On Monday, Duke Energy submitted a proposal to the North Carolina Utilities Commission on how to lower its carbon emissions.
The Charlotte-based energy company is required under House Bill 951 — signed into state law last October — to lower its emissions by 70% compared to 2005 levels by 2030, and to reach carbon neutrality by 2050.
The proposal includes four different options for how to achieve these goals. One option reaches the 70% reduction target by 2030; the others reach that by 2032 or 2034.
The state utilities commission may grant Duke Energy an extension if regulatory and construction delays arise, or if the grid’s performance is questioned.
All of these options would still reach carbon neutrality by 2050, and all incorporate retiring coal-fired power plants in North Carolina by 2035.
All options also rely on using a mix of different energy sources, including onshore and offshore wind; grid improvements and energy efficiency; more solar and nuclear power; battery and hydroelectric power storage; and more natural gas-powered plants.
“We are committed to bringing our customers and communities affordable, reliable, carbon-free energy as quickly as possible,” said Stephen De May, Duke Energy’s North Carolina president, in a press release.
Duke is focusing on a "three-pronged approach" to reach its goals: reducing the amount of energy the company needs to produce, adding more carbon free resources and increasing energy storage.
The first option achieves the 70% reduction goal by 2030. This option requires 800 megawatts (MW) of offshore wind and 1,800 MW of new solar power and new battery energy storage capacity.
Duke Energy recently won the lease to build an offshore wind farm off the coast of Wilmington. The area is capable of generating up to 1.6 gigawatts of energy. However, offshore wind development takes several years. Avangrid Renewables won the lease to its Kitty Hawk project in 2017, but construction isn't set to begin until 2026.
The second option reaches the 70% reduction goal by 2032 and aggressively focuses on offshore wind. This option would focus on deploying 1,600 MW of offshore wind energy by 2032. In its plan, Duke Energy says it would need more time "to construct needed additional transmission, enabling greater contributions from grid edge resources and customer programs, and a slightly less aggressive pace of new solar and energy storage additions."
Option three proposes reaching the 70% reduction goal by 2034 with new nuclear power. This is the only option that does not include offshore wind. The plan says extending the timeframe allows "additional time for deployment of solar, wind, battery, pumped storage hydro and grid edge resources to contribute to meeting the interim target."
Finally, the last option incorporates both offshore wind and new nuclear power to reach the 70% reduction goal by 2034. This target would add 285 MW of new nuclear power and 800 MW of offshore wind in the early 2030s. Duke Energy is requesting more time to "build out required solar, onshore wind, battery and pumped storage hydro capacity."
The last three options would result in slightly lower average annual increases on retail power bills for the 4.4 million North Carolina and South Carolina customers through 2035 compared to reaching the 70% reduction in 2030, according to Duke Energy.
Company officials cautioned that the potential annual customer bill increases, ranging from 1.9% to 2.7%, could change and likely would be zero or minimal in the first few years of any plan that regulators approve.
Environmental advocacy groups are still reviewing the proposal, but are expressing cautious optimism.
"I appreciate that there are significant amount of clean energy resources, like wind and solar... in this plan. That's a good start," said Gudrun Thompson, senior attorney with the Southern Environmental Law Center. "[But] I am troubled by the fact that Duke seems to have baked some level of new gas generation into each of the portfolios that it's presenting to the commission. At a time when... we just can't afford to be building new gas plants."
Natural gas is a fossil fuel that emits less carbon than burning coal, but scientists still warn against its use.
Duke Energy says natural gas is needed to ensure reliability. The company also claims that new natural gas facilities will be capable of burning carbon-free hydrogen in the future.
"The retirement of substantial coal units and integration of unprecedented amounts of intermittent renewables will require new flexible natural gas resources to balance the system during this energy transition," the plan stated.
Environmental groups are expected to file an alternative plan and commissioned expert analysis by July 15.
State officials and Duke Energy will also hold public hearings over the plan in July and August. The state utilities commission must approve a final plan by the end of 2022. The commission will then revisit the plan every two years.
The Associated Press contributed to this report.
