As one of the country’s largest energy holding companies, Duke Energy (DUK) is on a mission to slash 2005-level carbon dioxide emissions in half by 2030 on its path to decarbonize its power supply by 2050.
The timeline requires a heavy reliance on nuclear power, according to CEO Lynn Good.
Nuclear energy already accounts for nearly 40% of electricity generated by the North Carolina-based utility company, and Good said the company sees no way to reach net-zero emissions without the power source weighing heavily in its energy mix.
“A little bit over 80% of the carbon-free generation and energy that we produce comes from nuclear,” said Good, in an interview at Yahoo Finance's All Markets Summit: The Path Forward. “I want to keep that nuclear fleet operating as long as I possibly can because I don't have an alternative of a carbon-free resource that runs 95% of the time, which is what nuclear represents today.”
The U.S. already generates more nuclear power than any other country, with 94 reactors supplying electricity roughly 20% of the overall grid. But the number of reactors have remained largely stagnant, in part because of concerns about safety and cost overruns. Just one new nuclear plant has come online in the U.S., in the last 25 years.
With 11 nuclear units across six sites in the Carolinas, Duke Energy oversees the largest fleet of nuclear plants in the country. While the reactors make up just 17% of the utility firm’s overall capacity, they generate well over a third of its electricity.
Good said nuclear power acts as a reliable hedge against the price and supply volatility of natural gas, seen as a “bridge fuel” because it emits nearly half the carbon emissions of coal. Soaring global demand for the commodity has led to a more than 20-fold increase in price, from the pandemic lows last summer, according to EIA data.
Duke is actively involved in conversations to develop small modular reactors or SMRs, a new generation of reactors that require a smaller footprint and can be scaled up at a faster and cheaper cost, by mass producing components in factories.
“We are committed to safe operation, of course. It's always job number one. And we're committed to extending the licenses of these plants,” Good said. “And then we are working actively in an advisory capacity and lending our operating expertise to the development of small modular technologies and advanced technologies that may create the opportunity to introduce more nuclear [power] in the 2030s and 2040s.”
Expanding the generation of nuclear power is largely expected to supplant coal’s decreasing footprint. Electricity generated by coal-powered plants accounts for roughly a quarter of Duke’s energy mix, but the firm has already shuttered 54 units and plans to close "many more" over the next decade, in its push to reach net-zero emissions by 2050.
Renewable energy is expected to become the utility company’s largest generation source by 2050, Good said solar, wind and hydro don’t have the efficiency and reliability nuclear has, just yet.
“As we model the future, we're modeling an hour-by-hour dispatch of our system, we're monitoring a range of prices on new technologies, we’re modeling how much electrification occurs, and therefore how much additional requirements for electricity there will be,” Good said. “That combination [from renewable energy] we see as being 40, maybe 50%, of what we operate. And then we would supplement the rest of that with other technologies, some of which I don't even know what they are today, because we're waiting for those developments to occur.”
Akiko Fujita is an anchor and reporter for Yahoo Finance. Follow her on Twitter @AkikoFujita