In 2018, when Xcel Energy became the first large U.S. utility to pledge to get to net-zero carbon dioxide emissions, I wondered how long it would take for those kinds of commitments to become the industry standard.
The answer, as we learned in recent days, is “less than two years.”
Ameren and Entergy each issued plans to get to net-zero emissions by 2050, joining a list of some of their largest peers like Duke Energy and Dominion Energy.
Also, Vistra Energy, the country’s largest independent power company that is not a utility, released a plan this week to get to net-zero by 2050 and said it would close all seven of its Midwestern coal-fired power plants by 2027.
Each of the corporate announcements demonstrate that the transition to clean energy is accelerating. Taken together, they make clear that we are in the middle of great change in the energy economy in which electricity producers have concluded that they can save money and reduce risks by investing in wind, solar and energy storage, and by closing fossil fuel plants.
“What we’re seeing here is just how quickly the economics are changing on renewables,” said Brad Klein, a senior attorney for the Environmental Law & Policy Center in Chicago.
Ameren’s announcement is significant because the St. Louis-based utility is one of the most coal-dependent in the country. The company emitted 1,639 pounds of carbon dioxide for every megawatt-hour generated in 2018, which was one of the highest emissions rates of any utility in the U.S., according to M.J. Bradley and Associates, a research firm.
“Under our plan, customers will receive significant benefits from advances in technology and falling renewable energy costs, as well as from robust energy efficiency programs to help keep their energy costs affordable,” Marty Lyons, chairman and president of Ameren Missouri, said in a statement.
But this is not a quick shift from coal to renewables. Ameren says it will gradually reduce its use of coal, starting with a plant closing in 2022 and continuing until the final plant closes in 2042.
The slow timetable is a problem for environmental advocates who otherwise are excited to see Ameren commit to net-zero emissions.
“It’s encouraging but there’s more that can be done,” said James Owen, executive director of Renew Missouri, a renewable energy advocacy group. “They’ve made incredible strides, especially in the last few years.”
One of his big concerns is that Ameren is planning to operate the Rush Island coal-fired power plant, with capacity of 1,178 megawatts, until 2039. The good news is that before Monday’s announcement, Ameren had set no retirement date for the plant, but Owen sees 19 years as way too long to wait, considering the urgency of addressing climate change.
Ameren can afford to wait because, as a regulated utility, it can recover its costs from customers without needing to compete in the market. The regulators get to decide which costs are prudent.
Entergy, based in New Orleans, announced its net-zero plan last week. Compared to Ameren, Entergy has a relatively small hill to climb, with a power plant fleet dominated by nuclear and natural gas, and only a little coal. Nuclear has no carbon emissions and natural gas plants emit less carbon than coal plants.
Entergy says it will close some of its older natural gas plants and build some new gas plants that are more efficient. The company is far from alone in pursuing a net-zero plan that includes building new gas plants, a tendency that environmental groups say is incompatible with the goal.
Owen said that getting utilities to commit to net zero is a good start and that the next steps will be to work with the companies and state regulators to try to make the companies pick up the pace and avoid investments in gas plants.
“They can still be pushed to do better,” he said, speaking about Ameren, but he might as well have been talking about any of the large companies in the early stages of net-zero plans.
Which Big Utilities Have Net-Zero Plans and Which Don’t?
Now that Ameren and Entergy have issued net-zero plans, that leaves a dwindling number of large electricity utilities that have not made similar commitments.
To spot the laggards, I looked at the 20 largest electricity generating companies in
M.J. Bradley and Associates’ most recent report on benchmarking utilities’ emissions. After excluding government-owned companies like Tennessee Valley Authority, and electricity generating companies that are not utilities like Vistra (I’ll have more to say about Vistra down below), that leaves the 13 largest.
Seven of the companies have commitments or goals to reach net zero by 2050. Three others fall just short, with plans that would get close to net zero by that date.
Chicago-based Exelon is in a category of its own because it generates nearly all of its electricity with nuclear power, so it has very low emissions, but it hasn’t made a clear statement committing to get to net zero.
Only one large utility is both a substantial carbon emitter and has no company-wide commitment or goal for deep decarbonization: Berkshire Hathaway Energy in Iowa.
I’ve written a lot about Berkshire Hathaway subsidiaries like MidAmerican Energy in Iowa and Rocky Mountain Power in the Mountain West, including the companies’ expanding use of renewables and how Rocky Mountain Power wants to close most of its coal plants.
At least so far, Berkshire Hathaway is taking many steps toward big reductions in emissions, only doing it without having a plan that states a long-term goal.
Jessica Strawn, a Berkshire Hathaway spokeswoman, said one reason for the company’s lack of a net-zero commitment is that the technologies do not yet exist to get all the way to net zero. Several other large utilities, including Xcel, have also said that the transition to net zero will require technologies that do not yet exist, but they have still adopted net-zero goals or plans.
