renewables developers grappling with a vast amount of uncertainty as the virus unfolds. “The goals we set, we still feel good about, but obviously the coronavirus is such a wild card [that] it could definitely change that,” Wheeless acknowledged.
The company is also dealing with the need to curtail solar generation amid lower-than-expected demand from large industrial and commercial customers, although so far the utility has only been forced to...