Today’s age of technology, innovation and disruption is transforming the electric industry. A changing fuel mix, falling power prices, increasing demand for renewables, the surge of distributed energy resources, higher customer expectations, and a deeper focus on cybersecurity and grid resilience are the catalysts for change. We have to be agile, innovative and more efficient to lead in this rapidly changing environment, stay relevant to our customers and be competitive in new markets. We see sustainable electricity as being cleaner, more technologically advanced, cost-effective and efficient.
We are diversifying our resource mix to serve our customers’ needs, with an eye to the future of an electrified economy – the use of electricity to power not only buildings but also transportation systems and industrial processes. We must manage the transition carefully to protect the reliability and resilience of the power grid. At the same time, we envision a future where beneficial electrification across industry sectors creates new opportunities for growth, fewer CO2 emissions economy-wide, greater transportation mobility, and optimization of the grid for all resources and technologies.
When we think about sustainable electricity, we look across the value chain to include fuel resources as well as transmission and distribution, energy efficiency, advanced technologies such as battery storage, distributed resources and data analytics. These give us the information we need to proactively operate and maintain the grid more efficiently. That’s what our “all of the above” strategy is all about. At the center of this is our commitment to deliver an exceptional customer experience.
Our first obligation is to serve our customers with safe, reliable, reasonably priced and increasingly cleaner electricity and to maintain the reliability and resilience of the power grid. AEP’s current business strategy and resource plans reflect a comprehensive and diverse approach to meeting those needs efficiently and cost-effectively. Our plan includes:
- Near-term investments in renewable energy within and outside of our service territory
- Technology deployment
- Modernization of the grid to optimize all resources and technologies with significant investments in our transmission and distribution systems
- Increased use of low-carbon-emitting generation resources, such as natural gas
- Advancement of our integrated resource plans with regulators
- Energy efficiency and savings through technology, energy management and conservation programs on both sides of the meter
- Demand response programs
- Increased integration of distributed resources, including community and large-scale renewables
- Optimization of our existing generating fleet
- Support for advancing low-carbon fossil technologies
We have already made significant progress in reducing our carbon emissions from our early commitment as a founding member of the Chicago Climate Exchange. In February 2018, we announced new goals to reduce CO2 emissions from generating facilities 60 percent from 2000 levels by 2030; and 80 percent by 2050. At the end of 2018, we had already reduced our CO2 emissions by 59 percent. We are reevaluating our 2030 carbon reduction goal since we are so close to achieving it.
These goals reflect our current business strategy but will challenge us as our operating environment evolves. A combination of factors gives us confidence in our ability to achieve these reductions, including an aging coal fleet, our growing investments in clean energy and the potential of new and emerging technologies to make the power system more efficient, more decentralized, fully integrated and digitized. Read more about this in Carbon & Climate.