PPL (NYSE: PPL) said Thursday that it plans to reach net-zero carbon emissions by 2050, bumping up its original timeline by a decade.

In a call to discuss second-quarter earnings, CEO Vincent Sorgi said the company is on track to reduce carbon emissions to 70% below 2010 levels by 2035 and 80% below by 2040. Sorgi said PPL’s new net-zero emissions goal and interim targets are based on the company’s updated forecasts, analysis and business planning.

But Sorgi said the company will need breakthroughs in advanced technologies to achieve total net-zero emissions by 2050, which is why PPL is also focusing on research and development in clean energy technologies.

PPL recently announced a $50 million investment with global consulting firm Energy Impact Partners to work with other energy companies and entrepreneurs to develop sustainable technologies.

“PPL is fully committed to driving innovation to enable net-zero carbon emissions by 2050 and to ensure a balanced, responsible and just transition for our employees, communities and customers as we advance towards our clean energy goals,” Sorgi said. “Our new goal reflects our continuous evaluation of our progress and opportunities through ongoing business and resource planning efforts.”

Energy Mix

Sorgi said PPL is completing an updated, scenario-based climate assessment, evaluating the potential impacts to PPL from climate change and potential future regulations regarding carbon emissions around the country. The company’s last climate assessment report was released in 2017, Sorgi said. The updated report, slated to be released later this year, will analyze new climate scenarios such as limiting the global temperature increase to no more than 1.5 degrees Celsius.

Sorgi said PPL’s climate assessment efforts are considering current integrated resource planning (IRP) activities occurring at its Kentucky-based subsidiaries, LG&E and KU Energy. The companies are set to file their IRPs with the Kentucky Public Service Commission in October.

Based on the most recent rate case filings in Kentucky, Sorgi said, PPL expects to achieve a 70% reduction in its coal-fired capacity by 2035, 90% by 2040, and 95% by 2050 compared with 2010 baseline numbers. The 550 MW of coal-fired generation remaining in 2050 will consist of Trimble County Generating Station Unit 2, which started commercial operation in 2011 and uses clean technologies.

“Our internal view of what it could take to achieve 100% carbon-free generation by 2035, as proposed by the Biden administration, using current technologies would create significant affordability issues for our customers,” Sorgi said. “Our new commitment to achieve net-zero carbon emissions by 2050, is backed by the actions that we are and will continue to take to support a low-carbon energy system that is affordable and reliable, and provides the time needed for the technology to advance.”

UK and RI

Besides the clean energy measures, Sorgi gave an update on the sale of PPL’s U.K. utility, Western Power Distribution (WPD), and the purchase of National Grid’s Narragansett Electric in Rhode Island. (See PPL to Sell UK Business, Acquire Narragansett Electric.)

Finalized in June, the sale of WPD to National Grid netted $10.4 billion for PPL. The sale allowed PPL to retire $3.5 billion in corporate debt, and the company is examining uses for the rest of the funds, including investments in Pennsylvania and Kentucky operations or renewable energy projects and the repurchasing of company shares.

PPL expects to repurchase about $500 million of its shares by the end of the year, Sorgi said, with the company’s board of directors recently authorizing the purchase of up to $3 billion of outstanding shares. He said the board settled on the $500 million figure because it “struck a nice balance” and provided the company “financial flexibility” to continue examining other options for the money.

Sorgi said PPL is close to completing the $3.8 billion acquisition of Narragansett Electric from National Grid, with the deal expected to close by March or sooner based on final regulatory approvals. PPL is waiting for approval by FERC and the Rhode Island Division of Public Utilities and Carriers; an exact timeline for the approval has not been finalized.

“As we pursue the final regulatory approvals, we are working closely with National Grid on transition planning to ensure a seamless transition for Rhode Island customers and Narragansett employees upon closing,” Sorgi said.

Earnings

PPL reported second-quarter earnings of $19 million ($0.03/share), compared with $344 million ($0.45/share) a year earlier. The company reported a net loss of $1.82 billion (-$2.37/share) for the first six months of 2021, compared with earnings of $898 million ($1.17/share) during the same period last year.

Special items in the second quarter included a U.K. tax rate change and a loss on the early extinguishment of debt, which was partially offset by earnings from the operations of the U.K. utility business prior to the completion of its sale in June, CFO Joseph Bergstein said.

PPL posted revenue of $1.29 billion during the quarter, nearly the same as in 2020.

The price of PPL’s shares was up at the close of the market on Thursday, gaining 43 cents to $28.86.