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North Carolina plans for life after ‘uneconomical’ coal

Inside a Duke Energy battery energy storage project. The company has already commented supportively of the plan and its aims. Image: Duke Energy.

North Carolina’s draft Clean Energy Plan was published last week, including the retirement of 4GW of coal and putting in place measures to drive renewable energy and EV adoption in the US state.

Governor Roy Cooper gave an executive order in October of last year which made a commitment to “address climate change and transition to a clean energy economy”. Cooper’s order, Executive Order 80, stated that by 2025 North Carolina “will strive to accomplish” three key aims: reduce greenhouse gas (GHG) emissions to 40% below 2005 levels, to increase the adoption of electric vehicles (specifically, zero-emission vehicles) to “at least 80,000” and to reduce energy consumption in state-owned buildings by at least 40% from 2002 - 2003 baseline figures.

As instructed by Executive Order No.80, the North Carolina Department of Environmental Quality’s State Energy Office has now published a draft plan which supports those aims, open to a brief period of public comment until 9 September. The policy and recommended actions document looks at short term, medium term and long term objectives and measures.

For short term implementation - i.e. within two months of the plan’s introduction, the office recommended the creation of a revised state Clean Energy Standard should include specific targets for 2030, as well as creating new incentives and targets, which could consider newer technologies such as energy storage which have not previously been included. Better mechanisms to reward energy efficiency need to be considered.

There is also the question of retiring and replacing fossil fuel plants, particularly coal and the document calls for retirement dates to be given for North Carolina’s coal plants that are shown be rapidly becoming uneconomical to operate. The same goes for “uneconomical peaking power plants”, with cooperatives and municipalities to be given more power to replace those peaking gas plants with low or zero emissions sources that can provide the same services.

There will still be significant steps for the plan to go through - and the state’s policymakers, electric system stakeholders and citizens will likely play a role in shaping it - including the recommendation that a comprehensive study now be undertaken to determine the most cost-effective options available.

The state utilities commission should also be involved in now figuring out if carbon pricing mechanisms can be applied, with North Carolina’s Investor-owned utilities currently called on to integrate the cost of carbon into their planning scenarios and integrated resource plans (IRPs). The draft points out that one of those main utilities, Duke Energy, has already committed to reducing carbon emissions from its fleet by 40% by 2030, scaling to a 60% CO2 reduction by 2050. The plan recommends starting the base CO2 price at US$5 per tonne in 2025 as an intrastate tax. The price would escalate annually by US$ per tonne. 

Value of resilience and the role of solar-plus-storage

The plan also makes key recommendations and findings that will have a more immediate impact on energy storage and the solar industry. There is discussion at length of energy network and individual energy system resilience, which is something that decentralised energy and solar-plus-storage in particular can have a role in, whether in grid-connected or microgrid or off-grid scenarios.

The State Energy Office makes mention of a pilot just approved for Duke Energy in the remote North Carolina town of Hot Springs. A community of just 600 residents will benefit from a 2MW ground mounted solar array paired with 4MW of battery storage, sized to meet “100% of the town’s peak load and to provide power for the 90th percentile of load for approximately four hours without any contribution from the solar panels”.

Storm and other disaster recovery efforts could be boosted, while conversely, the office notes that solar uptake by private citizens in North Carolina has so far been slow. Traditional cost-benefit calculations, evidenced by a recent study of energy storage in the state, show that “combined PV and energy storage are probably not economical in North Carolina”.

“If one places a value on the losses incurred from grid disruptions; however, PV+storage can potentially become a fiscally sound investment,” the authors argued, recommending the state examine the viability and benefit of strategically siting such systems at state or locally-owned facilities.

“As these projects proceed, the state should disseminate the results to promote similar thinking in the private sector,” the report’s recommendation J-1 concludes.

Elsewhere, the report also recommends that utilities should be required to develop, “innovative rate design pilots” that encourage better customer behaviour and engagement with clean energy goals, which include “peak demand reduction, better utilisation of renewable resources and strategic storage deployment”.

Duke Energy responded almost immediately to the draft’s publication with a supportive statement from the president of its North Carolina operations, Stephen De May who said that while the utility is “currently reviewing the draft plan,” the company appreciated Governor Cooper’s “leadership on energy policy for the state”.

“Duke Energy has significantly reduced carbon emissions by retiring coal and adding more renewables and cleaner natural gas. We are transitioning our system to even cleaner energy, while upholding our responsibility to provide reliable, affordable power to customers. We look forward to continued dialogue with diverse stakeholders to achieve the critical energy policy objectives for the state of North Carolina.”

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