AEP CEO: We’re Moving to a Clean Energy Economy, Regardless of Trump’s Paris Accord Withdrawal
President Trump said he’s pulling America out of the Paris climate accords because the deal was bad for business. Business leaders have other ideas.
Over the weekend, American Electric Power — a utility that produces more coal electricity than any other U.S. power company — strongly affirmed the clean energy transition.
Coal’s market share is changing for several reasons, AEP President and CEO Nicholas Akins told NPR this weekend.
“Our investors certainly expect us to really focus on sustainability and de-risk our business,” he said. “So we continue to focus on that. Secondly, from a customer standpoint, there’s an expectation that we move to that cleaner energy economy.”
After years of market dominance, coal is facing a bevy of new competitors. Any new coal generation must be weighed against cheaper natural-gas generation and the declining costs of renewables, Akins noted.
Faced with that competition, 89 gigawatts of coal capacity — a quarter of the U.S. coal fleet — has either shut down or been slated for retirement since 2010.
AEP’s resource plan for the next few years calls for new wind and solar generation backed up by flexible natural gas.
“We still believe that coal should remain a part of the portfolio, but certainly, a smaller part of the portfolio, so that we can manage risk and have multiple sets of solutions available to us,” Akins explained.
Risk management is crucial to understanding Akins’ approach to fuel mix. He’s not opposed to using coal as a fuel. It just carries certain risks that competing fuels don’t.
Coal plants are getting more expensive to build, whereas renewables keep getting cheaper. A new coal plant today would cost upward of $4 billion, Akins said.
“That’s a lot of capital, because you’re not only building the generation facility itself, but you’re building all of the environmental equipment attached to it, which is substantial,” he said. “It actually is a chemical factory that happens to produce electricity.”
AEP was ranked as the largest emitter of carbon dioxide among U.S. power companies in a 2016 report by environmentalist and utility industry groups. Akins is not coming at this as an idealist. His reasoning for predicting a continued decline in coal investment draws entirely on market data: consumer and investor sentiment, fuel costs and pricing trends.
Read full article at GreenTech Media