Duke Energy’s plans for new gas in N.C. on a collision course with new Biden power plant rules | H2-CCS Network (2024)

by Elizabeth Ouzts, Energy News Network

Duke Energy is already under fire in North Carolina for its plan to blow off a state deadline to curb carbon pollution while also building a massive new fleet of fossil fuel plants.

Now, the company’s blueprint is locked on a collision course with fresh rules from the Biden administration, which target coal and new natural gas plants and take effect in eight years.

“Duke is going to have to go back to the drawing board,” said David Neal, senior attorney with the Southern Environmental Law Center, “and come up with an alternative that is compliant with the rules.”

While much focus on the long-awaited Biden rules has centered on coal, their impact on natural gas is arguably more significant. Duke isn’t alone among American utilities in being forced to re-examine long-term generation plans as a result.

“We think it’s important for every utility and every commission to take a step back,” said Amanda Levin, director of policy analysis with the Natural Resources Defense Council.

But even as the federal regulations underscore a law unique to the state, it’s not clear if North Carolina regulators will take a beat – or even if there’s time for them to corral Duke and an array of stakeholders to rework, vet, and approve a new carbon reduction and long-range plan due by the end of the year. That’s why many advocates say debate over the utility’s immediate next steps will be crucial.

“It’s going to be important to adopt a near-term action plan that really is ‘least regrets,’” said Neal, who’s representing numerous clean energy groups in the proceeding on Duke’s generation plans. “The new rules just put further emphasis on what we already knew was true: we’re going to have to accelerate the adoption of clean resources.”

‘Not… achievable on the timelines presented…’

Duke’s existing fleet of natural gas-fired plants aren’t affected by the new Biden rules. Nor are the smaller gas plants Duke proposes to occasionally satisfy peak demand and serve other limited roles on the electric grid.

But the company plans at least five large, combined-cycle plants in the Carolinas that are impacted by the rules. The four projected for North Carolina include a 1,360-megawatt plant in Roxboro, about an hour north of Durham, for which state regulators are now weighing a permit application.

Natural gas is a fossil fuel, but Duke deems the Roxboro plant and others like it essential to the zero-carbon electricity future that state law mandates by 2050. These baseload generators can back up sources like wind and solar to ensure reliability. At the point of combustion, they produce about half the carbon pollution of coal. And in theory, hydrogen molecules separated from chemical compounds could ultimately supplant gas as a fuel, bringing the plants’ carbon emissions down to almost nothing.

“Natural gas is available 24/7 — with fewer emissions than coal and at a lower cost than renewables alone,” Duke said on its website this year, around the time it asked regulators for permission to build the Roxboro plant. “The new [Roxboro] units would be designed to operate on carbon-free hydrogen in the future.”

But critics say this rationale is flawed in virtually every respect. The cost of natural gas is on the rise, and one recent study showed it was a major driver of recent Duke rate hikes in parts of North Carolina. In December 2022 during Winter Storm Elliott, gas plants failed when they were needed most — in the wee, frigid hours before the sun rose — helping to cause rolling blackouts that impacted half a million customers in the state. Drilling and transporting gas leaks methane, a greenhouse gas 80 times more powerful than carbon, nearly canceling out reduced carbon pollution from smokestacks.

As for hydrogen, experts believe it can serve a small role in a zero-carbon economy — but mostly not in the power sector. Even if it’s carbon-free when burned, hydrogen made from fossil fuels is hardly nonpolluting and also inefficient. Hydrogen fuel produced from renewables should be reserved for limited applications, they say, such as long-distance aviation fuel or to power the few gas plants still running in the middle of the century.

“In our modeling,” said Levin, “hydrogen in the power sector is used just for that last 5% of the decarbonization of the entire grid.”

Still, the power plant rules promulgated by Biden’s Environmental Protection Agency don’t wrestle with reliability, ratepayer impacts or even methane leakage. They cover carbon dioxide pollution alone, and they’re designed to reduce what’s emitted from the smokestack by 90% beginning in 2032.

That limit is based on carbon capture — in which carbon dioxide is sequestered underground rather than released into the atmosphere — a technology widely viewed as infeasible in North Carolina because of its geology. And while other techniques that would achieve the same pollution cuts are allowed under the federal rules, none are yet ripe.

One candidate is now being developed at utility scale in Texas but won’t be deployed until at least three years from now. As for hydrogen, it would have to fuel 96% of Duke’s new baseload gas plants beginning in 2032 to meet the emissions limit — an impossible feat according to the company’s own communications with regulators.

Duke’s current forecast shows its gas fleet running on about 3% hydrogen beginning in 2041, then “holding steady until significantly more hydrogen is required to meet carbon-neutral by 2050,” to comply with state law. And in a brief discussion of the impending federal power plant rules in its August draft of its long-term plan, Duke noted:

“Hydrogen is an important and potentially transformational fuel for the future of the resource portfolio, [but] the volumes necessary to utilize the hydrogen compliance pathway are not thought to be achievable on the timelines presented.”

