North Carolina Approves Carbon Plan for Duke Energy to Achieve Emissions Reductions Mandate

The North Carolina Utilities Commission on Dec. 30 issued an order adopting an initial Carbon Plan creating a least cost future pathway to meet the carbon dioxide emissions reduction obligations of the state. Legislation enacted in October 2021 mandates a 70 percent reduction in emissions from electricity generating assets in North Carolina owned or utilized by Duke Energy Progress and Duke Energy Carolinas from 2005 levels by 2030 and carbon neutrality by 2050, while at the same time upholding the reliability and affordability of the electricity grid.

Clean energy groups involved in the proceeding have stated that the Carbon Plan runs the risk of missing the carbon reductions mandate for the electricity sector by 2030 and allows the companies to expand their usage of gas, which remains an emitting fuel, rather than use cleaner energy fuel such as wind, solar and hydro. The groups – Natural Resources Defense Council, Southern Alliance for Clean Energy, and the Sierra Club, represented by the Southern Environmental Law Center, and the North Carolina Sustainable Energy Association had also filed a plan with the commission.

On the other hand, Duke welcomed the approval and stated that it is essential for long term resource planning. The companies have already reduced emissions by more than 40 percent since 2005, by phasing out ageing coal plants. The most recent order will further incentivize carbon emission reductions.

The commission outlines a number of actions, in order for Duke to achieve their required targets. Some of the actions emphasised by the commission are as below:

• Instructs Duke to oversee two competitive procurement between 2023 and 2024, pursuing 2,350 megawatts of new solar generated to be operational in 2028;
• Authorizes the purchase of 1,000 megawatts of standalone battery storage and 600 megawatts paired with solar;
• Authorizes upgrades to essential transmission facilities to interconnect new solar projects and incur project expansion expenditures linked to additional pumped storage hydro at the Bad Creek Hydroelectric facility in South Carolina;
• Requires Duke to phase out existing coal fired generation units (over 9,000 megawatts of capacity) by 2035;
• Directs Duke to conduct a study and take into consideration the acquisition and development of wind lease areas off the coast of North Carolina;
• Requires Duke to seek to extend the licences for its existing nuclear fleet;
• Directs Duke to engage onshore wind stakeholders and economically model utility owned onshore wind in its next round of modelling;
• Authorizes a plan for the addition of combustion turbines and combined cycle natural gas fired generating capacity.

The commission is expected to review and adjust the Carbon Plan every two years, in order to facilitate a methodical transition away from fossil fuels to cleaner energy sources. The order also requires Duke to reconstruct resource additions from the 2022 Inflation Reduction Act and the 2021 Infrastructure Investments Jobs Act to achieve the carbon reduction targets.