Cinergy Plans Voluntary Greenhouse Gas Reductions

Cinergy has become the first predominantly coal-burning electric utility in the U.S. to publicly announce its intention to make absolute reductions of its greenhouse gas emissions (GHG). The Cincinnati-based company has announced it will voluntarily reduce GHG emissions to an average of five percent below its generation fleet’s 2000 level during the period 2010 through 2012. Cinergy, which estimates that its core operations account for about one percent of worldwide GHG (about 67 million tons of CO2 equivalents per year), will spend $21 million between 2004 and 2010 on projects to reduce or offset its emissions. The expenditure will include research and development into new technologies that address GHG. The company will try to spend at least two-thirds of the dollars on projects that have the potential to reduce emissions from Cinergy’s generation, transmission and distribution systems.

To meet its GHG emission reduction goal, Cinergy plans to use a combination of new technologies, carbon sequestration, demand-side management, energy conservation, improved efficiency of its existing generating fleet, and emission offsets. In implementing the program, the company will work with Environmental Defense, a national environmental group that has supported use of market mechanisms to achieve environmental objectives.

Cinergy will report annually its emissions of the five greenhouse gases — carbon dioxide, methane, hydrofluorocarbons, perfluorocarbon and sulfur hexafluoride. “We will be working with Environmental Defense to determine our 2000 baseline and that will be used as the basis from which we will determine achievement of our announced goal by 2010,” according to Bill Tyndall, vice president of Cinergy environmental and government affairs, “then maintain our GHG emissions at that level through 2012.”

James E. Rogers, chairman, president and chief executive officer of Cinergy, believes the program is the right course of action at the right time, supporting President Bush’s voluntary climate change challenge to business and industry. “We recognize the potential significance of climate change and believe that voluntary programs can be implemented more quickly and effectively than traditional regulatory programs,” said Rogers. “By stepping forward now, we can also mitigate some of the risk associated with climate change issues in the future.”

Cinergy has completed an inventory of its year 2000 GHG emissions produced from its core business activities. That includes emissions from baseload, mid-load, and peaking power generation facilities; vehicle fleets; transmission and distribution activities; and natural gas distribution. The inventory includes more than 95 percent of Cinergy’s GHG emissions. Final baseline GHG emissions will be determined by defining Cinergy’s GHG emissions footprint, which will be done with Environmental Defense and then audited by an independent third party.

“At this time, we do not know what fraction of our GHG reductions will come from the generation business,” says Tyndall. “The next step in our process is to develop an implementation strategy whereby we will be mapping out where we think we can achieve reductions in our operating systems and where we think offsets can be acquired.”

Cinergy places GHG emissions from its core business activities in 2000 at 66.7 million tons of carbon dioxide equivalents (CO2e). The company’s 2010 goal of 5 percent below its estimated 2000 baseline of 66.7 million tons of CO2e is 63.4 million tons of CO2e. “Although we can’t know what our actual electric generation or what our CO2e emissions will be in 2010, we currently expect our generation to grow at approximately 2 percent per year,” says Tyndall.

The company is currently trying to determine specific power plant projects it will undertake to achieve its goal. “We are looking at potential projects such as making our steam turbines more efficient,” says Tyndall, noting that Environmental Protection Agency New Source Review regulations pose barriers to implementing many efficiency improvement projects.

Cinergy is weighing several sequestration options. The company is already implementing terrestrial forest sequestration projects located principally in Indiana, Ohio, the lower Mississippi River, and in Belize, Central America. It is also participating in a number of geologic sequestration studies, pilots, and research projects in conjunction with Battelle Research, EPRI, DOE and other utilities.

Regarding demand side management, Cinergy subsidiary VESTAR will be working with clients to reduce, conserve, and manage energy consumption. And although Cinergy expects emission offsets to play an important part in achieving its goal, the company has not yet determined the specifics.

FPL Announces GHG Cuts

FPL Group, parent of Florida Power & Light, has announced it will voluntarily reduce greenhouse gas emissions 18 percent between 2003 and the end of 2008 compared to a 2001 baseline. The initiative will be carried out under the Climate Leaders Program, an industry partnership with EPA. FPL was the first electric utility to join the program.

Key strategies will include continued evaluation of fuel switching and efficiency improvement opportunities at fossil-fuel plants; improved operating efficiency of the Seabrook nuclear plant and increasing its output by nearly 7 percent; building or buying power from gas-fired generation to offset less efficient facilities; increased emphasis on energy management and conservation programs; and continued expansion of FPL’s wind energy portfolio and introduction of a green power program to customers.

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