Exelon Corporation

In 2021, Exelon developed its first emissions reduction targets that cover its scope 1 and 2 electricity generation emissions. The company plans to become net-zero in 2050 and to reduce its emissions by 50% by 2030. The development of these targets are a significant improvement on the company’s commitment to the low-carbon transition. However, these targets are not ambitious enough to align with its 1.5°C pathway. Despite low levels of emissions intensity, the company is still required to reach net-zero by 2035. There remains an opportunity for the company to set frequent, regularly spaced intermediate targets and aim to reduce its already small emissions intensity to zero by 2035.

Exelon’s high proportion of nuclear generation gives it a leading low-carbon position in the US electricity market. However, continued use of gas and oil to supplement nuclear generation has resulted in no reduction in emissions intensity between 2015 and 2020. Exelon has not signalled any intention to reduce fossil fuel electricity generation. Exelon could strengthen its performance in low-carbon transition and be one of the first electric utility companies to fully decarbonise by replacing its oil and gas generation. Without changing its approach, Exelon risks falling behind its peers in the race to transition.

Exelon has several methods of investing in research and development. For example, its Partnership Research & Development Program invests in early-stage technology innovation by funding and collaborating with research institutions. It also engages in energy storage development through a strategic partnership with Volta Energy Technologies. Moreover, through Constellation Technology Ventures, the company invests in early-stage companies that focus on electrification of transport, energy storage and distribution and building controls. Exelon does not report its total research and development (R&D) spend but there is a need for electric utility companies to be investing at least 5% of CapEx in low-carbon R&D to enable decarbonisation in line with 1.5°C.

In 2021, Exelon established a target to reduce its electric utility business’ scope 1 and 2 emissions by 50% by 2030 compared to 2015 levels, as well as to reach net-zero by 2050.

Exelon does not intend to significantly change its business model. Rather, the company plans to achieve its emissions reduction target through technology and infrastructure investments such as electric vehicle charging, storage and energy capture technologies and improving operational efficiency.

At present, Exelon producers a large amount of baseload power using nuclear, which was 81% of generation in 2020. This is mainly supplemented by gas, which represented 15% of capacity. The company has few renewable projects and does not show any intention to replace gas.

Following Exelon’s merger with Constellation in 2011, it divested all of its coal plants, representing approximately 2 GW of capacity. However, between 2015 and 2020, there was limited changes to the company’s fuel types. As a result, Exelon’s emissions intensity has remained the same.

Exelon’s emissions performance has stagnated. Its strategy does not indicate that it plans to phase out the use of natural gas. Due to its relatively low emissions intensity, owing to the large proportion of nuclear energy its portfolio, the company already considers itself to be low-carbon and lacks ambitious targets to reduce emissions.