Ameren Corporation AEE has recently announced the goal to achieve net-zero carbon emissions by 2050 in Missouri and Illinois. In addition, the company laid out plans for its largest-ever expansion of clean wind and solar generation, which is included in the Integrated Resource Plan (IRP) of Ameren Missouri.
A Detailed Look at Ameren’s Plan
As per Ameren Missouri’s latest Integrated Resource Plan (IRP), the expansion represents major clean energy investments and carbon emission reduction efforts from the previous plan that was presented three years ago. Ameren Missouri’s new and progressive goals include reducing carbon emissions by 50% by 2030, 85% by 2040 and ultimately, net-zero carbon emissions by 2050 compared to 2005 levels.
The plan includes the addition of 3,100 megawatts (MW) of wind and solar generation by 2030, reflecting a combined investment of approximately $4.5 billion and a total of 5,400 MW by 2040. The IRP includes investments of nearly $8 billion in renewable energy over the next two decades. It also plans to acquire two Missouri-based wind energy facilities in the next few months for approximately $1.2 billion.
Ameren Missouri’s latest IRP also includes advancing the retirement of two of its coal-fired energy centers. The Sioux Energy Center is now planned to retire in 2028 and the Rush Island Energy Center's retirement is planned for 2039. Per the new IRP, more than 75% of Ameren’s current coal-fired energy generating capacity will retire by 2040, while all of them are expected to be closed by 2042.
Utilities’ Adoption of Renewable Energy
To mitigate the deadly effects of climate change in the United States, utilities are increasingly adopting renewable energy sources to produce electricity, with wind and solar energy gaining popularity in particular. The latest announcement made by Ameren is a bright example of that.
Going ahead, per the latest forecast made by the U.S. Energy Information Administration (EIA), electricity generation from renewable energy sources is expected to rise from 17% in 2019 to 20% in 2020 and 22% in 2021, primarily driven by projected additions to the wind and solar generating capacity.
Notably, like Ameren, other utilities are also steadily progressing toward a carbon-free environment to make most of the growing renewable energy opportunities. For instance, Xcel Energy XEL aims to achieve 80% carbon reduction by 2030 and 100% carbon-free electricity by 2050.
In September, Duke Energy DUK announced an updated climate strategy with a new goal of net-zero carbon emissions from electric generation by 2050. Likewise, DTE Energy DTE also announced its goal last year, to achieve net-zero carbon emissions in its electric company by 2050.
Price Performance & Zacks Rank
Ameren’s shares have lost 2% in the past year compared with the industry’s 14.3% decline.
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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