PPL expects sharp decline in coal fleet by 2050
- An assessment of climate exposure prepared by the utility company for PPL Corp. investors predicts a large decline in carbon dioxide emissions by 2050 will be driven by market forces, not in response to regulations or law. The climate report comes as the Trump administration seeks to prop up aging coal and nuclear plants through a rulemaking proposed by the Energy Department.
- PPL's Kentucky utility companies own power plants, with coal making up 64% of its generation last year. Carbon dioxide emissions from Kentucky generation assets are expected to decline between 45% and 90% from 2005 levels by 2050, according to the report. And that means PPL could see coal making up only 10% of its power fleet by 2050, assuming a 55-year timeline.
- The actual reduction in carbon emissions will depend on the mix of gas and renewable energy used to replace retiring coal capacity. PPL's shift away from coal follows a broad industry trend: Since 2005, more than 100 GW of coal-fired generation has been retired after an average operating life of 52 years.
PPL's climate report is indicative of several trends, including the decline in coal power and a growing interest in sustainable corporate strategy on the part of both shareholders and executives. And for PPL investors, the news appears positive.
Kentucky has no renewable portfolio standard. While the national Clean Power Plan has been rescinded, company leadership say they can't predict what future legal requirements may be put in place. However, officials say PPLS's expected carbon dioxide reductions by 2050 could satisfy possible requirements to limit the global temperature increase to no more than 2-degrees Celsius.
The report compares three scenarios for potential emissions reductions: one with no new regulations in place; one with targets consistent with the Clean Power Plan; and a scenario consistent with limiting the global temperature increase to no more than 2-degrees Celsius by 2100.
"Any way we look at it, we expect emissions to decline sharply by 2050," said William Spence, chairman, president and CEO for PPL. "And in the long run, that supports efforts to advance a cleaner energy future."
The carbon focus is on PPL's Kentucky utilities, Louisville Gas & Electric Co. and Kentucky Utilities Co., which serve 1.3 million customers between them. PPL's operating units in Pennsylvania and in the U.K. do not own generation.
LG&E and UK own about 8,100 MW of capacity in addition to delivering electricity and natural gas, and the retirement of coal-fired units mirrors the national trend. In 2015, PPL’s Kentucky utilities retired 800 MW of coal capacity and completed construction of a new natural gas, combined-cycle unit. In 2016, the two utilities also completed a 10 MW universal solar facility. LG&E and KU also completed a multi-year, $2.8 billion project to add environmental controls at four of the company’s coal-fired plants.
In November, the two utilities announced plans to retire two coal units totaling 272 MW in the first quarter of 2019. Brown 1 began commercial operation 1957 and has a generation capacity of about 106 MW. Brown 2 began commercial operation in 1963 and has a capacity of about 166 MW.
Follow Robert Walton on Twitter