Vistra Energy Corp

Vistra now discloses the financial results for plants with announced retirement dates under a Sunset Segment. This aids transparency around the potential impairments and costs associated with exiting fossil-fuel generation. This new segmentation also increases the visibility of Vistra’s low-carbon, lower risk portfolio. It is not mandatory for Vistra to disclose this level of financial detail and very few of its peers do so.

Vistra has taken action to increase the level of climate change expertise on its board. In 2019, Vistra engaged Boston Consulting Group (BCG) for a series of climate change workshops, in 2020 McKinsey advised on climate issues and sustainability trends and Rivel on improving sustainability initiatives and reporting. In 2021, BCG lead further workshops with senior management and the board on emerging climate-related risks and opportunities. The training has resulted in better informed existing board members but there is no evidence that Vistra has strengthened its expertise by seeking new members with extensive climate expertise.

Vistra’s transition plan relies on natural gas for dispatchable power well beyond the 2035 International Energy Agency (IEA) cut-off date for decarbonisation of the electric utility sector in advanced economies. The company states that it supports research into carbon capture and storage (CCS) but there is no evidence that Vistra funds any research in this area. With the increasing climate ambition seen at state and federal levels, and with the high level of gas capacity in its future scenarios Vistra will need to research, invest in and implement CCS at scale.

No evidence was found of Vistra developing business models that drive the energy mix to low-carbon energy, reduce energy demand or develop CCS and Negative Emissions Technologies (NETs). Its renewables ambitions are modest relative to its overall capacity. Vistra should develop its business model to align with the needs of the low-carbon transition through increasing renewable capacity.

Vistra’s illustrative forecast of 2030 capacity shows 75% from fossil fuels – 65% gas and 10% coal. This is down from total fossil fuel capacity of 93% in 2020. While this demonstrates progress, it is not sufficient to achieve its 1.5°C pathway and leaves the company heavily exposed to potentially more aggressive and faster federal and state climate policies.

During 2020, Vistra increased the ambition of its 2030 emissions target from a 50% to 60% reduction and has an objective to reach net-zero emissions by 2050. These objectives are dependent on the necessary technology, market and regulatory support.

By 2030 Vistra plans to grow its renewables by 6 GW and close down 7 GW of coal capacity. Its 2030 plans rely on fossil fuels for 75% of generation. Its plans lack detail after 2030 and are not aligned with the need to reach net zero emissions by 2035 as laid out in the IEA’s Net Zero scenario.

Vistra has removed significant amounts of coal from its portfolio but has relied on Power Purchase Agreements to expand renewable capacity. However, it is now investing in its own renewable assets. Vistra has begun to disclose fossil fuel assets earmarked for closure under a new Sunset segment.

Vistra has retired and committed to retire nearly 17 GW of fossil fuel assets since October 2016. Overall, Vistra has achieved a 45% reduction in emissions since 2010. In 2020, Vistra arranged climate training for its senior staff and its board.

Vistra’s plans rely heavily on natural gas. Yet the company does not engage in research or support for  CCS. This and other inconsistencies are evidence that the need for low-carbon transition is not sufficiently embedded in Vistra’s governance and strategy