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

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

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!