‘It’s a pretty huge gap’

Thus, if regulators allow Duke to build large new baseload gas plants, the company can only run them 40% of the time or less, beginning in 2032 and until technology becomes viable to slash their emissions.

The Roxboro plant, which Duke plans to put into service at the beginning of 2029, would operate at its planned capacity for just three years in that case. Afterwards, its vaunted ability to provide around-the-clock electricity would be severely curtailed.

Multiply the Roxboro conundrum by five, and the mismatch between the Biden rules and Duke’s gas ambitions becomes clear.

In its August discussion of the expected Biden rules, Duke said it considered running its new combined-cycle baseload plants at 50%. Making up for the resulting difference between demand and supply, including building another large gas plant that would run at half-speed, would require an extra $3.6 billion, the company estimated.

Tyler Norris, a former vice president at Cypress Creek Renewables and a PhD candidate at Duke University, estimates that if the 6,800 megawatts of baseload gas plants Duke announced in January were planned to run at 75% and had to ratchet down to 40% operations, the difference would be greater still. Filling it only with solar could require 9,500 megawatts of capacity in a single year — nearly double what’s online in Duke’s territory today.

“That’s probably on the high end,” said Norris, but, “it’s a pretty huge gap. Something’s going to have to change in the plan.”

Then, there’s the question of whether it makes sense for ratepayers to pay to fill that gap, especially if they’re also shelling out full price for underutilized plants.

“We’re all paying for these plants that admittedly have to sit idle more than half of the time?” asked Dave Rogers, deputy director for the Sierra Club’s Beyond Coal campaign. “Should customers really be forced to pay for those?”

Adhering to the Biden rules on coal plants appears more straightforward.

Duke must shut down its entire coal fleet by the start of 2039, and any plants still running in 2032 must be fired partially with gas. The utility already plans to meet that deadline for eight of its 12 remaining coal smokestacks, covering six sites. Two outliers in Belews Creek, just outside Winston-Salem, can already be fueled with gas. That leaves two units in Roxboro, about an hour north of Durham, that the utility now plans to keep online until 2034.

“The logical thing is to retire that coal plant at least a couple of years earlier. Whatever replaces it will be lower cost,” said Rogers. “That’s the big thing in front of the commission as it pertains to the [coal plant] rules.”

Timing also looms large. State law requires Duke to curb carbon emissions 70% by 2030, with two years’ wiggle room. If regulators authorize a nuclear or wind project that causes logistical delays beyond Duke’s control, the postponement could be indefinite. The company now hopes to exploit the latter loophole, with its preferred path to net zero achieving the 70% benchmark by 2035 or even 2037.

With their deadline of 2032, however, the Biden rules help bolster the case for Duke to rein in its carbon emissions sooner. Doing so wouldn’t just make it easier for the utility to meet the ultimate goal of near-zero emissions by midcentury. It would also significantly reduce overall carbon levels in the atmosphere.

“The thing about climate is it’s not just about achieving net zero in one year and one year only,” said Levin. “Climate is a cumulative emissions problem. If you’re doing status quo until the year you’ve made a net zero commitment, you’re not consistent with a 1.5 or 2 degree warming trajectory.”

No change to the ‘path forward’?

Still, while advocates have long pressed Duke to build more battery storage, solar, and wind in place of gas and coal, making the switch in the complex utility modeling tools is no simple task, with a host of variables involved — from transmission capacity to reliability to siting.

“Duke has already submitted its modeling twice now. I doubt that either North or South Carolina commissions will want to do another round of that at this point,” said Maggie Shober, research director for the Southern Alliance for Clean Energy, on a recent webinar about the Biden rules. But, she added, “this will absolutely come up in the process before the [North Carolina Utilities] commission.”

For its part, Duke hasn’t indicated any plans to re-do its projections.

“While we are analyzing the final rules, our view is that [they do] not change our path forward in North Carolina as we continue retiring our coal plants and supporting the state’s unprecedented growth with an all-of-the-above approach that’s designed to deliver affordability and reliability for customers,” company spokesperson Bill Norton said in an email. “Natural gas remains an essential resource in this diverse mix that can be dispatched to meet demand 24/7.”

If that position holds, and state regulators don’t seek to change it, it raises the stakes considerably for the “near-term action plan” expected as part of the plan due by the end of the year, as well as the permit application pending right now for the Roxboro plant.

That short-term plan, said advocates, shouldn’t just account for the risk of new gas resources and the timing of coal retirements, but also allow for more renewables by removing the annual connection caps Duke proposes for both battery and solar.

“I think this is an excellent opportunity,” said Norris, “to revisit the potential to achieve a higher interconnection rate for zero-carbon resources.”

This article first appeared on Energy News Network and is republished here under a Creative Commons license.Duke Energy’s plans for new gas in N.C. on a collision course with new Biden power plant rules | H2-CCS Network (1)

This post appeared first on Power Engineering.

