By selling its renewable business, the southern utility plans to focus on its core operations. The sale could amount to the largest renewable transaction in the U.S.
Duke Energy initiated the process to unload its commercial renewable business for the price tag of $4 billion.
“We’re encouraged by the market response to our Commercial Renewables business and will proceed with a sale targeting a second-quarter 2023 closing,” said Lynn Good, chief executive officer in the company’s third-quarter earnings release.
The potential sale was disclosed in August in its second quarter profit report when Lynn Good, CEO, expressed that the company would stick with its regulated consumer utility operations.
“Commercial renewables has played an important role in our business strategy for over 15 years, establishing a core competency in renewable energy development and operations that will continue to serve us well as we advance our strategy,” said Good in a press release. “But as we look forward to the remainder of this decade and beyond, we see significant investment opportunities in our regulated operations and believe now is the time to review the strategic fit of our commercial portfolio.”
Based in Charlotte, North Carolina, Duke Energy provides electric services to more than 7 million customers in the Carolinas, Florida, Indiana, Ohio and Kentucky, including retail natural gas service to over 500,000 customers in Ohio and Kentucky. About 95% of Duke’s earnings has come from its regulated utility business, with 5% coming from the renewables unit, which includes wind, solar and battery storage.
Duke said it remains committed to its clean energy goals of reducing carbon 50% by 2030 and aiming for net-zero carbon emissions by 2050. The company is also taking steps toward reducing carbon emissions, including decreasing use of coal to less than 5% of total generation by 2030 and to fully exit coal by 2035 as part of what it says is the largest planned coal fleet retirement in the industry. It also plans to convert 100% of its light-duty vehicles to electric and 50% of its combined fleet of medium-duty, heavy-duty and offroad vehicles to EVs, plug-in hybrids or other zero-carbon alternatives by 2030.
With the announcement of the sale, Duke seeks a strategic owner who has the potential to grow the renewables business. Duke’s Q3 earnings per share was $1.78, just shy of projections of $1.84.
