AEP to invest $1.8 billion in renewables

In Clean News, News, Renewable Energy, Solar

American Electric Power (AEP), one of the United State’s largest power companies and one that owns a disproportionate share of coal assets, announced that it will invest $1.8 billion in new renewable energy projects during the 2018-2020 timeframe. This is nearly five times the company’s current investment in renewable energy generation by dollar value.

This $1.8 billion will represent around 10% of the company’s planned capital outlays during the period, 72% of which will go to its transmission and distribution businesses. While AEP still owns 60 power plants totaling 26 GW of capacity (47% of which is coal-fired generation), in the past 10 years the company has taken a sharp turn in strategy away from investing in generation towards its transmission and distribution.

Most of AEP’s investment is likely to be in wind, among the 5.57 GW of renewable energy projects identified for completion through 2025 under to serve its regulated utility businesses the company is looking at 1.37 GW of solar.

AEP has also revealed that among the $1.8 billion for renewables it plans to invest $1.3 billion in projects under power contracts. These investments will be split over its AEP Onsite Partners and AEP Renewables subsidiaries.

AEP characterizes its approach to these contracts as looking to develop fully contracted assets with strong credit counterparties, with the aim of seeking long-term, predictable cash flows. This will include specific requirements on project returns, and what it calls a “measured” approach to project risks.

This move of AEP is a definitive sign that renewable energy has gone mainstream.

 

source-AEP PR

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