Southern Company announced a new long-term greenhouse gas (GHG) emissions reduction goal of net zero emissions by 2050. The company also reaffirmed its intermediate goal of a 50% reduction of GHG emissions from 2007 levels by 2030. These are enterprise-wide goals across all electric and gas operations. Today’s action, announced during the 2020 Southern Company Annual Meeting of Stockholders, replaces the low- to no-carbon goal the company unveiled in April of 2018.
“We commend Southern for committing to net-zero emissions and look forward to more clarity on how it will achieve this new target, especially with regard to its large natural gas fleet,” said Lila Holzman, energy program manager of nonprofit shareholder advocacy group As You Sow. “Shareholders are increasingly concerned that utilities may experience stranded assets and early retirements of natural gas infrastructure similar to what we’ve seen with coal-fired assets. Southern must clarify how it will avoid this as it works to achieve its climate target.”
Driven primarily by low natural gas prices, and through its regulators, Southern Company has seen a rapid transition of its system’s generation fleet. The Southern Company system’s carbon emissions have decreased by 44% through 2019, and the company now expects to achieve the 50% reduction goal well in advance of 2030, and possibly as early as 2025. The company will offer further detail on its progress in a report to be issued later this year.
“I continue to be confident that we are prepared and well-positioned to meet the needs of our customers, employees, communities and investors well into the future and will succeed in the transition to a net-zero carbon future,” said Tom Fanning, chairman, president and CEO of Southern Company. “As always, we are committed to providing clean, safe, reliable and affordable energy to the customers we are privileged to serve.”
To achieve the net-zero goal, the company will continue to reduce GHG emissions and continue its long-term commitment to energy efficiency, but also incorporate negative carbon solutions, including technology-based approaches such as direct air capture of carbon as well as natural methods like afforestation. Since 2018, the interest in decarbonization efforts in the U.S. and beyond — including with Southern Company’s board and stakeholders — has evolved to incorporate concepts related to negative carbon solutions.
This long-term, strategic approach is essential to successfully reducing carbon emissions while also maintaining reliability and affordability. The transition of the generation fleet helps ensure energy remains reliable and affordable for customers while also being sensitive to the impact this transition has on communities as well as employees. All of this is executed in the absence of mandates and by constructively engaging with policymakers, regulators, investors, stakeholders and customers to support outcomes that lead to a net-zero carbon future.
News item from the Southern Company
“Driven primarily by low natural gas prices, and through its regulators, Southern Company has seen a rapid transition of its system’s generation fleet. The Southern Company system’s carbon emissions have decreased by 44% through 2019, and the company now expects to achieve the 50% reduction goal well in advance of 2030, and possibly as early as 2025. The company will offer further detail on its progress in a report to be issued later this year.”
The Southern Company is betting heavily on the completion and operation of the Vogtle nuclear plant for about 50 years to meet its reduction goals. Unfortunately Vogtle was supposed to cost $10 billion and is at $26 billion and counting. The “clean coal” debacle of the Kemper Plant in Mississippi, had to be “converted” to natural gas boilers after it was discovered clean coal couldn’t compete in price to online natural gas generation, solar PV or wind generation in the electricity marketplace. As soon as Vogtle is commissioned, I believe one can expect a call to raise electricity rates to help subsidize Vogtle and some of that money may just find itself also subsidizing Kemper. This has to weaken Southern’s ledger sheet, leaving them vulnerable to hostile takeover in the near future.