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.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

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 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!