Energy Transformation

The issue of sustainable electricity has been a topic of discussion with our stakeholders for more than a decade. These discussions have included investors, customers, regulators, environmental groups, credit rating agencies, lenders and public policymakers, among others. Stakeholders want to know about AEP’s strategy for transitioning to a cleaner energy future.

They ask us about resource diversity, advanced technologies that enable more efficient use of energy, regulations and public policies that could affect future operations or investments, and our plan for a modern, smarter infrastructure that empowers customers and creates a more resilient and robust system. Across the board, the question we are asked most frequently is whether we are sufficiently prepared for the transition to a cleaner energy economy.

Our first obligation is to serve our customers with safe, reliable, reasonably priced 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 plan to meet those needs efficiently and cost-effectively. Our plan includes:

  • Near-term investments in renewable energy within and outside of our traditional service territory
  • Technology deployment (e.g., energy storage)
  • 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
  • A variety of ownership options such as Purchased Power Agreements (PPAs)
  • Advancement of our integrated resource plans with regulators
  • Energy efficiency and savings through technology, load 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

AEP has already made significant progress in reducing carbon emissions, from our early commitment as a founding member of the Chicago Climate Exchange. In February 2018, AEP announced new CO2 emissions reduction goals – to reduce CO2 emissions from AEP generating facilities by 60 percent from 2000 levels by 2030; and a longer-term goal to reduce CO2 emissions from AEP generating facilities by 80 percent by 2050, including our plan for achievement.

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 American Electric Power: Strategic Vision for a Clean Energy Future.