Case studies on how AEP and Southern Co. are preparing for CO2 regulations.
Chuck Chakravarthy and John Rhoads are senior executive and consultant, respectively, at Accenture. Contact Chakravarthy at firstname.lastname@example.org and Rhoads at email@example.com. The authors would like to acknowledge the contributions made to this article by their Accenture colleagues William Pott, Nate Turner, and Andrew Wickless.
Energy producers already have begun to prepare for coming CO2 regulations. As a first step, many companies are implementing internal trading schemes. These schemes include defining a scope for participating business units and geographies, and in some cases even setting penalties and creating auditing systems. Some companies have gone so far as to set up internal auctions, formal audit systems, and databases of reduction initiatives. Many of these companies also have designated internal brokers and set externally verified baselines that will lead to meeting reduction targets.
In this article, we have focused on AEP and Southern Co. as case studies of how companies are preparing for a carbon-constrained world, because they are in the top 5 companies in the United States with the highest proportion of coal-fired generation in their fleets.1