“We recognize there is more to do, and we are well on our way,” Strawn said.
Another outlier is NextEra Energy of Florida, which has a plan calling for a 40 percent cut in carbon emissions from 2005 levels by 2025, but is unusual in that it has no company-wide commitment beyond 2025. I asked NextEra about this and they referred me to recent comments from CEO James Robo.
“We believe that no company in any industry has done more to reduce carbon emissions and to confront climate change than NextEra Energy,” Robo said in a recent letter to shareholders in which he reiterated the 2025 commitment.
But my aim here is not to focus on the companies whose plans lag the others in terms of long-term commitments. The point is that it is now unusual for a large U.S. utility to not have a long-term plan, and that says a lot about how this sector has changed in just the last two years.
Vistra, the Huge Electricity Provider You Probably Haven’t Heard of, Announces a Net-Zero Plan
Some of the country’s largest power plant owners are not utilities. In industry-speak, they are “independent power producers,” which means they sell electricity on wholesale markets and are mainly regulated on the federal level, as opposed to utilities that are mainly regulated by the states and sell power directly to households and businesses.
Texas-based Vistra Energy is not a household name but it is the country’s largest independent power producer in terms of electricity produced and its plants emit more carbon dioxide than any other U.S. power producer, including utilities.
And now Vistra is committing to get to net-zero emissions by 2050.
But that was only part of the company’s announcement on Tuesday. Vistra also said it will close all seven of its coal-fired power plants in Illinois and Ohio by 2027, leaving just three coal-fired plants in its portfolio, all in Texas.
The company had previously announced it would close the Edwards plant in Illinois by 2022, but the plans for the other six—with combined capacity of more than 6,200 megawatts—were new this week. The Sierra Club says this is one of the largest coal plant retirement announcements in history.
“Overall they see the writing on the wall,” said Neil Waggoner, Ohio director for the Sierra Club’s Beyond Coal Campaign, about Vistra. “They know these plants don’t make financial sense and they know these plants won’t make financial sense any time in the future.”
His campaign has pushed for coal plants to close and has called for states to plan for helping workers and communities that are hurt by the transition away from coal. He said Ohio has been flat-footed in its response for years, and he hopes that state officials get their act together ahead of this next wave of closings.
Vistra announced the changes as part of what it described as a “pivot to invest in clean energy and combat climate change.”
But the company also made clear that the pace of the coal-plant closings was driven by a market in which the plants cannot compete.
And that might serve as a good summary of what’s happening across the electricity sector as companies make decisions based on economics that just happen to be good for the climate.
California Bans New Gasoline Vehicles as of 2035, and the Trump Administration Responds
California Gov. Gavin Newsom issued an executive order last week banning the sale of new gasoline-powered cars and trucks by 2035, a big step toward reducing emissions in the transportation sector.
I wrote about it on the day it happened, including comments from experts who expected a quick rebuff from the Trump administration. California is the first state to set a timetable for moving away from gasoline vehicles, joining about a dozen countries including France and the United Kingdom.
A week later, we have some idea of what the administration’s response will be, thanks to a letter to Newsom from Andrew Wheeler, the U.S. Environmental Protection Agency director.
Wheeler wrote that the order “raises serious questions regarding its legality and practicality” and noted the recent history of the EPA denying a waiver for California to set its own tailpipe emissions rules, a dispute that now is in federal court. Wheeler said the order banning gasoline vehicles may also require a waiver from EPA.
None of this response is surprising, but what struck me was the dismissive tone of the letter, with lines like this:
“Beyond the significant questions of legality and the fact that consumer demand for the type of vehicle you would mandate has never met the aspirations of California’s political leadership, your state is already struggling to maintain reliable electricity for today’s demands,” Wheeler wrote.
In tone and substance, Wheeler’s comments were almost indistinguishable from the response of the fossil fuel industry to Newsom’s plan, which is a reminder of Wheeler’s recent past as a lobbyist whose clients included fossil fuel companies.
Wheeler’s reaction is one of many reminders of the stakes in the November election. The Trump administration has chosen to fight with California over the state’s attempts to regulate its own emissions, while a potential Biden administration is likely to support the state’s actions.
Jesse Melgar, Newsom’s press secretary, offered this response to Wheeler’s letter:
“While the Trump Administration tries to drive this country off a climate cliff, California is once again assuming the mantle of leadership in the fight against climate change,” he said. “We aren’t going to back down from protecting our kids’ health and the air they breathe.”
An earlier version of this article incorrectly stated that Entergy is based in Jackson, Mississippi. The company’s headquarters is in New Orleans.
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