Utility decarbonization commitments move pretty fast. If you don’t stop and look around once in a while, you could miss them.
Case in point: One week ago, GTM published a list of the major investor-owned utilities that had not committed to eliminating carbon emissions. Given all the commitments announced over the last few years, we could only find five holdouts, one of which was Entergy.
But Entergy pulled itself off the list with an announcement made Thursday pledging net-zero emissions by 2050.
The company, which controls regulated utilities serving 2.9 million customers across the Gulf region and an 8-gigawatt nuclear generation fleet, first promised to cap greenhouse gas emissions in 2001 and has since enhanced its goal multiple times. Most recently, it promised to lower its emissions intensity 50 percent below 2000 levels by 2030.
But such a goal does not require the hard work of deep decarbonization; as long as the oldest and dirtiest plants are shut down, it allows emissions to continue. Peer utilities moved forward with pledges to eliminate carbon emissions entirely or achieve a net-zero target, which allows some emissions along with offsets.
Now Entergy is part of that pack (the biggest holdouts remaining are NextEra Energy and Berkshire Hathaway Energy). Its particular approach to fulfilling that mission follows from the makeup of its fleet.
In an analyst presentation Thursday, COO Paul Hinnenkamp cautioned that renewables alone cannot ensure reliability around the clock, adding that energy storage is not ready to fully meet reliability needs. But Entergy will increase renewables while tackling its biggest emitters and retaining a sizable gas fleet.
Coal on its way out
First on the chopping block is the remaining coal fleet, which provided less than 5 percent of the company's revenue in 2019. Entergy plans to retire the rest by the end of 2030.
“Not only are there compelling reasons to shut down coal from an environmental perspective, it’s also compelling from an economic perspective, which is in the best interests of our customers,” Hinnenkamp said.
The utility is also “very committed” to growing its renewables fleet, and has partnered with powerhouse developer Invenergy to co-develop projects across the Gulf region. The company has already allocated $1.4 billion for renewable investment, and that could reach 4 or 5 GW by 2030, though it could be higher. Currently, it counts just 561 megawatts in service, with another 425 MW in progress.
Entergy's roadmap starts with retiring all coal and most legacy gas assets, then ramping zero-carbon generation and firm capacity.
Gas remains the favored resource for capacity through 2030, but Entergy will slim down its pre-2000 gas fleet. Once utilities commit to zero emissions, the next battle with clean-energy advocates revolves around how much new gas capacity utilities should build between now and their target dates. Hinnenkamp offered a preemptive defense of new gas investment.
“We are building highly efficient, state-of-the-art assets,” he said. “These will not be stranded assets. We are designing into these optionalities.”
That optionality could mean burning emissions-free hydrogen or capturing and sequestering emissions, neither of which is in widespread commercial use right now. But Entergy has partnered with Mitsubishi Power to blend hydrogen into the gas mix at its plants.
As part of its hydrogen strategy, Entergy could convert an underground gas storage facility in Texas to hold hydrogen. That facility already sits near a hydrogen pipeline network, which runs within a few miles of a proposed gas plant; Entergy proposed a design for the plant that would burn 30 percent hydrogen when it begins commercial operation.
Entergy could tap its nuclear fleet to produce carbon-free hydrogen through electrolysis, a potential lifeline to baseload generators under competition from low-cost, flexible generation derived from gas and renewables.
“We are well positioned to act on the potential for the hydrogen economy,” Hinnenkamp said.
The exact portfolio will depend on navigating regulatory approval while balancing cost and reliability, as grid technologies evolve over the coming decades. But the long-term vision to net out carbon sets a new framework to guide Entergy’s investment from here on out.
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