Duke Energy’s plans for new gas in N.C. on a collision course with new Biden power plant rules | H2-CCS Network (2024)


What is the carbon plan for Duke Energy in North Carolina? ›

WHAT IS THE NORTH CAROLINA CARBON PLAN? The North Carolina Carbon Plan was established by bipartisan legislation in 2021. The law tasks our utilities commission with developing a plan to reduce carbon pollution from the electric power sector by 70% by 2030 and go net-zero by 2050.

What are the plans for the future of Duke Energy? ›

“Duke Energy is also pursuing emerging technologies needed in the 2030s and beyond to reach our climate goals, including plans to build and operate the nation's first solar-to-100% hydrogen fueled turbine, expected to be operational by year-end.”

What nuclear plants does Duke Energy own? ›

Brunswick Nuclear PlantMcGuire Nuclear Station
Catawba Nuclear StationOconee Nuclear Station
Harris Nuclear PlantRobinson Nuclear Plant

What is the fuel source for Duke Energy? ›

Duke Energy operates a system of generating plants that operate on natural gas and/or fuel oil (diesel), including simple cycle and combined cycle combustion turbines.

What is the NC carbon reduction plan? ›

Also, this EO aims to reduce economy wide emissions by 50% between 2025 and 2030 and achieve net-zero emissions no later than 2050. This EO also established the need for NCDOT to develop the N.C. Clean Transportation Plan (NCCTP). More on the NCCTP is outlined in its respective section below.

What is a carbon credit program? ›

What are carbon credits and how do they work? Carbon credits are measurable, verifiable emission reductions from certified climate action projects. These projects reduce, avoid or remove greenhouse gas (GHG) emissions.

What is the 10 year plan for Duke Energy? ›

The company's planned investment of $145 billion over the next 10 years for critical energy infrastructure is essential to meeting these customer needs and achieving net-zero carbon emissions by 2050 while also creating substantial economic benefits for the communities it serves.

What is the energy transition update for Duke Energy? ›

Duke Energy is executing an ambitious clean energy transition, keeping reliability, affordability and accessibility at the forefront as the company works toward net-zero methane emissions from its natural gas business by 2030 and net-zero carbon emissions from electricity generation by 2050.

Is Duke Energy being bought out? ›

CHARLOTTE, N.C. – Duke Energy (NYSE: DUK) today announced it has completed the sale of its unregulated utility-scale Commercial Renewables business to Brookfield, operator of one of the world's largest publicly traded, pure-play renewable power platforms. The sale agreement was previously announced on June 12, 2023.

Who owns the most stock in Duke Energy? ›

What percentage of Duke Energy (DUK) stock is held by retail investors? According to the latest TipRanks data, approximately 46.94% of Duke Energy (DUK) stock is held by retail investors. Vanguard owns the most shares of Duke Energy (DUK).

Is there nuclear power in NC? ›

North Carolina has four nuclear power plants that serve the state. A major part of the state's population lives or works near one of these nuclear plants.

What did Duke Energy use to be called? ›

Duke Power merged with PanEnergy, a natural gas company, in 1997 to form Duke Energy. The Duke Power name continued as the electric utility business of Duke Energy until the Cinergy merger. Duke Energy Field Services near Palestine, Texas. The facilities include refineries and oil wells throughout the region.

Is Duke Energy in debt? ›

Total debt on the balance sheet as of March 2024 : $82.32 B

According to Duke Energy's latest financial reports the company's total debt is $82.32 B. A company's total debt is the sum of all current and non-current debts.

What percentage of Duke Energy is natural gas? ›

In financial year 2023, coal accounted for 12.8 percent of total electricity generation by the North Carolina-headquartered utility company, while natural gas and oil made up the greatest share at 33.3 percent.

Does Duke provide natural gas? ›

Duke's natural gas utility companies also distribute gas in the Carolinas, Kentucky, Ohio, and Tennessee through its regulated utility subsidiaries Piedmont Natural Gas and Duke Energy Ohio.

What are the Duke carbon goals? ›

In 2007, Duke University committed to being carbon neutral in 2024. This commitment led to the development of Duke's first Climate Action Plan in 2009.

What is the strategic plan of Duke Energy? ›

Duke Energy is executing an aggressive clean energy strategy to create a smarter energy future for its customers and communities – with goals of at least a 50 percent carbon reduction by 2030 and net-zero carbon emissions by 2050.

What is the Duke renewable Advantage Program? ›

Duke Energy's GSA program, which supports renewable energy development, provides large nonresidential customers the opportunity to offset their power purchases by securing renewable energy from projects connected to the Duke Energy grid.

Is Duke Energy raising rates in NC? ›

The company is proposing a gradual increase over three years in a Multiyear Rate Plan (MYRP). If approved by the NCUC, electric rates will increase about 10.5% for residential customers in the first year, followed by an additional 3.8% in year 2 and 3.6% in year 3.


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