Beyond the Meter - Episode 5: How Energy Providers Like Duke Are Leading The Way
How Energy Providers Like Duke Are Leading The Way, with Doug Esamann and Chris Fallon
As one of the largest energy providers in the United States, Duke Energy is positioned to make a significant impact on the move toward renewable sources of energy. Duke provides electricity to 7.7 million retail customers in six states. While some might see the renewable energy movement as a threat to a company like Duke, its leadership sees renewable energy as the future of energy providers across the nation.
As a result, Duke’s commercial business owns and operates diverse power generation facilities in North America, including a growing portfolio of renewable energy assets. The company is leading the way with the modernization of its energy grid, generating cleaner energy to create a smarter energy future for customers. This conversation features Doug Esamann, Executive Vice President of Energy Solutions at Duke and Chris Fallon, Vice President of Duke Energy Renewables. Listen to learn how energy providers like Duke are positioning themselves to serve customer needs through renewable energy.
Outline of This Episode
- [1:10] The background and involvement Doug and Chris have in energy utilities
- [4:00] Duke Energy’s history in renewable energy procurement
- [7:41] In deregulated markets, Duke has been very active. Here’s how
- [9:16] The role renewable energy has played in the company overall
- [13:10] How Duke communicates with customers regarding renewable energy
- [18:20] A wide range of customers in renewable energy projects
- [24:56] The biggest obstacle for Duke’s renewable energy projects: uncertainty
- [29:35] Why Duke is bullish about renewable energy
- [34:40] How the “Energy Integrator” concept impacts the approach of utilities like Duke
The renewable energy story at Duke begins with commercial business
The leadership at Duke energy could see the writing on the wall as more and more states were becoming focused on renewable energy in the development of legislated energy standards. It meant a change for the way Duke creates and supplies energy to its customers, but the team was ready to respond.
Renewable energy at scale was a natural fit for Duke to consider as it sought to offer utilities to municipalities and cooperatives who were under the requirements to meet renewable standards. At first, justifying the investment in renewable options was difficult from a price perspective but the company’s leadership was committed to sustainably growing the business. As costs have come down in regulated markets and tax credits have made renewables competitive with traditional options, Duke has looked to replace coal plants and other carbon-free options with cleaner forms of energy.
Balancing profitability with customer needs and CO2 emission goals
Traditionally, energy suppliers like Duke have looked for opportunities of a long-term nature that allow the company to build out a power plant or facility and be able to rely on a return on that investment coming back over time. While not the same thing structurally, renewables allow customers with good credit history to provide a similar long-term opportunity for Duke through longer-term contracts. This provides the same secure deal structure but allows Duke to vary its supply chain considerably.
At the same time, renewables present an opportunity to couple investments in new generation sources of energy with the company’s CO2 emission reduction goals. Duke’s current goal is to reduce its carbon emissions by 40% by the year 2030. Its efforts have been so encouraging there is consideration within the company of shooting for an even larger CO2 reduction. Duke’s leadership understands that they have a unique responsibility to embrace renewable sources of energy as a way to get to its environmental goals while still being able to provide reliable, affordable power to its customers.
The customer’s perspective matters to the team at Duke
Modern customers want to be more responsible with their energy choices. They also want the opportunity to select the kind of energy they want to purchase for their homes and places of business. Duke has developed customized solutions using its resources and options from outside the regulated utility space. The way the company sees it, it’s about being more focused on the customer. No more building products then trying to sell those products into the market - the model is now flipped upside down with customer needs and desires coming first.
It’s an ever-evolving path that the Duke team is walking and it has required a cultural shift within the company. But it’s a decision that’s being taken seriously, manifested in part through the creation of the position of Chief Customer Officer, and tapping Barbara Higgins to lead the way in understanding the customer first when it comes to renewable energy and other issues.
The uncertainty of the renewable energy puzzle is difficult for energy suppliers
The move toward renewable energy for a large energy supplier like Duke is fraught with difficulties. One of the most frustrating issues comes from the uncertainty inherent in this stage in the development of renewable energy. Regulations regarding renewable energy are in a constant state of flux, so deals that are already under contract can change overnight and the Duke team has to adapt to stay within costs and meet their commitments in spite of the changes.
But the good news is that costs for renewable energy continue to come down, making the future of renewable energy projects a given for providers like Duke. As well, energy storage costs are becoming more affordable all the time, which can make the intermittency of renewable energy less of an issue for large suppliers. There’s also the likelihood that taxes or penalties for carbon emissions could soon be in place. That too would push the necessity and demand for renewable energy forward.
If you take the time to listen to this conversation you'll see how large energy suppliers are making real changes toward a cleaner energy future.
Resources & People Mentioned
- Duke CEO Lynn Good
- REC Solar
- Duke Energy Renewables
- PIedmont Natural Gas (a Duke Company)
- The FERC (Federal Energy Regulatory Commission)