North Carolina regulators consider possible carbon plans for Duke Energy

(The Center Square) — The North Carolina Utilities Commission is expected to take action on a state carbon plan next week amid disagreements on how to meet reduction targets outlined in state law.

House Bill 951 approved by the General Assembly last year tasks the commission with adopting a plan to reduce North Carolina's electricity-based CO2 emissions by 70% from 2005 levels by 2030, and to reach "carbon neutrality" by 2050.

The deadline for filing the plan, which will have a profound impact on the cost and sources of energy, is Dec. 31.

Duke Energy filed four options for its Carolinas Carbon Plan with the commission earlier this year that would retire between 4.9 and 6.2 gigawatts of coal generation capacity over the next decade to 12 years, with options on how to replace that capacity.

All of Duke's proposed plans rely on new solar, battery, onshore wind and natural gas combined-cycle and combustion turbine technologies to reduce emissions in the near term, though only two plans incorporate new nuclear and pumped storage technology. Three of the plans include off-shore wind in the near term, ranging between 0.8 and 1.6 gigawatts.

Three of the proposed plans, and two other supplemental portfolios submitted by Duke, would delay the 70% reduction to 2032 or beyond. All of the plans meet the 2050 goal, and all would create at least 3,100 megawatts of new solar, 2,000 megawatts of hydrogen-capable natural gas units, 1,000 megawatts of stand-alone battery storage, 600 megawatts of solar paired with batteries, 600 megawatts of onshore wind, 800 megawatts of offshore wind, 570 megawatts of small modular nuclear energy and 1,700 megawatts of pumped storage, with the last three developed in the early 2030s.

The commission's public staff, which advocates for ratepayers, has largely agreed with Duke's plans, though with about 470 less megawatts of solar and 220 megawatts more of batteries paired with solar by 2028, and 130 megawatts more in batteries by 2029.

Numerous other groups have also weighed in on the plan in recent months, including the Southern Alliance for Clean Energy, Sierra Club, North Carolina Sustainable Energy Association, and many others.

The environmental and clean energy groups have proposed orders that rely significantly more on solar and wind, and less on other technologies in the near term. The NCSEA, for example, calls for 900 megawatts more of solar by 2028, no batteries paired with solar by 2028, and 3,000 megawatt hours more of batteries by 2029, while eliminating investments in combined cycle and combustion turbine technologies.

Other proposed orders make similar suggestions to cut combined cycle and combustion turbine technologies from the plan.

"Duke Energy's plan to decarbonize the power sector through natural gas plants and increased hydrogen blending is not justified on a climate, cost, or social impact basis," said Will Scott, the Environmental Defense Fund's director for Southeast Climate and Energy. "The utilities' proposal seeks to justify investments in existing natural gas facilities by trying to retrofit a risky and expensive solution – when the most efficient, cheapest, and safest way for North Carolina to decarbonize the electric power sector is by investing in renewable power, battery storage and energy efficiency."

The John Locke Foundation has also criticized Duke's plan for failing to meet requirements in the law that require a reasonable "least-cost" approach to reducing emissions, citing research that shows Duke's plans could increase the average annual cost for ratepayers by $1,030 to $1,140 per year by 2050.

The foundation has proposed a different "least cost decarbonization" portfolio that would reduce that burden and the overall cost by relying less on weather-dependent energy.

"Our analysis, filed with the NCUC docket, demonstrated how the Duke scenarios could not uphold the law's requirements for least-cost, reliable electricity to meet the emissions reductions goals, but we sent a step further: demonstrating that it is possible to provide reliable electricity without as much expense, without overbuilding, and without the threat of rolling blackouts," said Jon Sanders, director of Locke's Center for Food, Power, and Life.

"A great deal of the other plans' costs and harms to reliability come from the drive to build and — because of their well-known unreliability — consequential need to overbuild weather-dependent wind and solar facilities," he said. "Ours focuses more on adding zero-emissions nuclear capacity and relying more on low-emissions natural gas in the meantime."