On a recent episode of the Squeaky Clean Energy Podcast, host Matt Abele sat down with a group of carbon plan intervenors to discuss more cost-effective pathways to achieve meaningful emissions reductions in North Carolina. Tyler Norris of Cypress Creek Renewables, David Neal of the Southern Environmental Law Center, and Adrienne Mouton-Henderson of the Clean Energy Buyers Association share concerns with Duke Energy’s proposed carbon plan and the need for proactive transmission planning and large consumer renewable programs. They also discuss the cost-effectiveness of clean energy compared to other generation sources like coal and natural gas. What do they say needs to change with the proposed carbon plan? Read, listen, and learn to find out.
As some will remember from a previous podcast episode, Duke Energy’s carbon emissions reduction plan was due May 16, 2022. In response to the plan, intervenors from a multitude of sectors, including episode 76’s guests, filed their own proposed carbon plan scenarios or comments to the NC Utilities Commission (NCUC) to help shape proceedings moving forward on a path to the plan being finalized by December 31, 2022.
Reasons for Intervention
Artificial cap on future solar plus storage development
Tyler Norris of Cypress Creek Renewables explained why the group he’s representing, the Clean Power Suppliers Association (CPSA), decided to intervene, noting its mission to support the energy transition with development of independent, renewable resources. He also touched on implementation of the bipartisan carbon reduction mandate as a primary activity of CPSA. Because of this, the organization has raised multiple red flags with Duke’s proposed carbon plan. One issue in particular stands out to CPSA: an artificial cap on the interconnection of utility-scale solar and solar plus storage resources. Norris explained that solar plus storage is the most affordable pathway for decarbonization and that introducing a cap on these resources would be risky and costly in the long term for ratepayers. He also voiced the concern that Duke does not provide sufficient justification for the numbers it selected in artificially capping solar, a major concern for CPSA and other intervenors.
Additionally, Norris raised the concern that Duke’s plan does not take the most recent Inflation Reduction Act into consideration for its modeling, thereby altering the actual financials associated with future generation infrastructure. He noted that in order to achieve greenhouse gas reduction goals at the federal level by 2030, every state in the country needs to add 2.3 GW a year of solar, and states with the most solar resources, like NC, will need to add even more solar to their energy mix.
A need to attract clean energy investments
Change can be won or lost quickly through proactive deployment of clean energy. Host Matt Abele pointed out that in recent years, NC had dropped from #2 to #4 in solar due to a lack of access to opportunities for large commercial companies to invest in solar energy. The NCUC Carbon Plan presents the state with the chance to remain a national leader in clean energy and potentially climb back up the leaderboard. In her comments, Adrienne Mouton-Henderson elevated the importance of offering clean energy programs that would enable large commercial customers to reach their ESG and clean energy goals. Mouton-Henderson of the Clean Energy Buyers Association (CEBA) said we “looked at the carbon plan as an opportunity for us to set forth and say how can we band together with NCUC and others there, including Duke, to have more customer programs.”
She mentioned that Duke has had the opportunity to ask customers how to meet their energy-related needs but has not sufficiently done so. CEBA raised this concern in their intervening comments. Moving forward, she hopes that a compromise can be reached to have customer programs that match energy use with renewable energy production. Moreover, Mouton-Henderson emphasized the importance of offering these programs to recruiting and retaining large corporations in the state of North Carolina.
Concerns with modeling
David Neal explained that the coalition of intervenors, otherwise known as the CLEAN Intervenors, which includes the Southern Environmental Law Center (SELC), was concerned about Duke’s modeling not being reproducible. In fact, the CLEAN intervenors used the same modeling software as Duke Energy but was not able to replicate their results, ultimately putting the modeling’s reliability in question. Neal went on to explain that this lack of transparency may explain some of the artificial limits placed on solar and storage. According to Neal, Duke should not have relied so heavily on costly natural gas-fired power plants and unproven technologies like small modular nuclear reactors. Instead, the final NCUC Carbon Plan should focus on deployment of scalable and proven technologies like solar, storage, energy efficiency, and wind.
Additionally, Tyler Norris explained that CPSA had experts from the Brattle Group run scenarios to achieve compliance with the near-term carbon emissions reduction mandate by 2030. It found that the model selects more solar if an artificial cap is not imposed. Further, the Brattle model sought to pair as much storage with solar as possible because of cost efficiencies in interconnection facilities and development, leading to significant cost savings for ratepayers.
Proactive transmission planning
Recognizing the challenge of transmission constraints, Norris said that the Brattle Group has been doing work on proactive transmission planning initiatives and recommends that an improved approach be taken in the Carolinas. Mouton-Henderson added that moving away from reactive transmission planning can create other benefits, as seen in studies that show a $1 billion investment in transmission infrastructure can lead to $2 to 3 billion in benefits trickling down to customers.
Ownership of energy generation
Another challenge exists in the ownership of energy generation. Finding the right balance between utility and third-party ownership can result in lower costs for ratepayers. The Brattle model found that independent production generally remains the best option for the majority of jurisdictions, most simply because 100% of the risks are put on independent power producers instead of ratepayers. Power Purchase Agreements (PPAs) also tend to be more affordable for utilities since independent power producers can put pressure on upfront PPA prices since they have opportunities to pursue other revenue opportunities. Thus, independent power production can lower cost and lower risk.
Moving Forward with the Final NCUC Carbon Plan
The conversation ended with overarching considerations to enable NC to achieve its carbon reduction mandates in a manner that is equitable and at the lowest cost to ratepayers. Mouton-Henderson brought up the importance of looking beyond utilities to evolve the business model and invite more stakeholders to the table to find scalable solutions.
Neal elevated a need to invest in energy efficiency measures to address high energy burdens in low- to moderate- income households. Doing so can effectively solve the problem of solely seeking costly electric generation build out, namely natural gas plants that have not been constructed yet. Now that the advocates and third-party organizations have provided their own modeling, the NCUC will have to weigh all of the proposals on the table to draft its own final Carbon Plan by the end of the year. NCSEA would like to thank its fellow clean energy advocates and carbon plan intervenors for sharing their insights on this episode! Listen and subscribe to the Squeaky Clean Energy Podcast wherever you stream to hear the full conversation and learn more about the carbon plan. Also, be sure to stay connected with us on Instagram, Twitter, Facebook, and LinkedIn.