Will Duke Energy Corp (DUK) Stock Soar on Clean Coal?

Duke Energy Corp (NYSE:DUK) stoked its energy fires last week with the grand opening of a new “clean coal” power plant. “The other black gold” historically has a bad rap, and natural gas has recently stunted coal capacity. But with rising natural gas prices and new coal technology, is clean coal the secret to Duke Energy stock’s success? Let’s take a look.

Duke Energy Corp (NYSE:DUK)

“The world’s cleanest”
Duke Energy Corp (NYSE:DUK) opened the doors to a new 618 MW Indiana coal-fired power plant last week. But unlike the 500 MW carbon coffer it replaced, this new plant is touted as “one the world’s cleanest coal-fired power generating facilities.” Using advanced gasification technology, Duke’s new digs produce 10 times the power of the former plant with 70% fewer emissions.

Source: Duke Energy Corp (NYSE:DUK).

“Coal has powered Indiana for more than a century,” said Duke Energy Indiana President Doug Esamann. “But today’s air quality standards require us to use that fuel in a cleaner, more efficient way. Edwardsport turns coal into a cleaner-burning fuel and enables us to continue using an abundant local resource.” In addition to fewer emissions, the facility also boasts less water use, as well as secondary product production like sulfur and slag for agricultural and construction materials.

Duke Energy Corp (NYSE:DUK)’s not the only utility counting on clean coal. American Electric Power Company, Inc. (NYSE:AEP) was recently awarded a coveted Edison Electrical Institute Award for its own 600 MW “advanced ultra-supercritical steam cycle” coal fired power plant. While the technological feat by itself might’ve been enough to win over Edison, the utility also received major kudos for the seven years of construction, scheduling, and legal and regulatory challenges it pulled through.

Cutting back on coal
Both Duke Energy Corp (NYSE:DUK) stock and AEP stock have long relied on coal, clean or not, to power their profits. But some historically coal-centric utilities are calling it quits. FirstEnergy Corp. (NYSE:FE) counts on coal for around 64% of its total generation capacity and had to idle several of its power plants last year as cheap natural gas prices and EPA regulations cut out coal’s competitiveness. In early 2012, the utility announced plans to retire a whopping 3,400 MW of coal-fired power generation, more than a quarter of its current capacity.

TECO Energy, Inc. (NYSE:TE) is as close to a pure coal pick as utilities get, but even TECO is taking a step back. The utility’s Appalachian coal mines churn out 9 million tons annually, and its regulated division relies on coal for 61% of its capacity. But last week, the company announced that it’s dishing out $950 million for a regulated New Mexico natural gas utility. The acquisition adds 50% to TECO Energy, Inc. (NYSE:TE)’s customer base and could provide some natural hedging if coal and natural gas continue their price tango.

Can Duke Energy stock soar?
Duke Energy Corp (NYSE:DUK) has a long history of coal use, and its newest facility hints that it’s not done with the diamond yet. While some utilities are ditching coal for other energies, companies like Duke and American Electric Power Company, Inc. (NYSE:AEP) are tackling carbon emissions through technological innovation. Neither solution is fool-proof, but for now, at least, policymakers are satisfied, and costs are competitive.

The article Will Duke Energy Stock Soar on Clean Coal? originally appeared on Fool.com and is written by Justin Loiseau.

Fool contributor Justin Loiseau has no position in any stocks mentioned, but he does use electricity. You can follow him on Twitter, @TMFJLo, and on Motley Fool CAPS, @TMFJLo.The Motley Fool has no position in any of the stocks mentioned.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!