Planning for the Future
As one of the nation’s largest electric utilities, Duke Energy is keenly aware of the significant challenges and opportunities facing our industry. (See related article, “Duke Energy prepares for electric utility industry’s rapidly changing future”)
Today, Duke Energy provides electricity to more than 24 million Americans – about 7.5 percent of the U.S. population. Our customers expect us to provide reliable, affordable power 24 hours a day, seven days a week. They also increasingly want products and services that provide them with more choice, convenience and control over their energy usage. We must meet their expectations while also transitioning to cleaner generation sources and incorporating new technologies that are transforming our industry.
Our communities and employees also expect us to deliver the energy we produce safely – both for people and the environment.
Our investors expect us to provide a steady return on their investments. They expect us to meet our short-term financial goals as we also plan and execute strategies that protect their long-term investments.
We have many other stakeholders – policy makers, regulators and non-profit organizations -- who also have interest in the decisions Duke Energy makes as we move towards the future.
Given our large and diverse stakeholder base, Duke Energy spends considerable time and resources thinking about and planning for tomorrow:
- How will we meet our customers’ energy needs in five years? In 10 years? In 15?
- How many new customers will join our existing customer base each month, each year?
- How quickly can we incorporate renewable energy sources into our generation fleet while maintaining reliability?
- How will the company’s decisions today affect our customers’ electric bills tomorrow?
- How will technological changes affect our business?
Duke Energy uses complex analytical tools and scenario modeling to explore and answer these and other key questions on an ongoing basis. In addition, in 2015, we conducted a detailed strategy review that resulted in the development of “The Road Ahead” – our long-term, customer-focused strategy for the future. We will provide smart energy solutions by generating cleaner energy, modernizing the power grid and transforming the customer experience.
Environmental responsibility, reliability, customer cost
Today and in the future, the company seeks to provide electricity that is both environmentally responsible and reliable – at the lowest possible cost to customers.
Balancing those three variables – environmental responsibility, reliability and customer cost – is a constant challenge.
As part of our comprehensive long-range planning process, we examine an array of factors and how they could affect our costs and long-term sustainability. Experts in our Corporate Strategy group work with energy consultants, engineering firms and economic forecasting experts to evaluate how variations in factors such as those listed below could affect our long-term plans.
- Future electricity demand forecasts
- Energy efficiency’s potential impact on future electricity demand
- Power plant fuel price forecasts
- Power plant diversity (e.g., solar, wind, hydro, natural gas) to mitigate price and supply risks
- Existing power plants’ electricity output
- Potential new power plants’ output
- Impact of closing existing power plants
- Cost of new power plants
- Environmental impacts of various electricity generation options
- Regulatory policies that could impact electricity production (e.g., proposed federal Clean Power Plan)
- Ability of various generation sources to meet high customer demand for electricity during periods of extremely hot and cold temperatures (summer and winter)
- Integration of customers’ self-generation (e.g., residential solar) into the larger power grid
- Solar and wind energy’s growing contribution to overall electricity production
- Challenges associated with renewable energy’s intermittent (non-24/7) electricity production
- Potential for large-scale energy storage (batteries and other technologies) to address renewables’ intermittency
- Impact of every item above on customers’ electric bills
Integrated resource plans
Duke Energy annually, biannually or triennially (depending on the state) prepares lengthy, forward-looking “integrated resource plans” for its various utility companies.
These detailed, highly technical plans are based on the company’s thorough analysis of the factors listed above, plus many others – including various potential environmental and regulatory scenarios.
For example, the company’s nearly 300-page “Duke Energy Indiana 2015 Integrated Resource Plan” focuses on seven discrete scenarios arranged in three general groups:
- No carbon regulation
- Carbon tax
- Proposed federal Clean Power Plan
Similarly, the company’s nearly 100-page “Duke Energy Carolinas 2015 South Carolina Integrated Resource Plan” examines the infrastructure needed to meet forecasted customer electricity demand over the next 15 years, based on multiple variables and potential scenarios.
Taking action now
While planning ahead, Duke Energy simultaneously is taking concrete action today to prepare for the realities, challenges and opportunities of tomorrow. To gain more information on actions we are taking today as we look to the future, please read these articles in this Sustainability Report.
- Duke Energy prepares for electric utility industry’s rapidly changing future
- Energy efficiency: Responding to customers
- It’s my job to help you save energy (and money)
- Batteries get a charge in Indiana
- Spotlight on renewable energy
- Ensuring wind power can coexist with eagles, bats
- Western Carolinas project will yield major environmental benefits
- Cleaner burning natural gas provides benefits in Florida and the Carolinas
- Duke Energy invests in second natural gas pipeline
- Striving toward a lower-carbon future
- Coal plant retirements
- Protecting nature while ensuring reliable electricity