With the world wobbling towards a post-COP 26 consensus that urgent action must be taken to halt global warming, Lynn Good CEO of Duke Energy is pointing the company towards a net-zero future.
“We delivered strong results in the third quarter and continue to execute on our clean energy strategy in a way that provides sustainable value to our customers, communities and shareholders,” said Lynn Good, Duke Energy chair, president and chief executive officer in the company’s 3Q21 earnings report. “Our net-zero emission goals are driving our investment strategy, long-term planning and operational execution and we are making significant progress on all fronts. Over the next decade, we have one of the largest growth capital investment plans in the country to build the infrastructure needed to support a clean energy future.”
Sustainability has long been a hallmark of Duke Energy as it was named to the Dow Jones Sustainable Energy Index for the 16th year running.
“Being recognized for 16 continuous years on the DJSI for North America is incredibly validating,” said Katherine Neebe, Duke Energy’s chief sustainability officer and president, Duke Energy Foundation. “It shows our clean energy transformation is delivering what many of our stakeholders expect. This underscores that our business success can also drive progress on important societal outcomes, like climate change and diversity, equity and inclusion.”
Highlights from the company’s environmental policies are its steady progress toward net-zero carbon emissions in 2050 and 2030 goal of reducing emissions by at least 50% from 2005 levels. Under Good’s leadership the company reached a 10,000MW renewable energy milestone in 2021 and is on track to reach 16,000 MW by 2025 and 24,000 MW by 2030. But Goode also emphasizes close collaboration with lawmakers in the company’s home state of North Caroline, where the company is based out of Charleston.
“We’ve been actively engaged with policymakers and stakeholders across the Carolinas for several years to chart a path toward cleaner energy,” said Good in a conference call with analysts. “Our 2020 IRPs filed in both states reflect our goal to pursue an orderly energy transition, achieving aggressive carbon reduction while maintaining affordability and reliability.”
The inauguration of two new renewables plants, the 182 MW Maryneal windfarm and the 144 MW Pflugerville solar plant in Texas has underscored Good’s determination to bring the company to the forefront of the energy transition.
“It’s been one year since we hosted our first ESG Investor Day where we laid out several targets in our path to net zero carbon and methane emissions,” Good told investors. “We’re making meaningful progress across these goals while also
advancing social responsibility and corporate governance work. We exceeded 40% carbon reduction across the enterprise in 2020, and we continue to accelerate coal retirement and add significant amounts of renewables to our system. Our path to net zero is underpinned by strong governance, collaboration with stakeholders and a culture rooted in diversity, equity and inclusion.”
Duke Energy consists of three complementary businesses with strong growth opportunities. The largest of these is an electric utilities and infrastructure division with a presence in Florida, North Carolina, South Carolina, Kentucky, Ohio and Illinois contributing 86% of EPS. The company also has a smaller gas utilities and infrastructure company which accounts for 9% of EPS contribution, as well as a commercial renewables operation which contributes 5% of EPS.
The company now has a $59 billion capital plan focused on the clean energy transition. Key measures envisioned in the plan are accelerated coal plant retirements, grid investments to enable renewables and energy storage, resiliency and dynamic power flows and finally the adoption of a mix of energy storage, solar and nuclear energy.
“We continue to work with stakeholders at federal, state and local levels to make this clean energy vision possible while maintaining reliability and affordability for customers,” noted Good. “In South Carolina, we filed a modified IRP at
the end of August, incorporating feedback from the Public Service Commission and demonstrating further progress toward cleaner energy. The plan includes a balanced resource mix, expanding renewable generation storage, retiring coal and achieving significant carbon reductions.”
Another innovation made towards Good’s goal of carbon neutrality has been its new Sustainable Financing Network, which defines the investment areas aligned to the company’s clean energy strategy, enabling it to issue green and sustainability bonds, as well as other green loans and financing instruments.
“We’re committed to a clean energy future for our customers and communities,” said Lynn Good, Duke Energy’s chair, president and chief executive officer. “Our long-term investment strategy is part of the solution and will provide sustainable environmental, social and customer benefits as we work to achieve our net-zero goals.”
Eligible projects include renewable energy, energy efficiency, advanced grid technology, and expanded opportunities for diverse suppliers and small businesses. Duke Energy has issued $2.3 billion of green bonds since 2018.
“Our climate goals are driving our investment strategy and long-term planning and we continue to make progress on all fronts. We have a clear line of sight to achieving our 2030 goals,” said Good. “Over this decade, we will deploy one of the largest capital investment plans in the country focused on building clean energy infrastructure investments that will benefit the environment, our customers and communities and our investors.”
Good had a baptism of fire in environmentalism on Super Bowl Sunday 2014 when a spill of coal ash forced her to pull out all the stops and battle for the environmental remediation of the damage and the company’s image as a newly named CEO.
“Suddenly, it was all about crisis management,” she told the financial press in the aftermath. “It’s something that never should have happened. That’s not what Duke Energy is about.”
Her leadership during the crisis had a major business magazine wondering nine months later, “Is Lynn Good the smartest (new) CEO in the energy industry?”
But Duke Energy under Good’s leadership is not all about sustainability. The company boasted a net income of $1.4 billion in 3Q21 driven largely by the company’s extensive utilities business generating earnings of $1.4 billion. The company reaffirmed a long-term adjusted EPS growth rate of 5% to 7% through 2025.
“We are well-positioned to deliver results within our narrowed guidance range of $5.15 to $5.30, and reaffirm our long-term EPS growth rate of 5% to 7% through 2025, based off our original 2021 guidance range,” explained Good to investors.
The company also notes that it now has 15 consecutive years of dividend growth, starting in 2007 and is chasing a 65%-75% long-term target dividend payout ratio.
Duke Energy also committed nearly $250,000 this October to combat hunger in South Carolina, distribute 4200 food packages to needy families as well as donating $170,000 in grants to 14 organizations in southwest Ohio and northern Kentucky for local wildlife conservation, healthy habitats and environmental projects and programs to help communities protect their natural resources and mitigate the effects of climate change.
With climate change turning the eyes of the world on the energy sector Duke Energy’s leadership in sustainability looks like a winning bet.
