Southern Company has joined other major U.S. utilities in setting a net-zero carbon target for 2050, aiming to balance the emissions from its sizable fossil-fuel-fired generation fleet and sprawling natural-gas business with reductions to be gained by expanding its portfolio of renewable energy and energy efficiency. 

Wednesday's announcement puts Southern Company in the ranks of other U.S. utilities pledging midcentury net-zero carbon targets, including Xcel EnergyDuke EnergyDominion EnergyArizona Public Service, NRG, PSEG and Consumers Energy. Shareholder activist groups Ceres and As You Sow, which have pressed for the target, called it a significant improvement on the company’s “low- to no-carbon” by 2050 goal set just two years ago.  

Southern Company, which owns a number of utilities across the South, said it now expects to hit a 50 percent reduction in carbon emissions compared to 2007 levels “well ahead” of its previous 2030 target and possibly as early as 2025. Dan Bakal, senior director of electric power at Ceres, called that “another encouraging step by a utility that shows increased ambition around climate,” in a Wednesday interview. 

However, Southern Company has not yet released specifics on near-term changes to its ongoing resource plans that could help accelerate its decarbonization plans. That leaves shareholder groups waiting for more details on how it will adjust plans for natural-gas-fired generation over the coming decades, measure the greenhouse gas impact of its gas operations, and moderate reliance on as-yet-unproven technologies like carbon capture.

Counting on "negative-carbon" solutions

Southern Company’s new goal applies “enterprise-wide,” meaning that it includes its electric utilities Alabama Power, Georgia Power and Mississippi Power, which serve about 4.2 million customers; its Southern Company Gas unit which operates infrastructure across the Eastern U.S.; its Southern Power competitive power arm which owns about 12.8 gigawatts of generation capacity, including substantial amounts of wind and solar; and its Southern Nuclear arm, which operates six nuclear power plants and is building the country’s only new nuclear capacity at its Vogtle site in Georgia

In its statement Wednesday, Southern said its net-zero approach will include pursuing “negative-carbon solutions, including technology-based approaches such as direct air capture of carbon as well as natural methods like afforestation.”

Southern Company’s electric utilities have roughly 44 gigawatts of generating capacity. In the first quarter of 2020, that generation capacity was 52 percent natural gas, 13 percent coal, 17 percent nuclear and 18 percent “renewable and other." The company has announced or added more than 6,500 megawatts of renewable capacity since 2012, including Georgia Power’s solar portfolio, the largest utility-owned solar fleet in the country. 

Southern Company expects to have over 14 gigawatts of renewable resources by 2024 between its state-regulated utilities and Southern Power, spokesperson Schuyler James Baehman said in a Wednesday email. The resulting portfolio mix will contain about 17,300 megawatts of carbon-neutral generation in 2023, compared to about 12,500 megawatts in 2018.

Alabama Power seeking 2 gigawatts of new gas generation

Alabama Power’s long-term plan, which calls for an additional 2,400 megawatts of generation capacity, or a 19 percent increase from its current 12,400-megawatt portfolio, may be an early proving point for Southern Company’s commitment to further investments in carbon-free resources, said Lila Holzman, energy program manager for As You Sow. The plan is facing opposition from environmental groups including the Sierra Club for seeking about 2,000 megawatts of new natural-gas generation, as well as about 400 megawatts of solar and options for additional energy storage.  

“With a net-zero target, it doesn’t seem possible for gas to be as heavily a relied upon resource in their planning, and yet it is,” Holzman said. It’s also unclear how Southern Company will account for the greenhouse gas impacts of its natural-gas business. The company now discloses “Scope 1” emissions associated with methane leakage and other emissions from its pipelines and storage facilities, but does not account for natural gas burned or otherwise consumed by end customers, she said. 

As You Sow is also concerned about Southern Company relying on carbon capture technologies to meet a significant portion of its targets. Mississippi Power was one of the first U.S. utilities to attempt to prove the viability of carbon capture and sequestration to reduce the greenhouse gas impact of its fossil fuel power plants. But its showcase Kemper Plant CCS pilot project was shut down in 2017 after failing to meet its objectives and running billions of dollars over budget. 

“We think that relying on these unproven or uneconomic technologies is problematic when we see renewables-plus-storage being proven out and costs dropping from year to year,” Holzman said.