Ameren gets set to transform into a clean energy machine
Having reached its carbon-reduction Paris Agreement objectives five years early, Ameren Corp. has decided to upgrade its carbon emissions plans, going net-zero CO2 company-wide by 2050 and expanding solar and wind generation — goals aimed at essentially transforming the utility into a clean energy machine.
Ajay Arora, vice president of power operations and energy management at Ameren Corp., said perfect timing basically helped spur the upgraded plans.
“The time is right in terms of renewable energy becoming affordable and our coal-side energy centers becoming older and trending toward reaching the end of their useful life,” Arora told Daily Energy Insider in a recent interview. “When you combine those, there are pretty significant cost savings that can be obtained for the benefit of our customers.”
Such a transition, Arora added, would have had to be done anyway once the company’s coal plants are retired. “But we can start that now, and do it in a manner that is affordable, which is one of the key things our plan now drives,” he said.
Ameren’s net-zero plans and expanded solar and wind generation will be accomplished while maintaining reliability and affordability for customers, Arora said, pointing to the Integrated Resource Plan (IRP) of Ameren Missouri, a triennial filing that outlines the division’s plan to transform its electricity generation portfolio over the coming decades.
Specifically, the IRP relies on the investments Ameren is making to modernize its electric grid through its Smart Energy Plan to bolster reliability and provide more opportunities for customer energy efficiency, as well as greater levels of renewable energy and other distributed energy resources, according to the plan’s executive summary.
“Our goal of achieving net-zero CO2 emissions also means that we will be actively supporting increased public and private investment in research and development of new energy technologies, such as hydrogen fuel and improved battery technologies, as well as constructive energy policies that support investment and allow us to continue to appropriately balance affordability, reliability and environmental stewardship,” the IRP states.
The company’s IRP also will help it meet customers’ long-term energy needs in a way that aligns with the objectives of the Paris Agreement toward limiting global temperature rise to 1.5 degrees Celsius and to do so at the least cost to customers.
Embarking on this transformation now is particularly important because Ameren says it can begin to provide customers with even more energy from cleaner generation sources, while also mitigating risks associated with the kinds of clean energy policies that could be implemented in the next five years, according to the IRP.
Ameren’s plan is “a bold plan,” said Tom Kuhn, president of the Edison Electric Institute (EEI), which represents the nation’s investor-owned electric companies.
“Our industry is committed to getting the reliable, affordable energy we provide as clean as we can, as fast as we can, and Ameren is demonstrating this commitment by accelerating the initial emissions reduction targets it had set for 2030 and 2040,” Kuhn told Daily Energy Insider.
For example, Ameren’s 2017 plan included the addition of 700 megawatts (MW) of new wind generation in Missouri, and by early next year that wind generation will be in operation and providing clean energy to its customers, according to the IRP.
Ameren Missouri’s new plan goes significantly further, transforming its generation portfolio to include 5,400 MW of wind and solar generation by 2040, the retirement of all of its remaining coal-fired generation by 2042, and achieving net-zero CO2 emissions by 2050. The company also plans to support the decarbonization of the region’s economy through electrification of transportation and other sectors that currently require fossil fuels, according to the IRP.
“Over the past eight years, more than half of all new generation deployed across the United States has been renewables, and that trend will continue as wind and solar are critical elements of our sector’s emissions reduction strategy,” EEI’s Kuhn said. “Ameren’s planned investments in zero-carbon generation, smarter energy infrastructure, and electric vehicle charging infrastructure are a major win for customers and will be major drivers of local economic growth across the company’s service territory in Illinois and Missouri.”
Ameren Missouri’s ambitious IRP follows a national trend of largely fossil-fuel dependent American utilities setting net-zero CO2 reduction goals and investing in renewable energy, according to experts at the Natural Resources Defense Council (NRDC).
“Ameren Missouri’s targets track with a pattern of utilities, cities, and states across the United States taking climate goals into their own hands, absent of federal policy or ambition,” wrote Ashok Gupta, senior energy economist at NRDC’s Climate and Clean Energy Program, and Gabrielle Habeeb, NRDC Climate and Clean Energy Program Assistant, in a Sept. 30 NRDC blog. “The breadth and depth of such commitments signals the impending end of the coal generated electricity.”
Gupta and Habeeb noted that Ameren Missouri now joins more than 20 large utilities with net-zero emission targets. “As the eighth-largest owner of coal capacity, Ameren Missouri’s renewable investment targets also represent a big step in the right direction,” they wrote. “Now we need the right set of policies to help them go even further.”
For instance, if the State of Missouri passed policies such as securitization — which is a financing mechanism that allows for retirement and cost recovery of uneconomic coal-fired power plants — or other clean energy standards, the industry “could see even these promising targets exceeded in the next few years,” wrote Gupta and Habeeb.
The Ameren plan also takes advantage of the continued decline in the cost to build new clean energy resources, according to Arora.
The deployment of new wind and solar resources, for example, will allow the utility to take advantage of continuously improving costs and efficiencies associated with zero-emission and other advanced technologies, he said, adding that Ameren also is able to take advantage of available federal tax credits. “Because the technology is advancing so quickly, and becoming more reliable and affordable, then that allows us to continue to get more and more renewable bonds,” he said.
Arora also said that solar and wind energy-related technology advances have been equally as beneficial.
For instance, technologies that allow energy to be produced on both sides of a solar panel make them more efficient, and because the panels are larger, then more energy may be generated more efficiently from just one panel, “even more than what was available just a few years ago,” said Arora, adding that the construction costs also are much lower.
Such advances are driving down costs, allowing Ameren to invest in renewable energy now, Arora said. “We can transition to renewables without really increasing costs for our customers,” he added.
