American Electric Power (AEP) is changing its energy strategy to increase investment in grid efficiency, add renewables, upgrade transmission and distribution, and drastically cut carbon dioxide emissions from its power plants. The Columbus, Ohio-based utility says the move was driven in part by customer demand.
“Our customers want us to partner with them to provide cleaner energy and new technologies, while continuing to provide reliable, affordable energy. Our investors want us to protect their investment in our company, deliver attractive returns and manage climate-related risk,” Nicholas K. Akins, AEP chairman, president, and CEO said publicly about the shift. “This long-term strategy allows us to do both.”
AEP is one of the country’s largest electric utilities, serving nearly 5.4 million customers in a service territory that covers more than 400,000 square miles. This week the utility announced plans to add 3,065 MW of solar generation and 5,295 MW of wind generation to the portfolio serving its regulated utility customers by 2030. The company also says it will invest around $1.2 billion in contracted renewables and renewables integrated with energy storage between now and 2020.
Over the next three years, AEP plans to put nearly $13 billion into improving its transmission and distribution. Currently the utility has more than 40,000 miles of transmission lines and approximately 224,000 miles of distribution lines.
The new business strategy should help AEP reduce carbon dioxide emissions from power plants 60% by 2030 and 80% by 2050, based on 2000 levels, the utility says. Looking at its generation capacity, AEP went from 70% coal-fueled in 2005 to 47% in 2018. Natural gas rose from 19% in 2005 to 27% today while renewable generation capacity went from 4% in 2005 to 13% now, according to the company.
The utility’s largest planned renewable energy investment is in the Wind Catcher Energy Connection project in Oklahoma, which is pending approval. This $4.5 billion, 2,000-MW wind farm will become the largest contiguous one in the country if it gets the green light. The project’s president and CEO recently met with community members and landowners in Oklahoma. AEP also plans to build several large solar arrays in Ohio, the Columbus Dispatch noted.
“This transition to a more balanced resource portfolio will help mitigate risk for our customers and shareholders alike, and ensure a more resilient and reliable energy system into the future,” Atkins said.
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