Renewables

In 2016, the U.S. Energy Information Administration predicts renewable energy used in the power sector will grow by nearly 10 percent over 2015 levels. The growth of renewable resources in AEP’s service areas is also climbing d and has the potential to expand, as we invest in large-scale renewable resources. Increasingly, customers want clean energy choices at a reasonable cost and they want their energy companies to work with and for them to make it happen. In fact, our current integrated resource plans show that by 2034, a majority of our resource additions will be made up of renewables and energy efficiency.

We believe we are best positioned to meet our customers’ clean energy needs. Owning, operating and maintaining large-scale energy infrastructure is what we do best. We can achieve economies of scale that individual customers cannot while achieving the same environmental benefits and controlling integration with the grid. We can leverage the power grid to be the optimizer and integrator of all resources and technologies. We have the knowledge and experience to cost-effectively and efficiently develop universal solar projects, for example, which would expand access to solar power to more customers rather than the few who can afford private solar panels. And, we can leverage our assets to achieve maximum benefit for our system, the communities we serve and our customers. As our operating companies develop integrated resource plans, universal wind and solar are often among the resource choices in those plans and will continue to be in the future.

On Jan.6, 2016, one of four new universal solar facilities in Indiana began commercial operation. The Deer Creek Solar Facility, just south of Marion, Ind., has a nameplate capacity of 2.5 megawatts (MW) of electricity – enough energy to power about 350 homes annually. Three more facilities are under construction and are expected to be placed in commercial operation by the end of 2016. In total, the four facilities will have a total nameplate capacity of 14.7 MW. In addition to investing in large scale renewable projects, we also purchase renewable energy through power purchase agreements (PPAs). Effective January 1, 2016, AEP’s regulated operating companies’ portfolio included PPAs for 2,630 MW of wind (which includes 800 MW of wind identified in AEP operating companies’ IRP plans that have recently been placed in service) and 10.1 MW of solar power. In addition, we have included plans for approximately 3,400 MW of new solar generation and 6,300 MW of new wind power between now and 2034.

Universal solar makes more long-term sense because we can provide it more cost-effectively for customers than smaller scale renewables. Furthermore, we are able to align it with grid operations, preventing unnecessary costs of integration for the long-term, such as the need to build additional transmission lines or substations.

Our renewable portfolio is designed to provide clean energy options that meet energy and capacity needs. We expect these resources to continue to grow regardless of the legal challenges to the Clean Power Plan (CPP). Many states already have voluntary or mandatory renewable energy goals and targets. We expect the demand for clean energy will grow, not diminish.

This chart reflects the combined resource plan for the AEP system based on current integrated resource plans; it also includes 900 MW of wind and solar in the Ohio PPA settlement that was approved by the Public Utilities Commission of Ohio.