Powering the future of North Carolina
By Jeff Moore
The Carolina Journal
Gov. Roy Cooper earlier this month signed an executive order prioritizing offshore wind energy as part of his administration’s Clean Energy Plan, which is focused on renewables to achieve goals such as reducing emissions by 70% by 2030.
More recently, Republican lawmakers in the General Assembly have unveiled their working proposal to meet the state’s future energy needs — and there’s not a lick of wind in it. In fact, even though the lawmakers’ draft proposal would significantly boost commitments to the relatively inefficient and expensive renewables such as solar, the gist of the plan is a continued transition of coal to natural gas generation, as well as an expansion of nuclear capacity.
Which is the better approach?
Conclusions from a new research report released last week by the John Locke Foundation, Energy Crossroads: Exploring North Carolina’s Two Energy Futures, demonstrate when it comes to reliability and lower emissions, plans that avoid over-reliance on renewables and expand nuclear energy are clear winners.
Ostensibly, lawmakers and utility Duke Energy are operating on a dual mandate, so to speak, when it comes to energy policy goals. Robust, reliable, and affordable energy production and infrastructure for consumers on one hand; a pursuit of dramatically lower emissions on the other, in acquiescence to Green Energy trends.
Jordan McGillis, deputy director of policy at the Institute for Energy Research and author of the JLF report, told Carolina Journal that building upon natural gas as a major player in electricity production continues a great trajectory toward these goals.
“As the paper shows, the trajectory that North Carolina is on now, and the further additions of natural gas, will actually get the state pretty close to the Clean Energy Plan goals,” McGillis said. “It won't get the state all the way there. If the state is intent upon getting to these somewhat arbitrary figures of 70% reduction (in emissions) by 2030, we present a good case in this paper that nuclear is the least cost, highest efficiency way of doing so. Continuing with nuclear, primarily with a subsequent license renewal of the existing plants, and with potential additions of nuclear, as I describe in the paper, of either base-load nuclear or new large scale plants or, potentially, small modular nuclear."
The draft bill from lawmakers indeed calls for converting one of Duke Energy’s largest power-generating facilities in the state, the Marshall Station on Lake Norman, from a blend of coal and gas to full natural gas, but the draft language is more ambiguous when it comes to replacing others; the draft stipulates that “the Utilities Commission will hold hearings to determine the most cost-effective and reliable replacement generation at that time.”
For instance, the plan calls for retiring coal-fired plants 1-4 in Roxboro 2027, but only if there is a suitable replacement. Utilizing natural gas at this site would require tapping onto the Mountain Valley Pipeline-Southgate extension, now in litigation in the 4th U.S. Circuit Court of Appeals.
The outlier is the Allen coal-fired plant in Gaston County, planned for retirement in 2023, and to be replaced with a far more expensive 20-megawatt battery system and 70 megawatts of solar capacity.
McGillis notes that North Carolina has the opportunity to hit emission goals in ways that aren’t super costly, but he worries our energy future could be dim if lawmakers adopt too many recommendations from Cooper’s Clean Energy Plan.
“For a variety of reasons that we list in the paper, there are seen and unseen costs that would come with that, and they're just unnecessary because North Carolina is in such a strong position with its nuclear foundation,” McGillis said. “Nuclear produces about a third of the power today and it's been consistent for 40 years. With that as kind of the centerpiece of the electric grid in the state, and these natural gas additions, there's a chance to do this in a better way than the governor and his DEQ wants.”
Lawmakers appear intent to build upon that foundation.
In addition to requiring Duke Energy to prepare and submit license renewal applications, which will keep the state’s six existing nuclear facilities up-to-date, the draft directs the utility to pursue an early site permit from the Nuclear Regulatory Commission for an advanced modular nuclear facility in North Carolina.
That is a great pursuit, according to McGillis, if we want reliable energy and lower emissions. Yet, the retiring of coal plants, expansion of gas and nuclear, and the sacrifices to solar and battery installations are only part of the energy policy proposal — the rest is decidedly wonky.
“This is a complex, dense bill that includes fuel switching, early retirements, permits, and new rules on rate cases,” says JLF CEO Amy O. Cooke. “It’s not for the faint of heart.”
The bill outlines expansions of competitive procurement of renewables, adding 777 mw per year of renewable energy to the program; Multi-Year Rate Plans and Performance-Based Ratemaking, policies authors argue smooth out costs and cut red tape; decoupling, in which the link between the amount of energy a utility delivers to customers and the revenue it collects from those customers is eliminated, inexplicably; and net-metering, modeled on South Carolina’s system, in pursuit of cost savings and efficiency.
It is not hard to get tangled in those weeds, especially for stakeholders like the utility itself, their largest industrial customers, and those engaged in the renewables racket.
But for North Carolinians at large, the bottom line is what counts.
“Assuming North Carolina’s public policy goal is to reduce carbon emissions, it’s pretty simple,” says Cooke. “Nuclear and natural gas are the way to do it. They are the most affordable, reliable, clean, and safe way to reduce emissions. That won’t make the big green industrial complex, including Roy Cooper, happy because their goal is to promote industrial wind and utility-scale solar plus batteries. Unless living in the 11th century or on an energy starvation diet is your thing, huge amounts of wind and solar won’t work for our grid, our economy, our businesses, our homes, or our environment. I think most North Carolinians would prefer to have power when they need it instead of when the eco-left says they can have it.”
As McGillis notes in his paper, Duke Energy’s Portfolio D, a plan designed with Cooper’s clean energy goals in mind, would increase electric bills for North Carolina households by more than $400 each year. That cost increase doesn’t happen in a vacuum, either. North Carolina’s industrial customers would face increases of close to $50,000 each year in the scenario, compounding costs for all North Carolinians, he writes.
To hit Cooper’s 2030 goal of reducing emissions by 70% with Duke Energy’s Portfolio D, it would come at a cost of over $110 per metric ton of reduced carbon dioxide, McGillis calculates. Those costs are exacerbated by the inefficient land uses inherent to wind and solar, and the emerging waste disposal issues faced by ‘green’ energy alternatives.
Leveraging a standard nuclear energy scenario, according to McGillis, achieves the same reduction with a cost of $79.23 per metric ton; a scenario deploying a Korean-developed nuclear reactor now in use internationally would get there at only $39.98 per metric ton, roughly one-third the rate of Cooper’s plan; and, expanding natural gas’s role on the grid would reduce emissions more than 60% by 2030 at a cost of just $2.86 per metric ton.
By those numbers the basis for Republican lawmakers’ emphasis on gas and nuclear becomes clear. Its cost is dramatically lower than renewable alternatives while achieving significant emission reductions to satisfy the presumed dual mandate of the state’s next energy plan. In deciding how to power North Carolina’s future, McGillis makes clear that more nuclear and gas are the only way to hit those goals, and less solar and wind are the only ways to afford them.
