North Carolina’s renewable-energy industry is positioned for success
Appeared as part of the Energized sponsored section in the January 2018 issue of Business North Carolina
North Carolina had the second-most installed solar capacity of any state through 2016. Developers, such as Mooresville-based SunEnergy1 LLC, are building utility-scale solar farms in eastern North Carolina. SunEnergy1 has developed about one-third of the state’s installed solar capacity. Photo provided by SunEnergy1
By Teri Saylor
North Carolina has many riches, but none are fossil fuels. There’s nary a lump of coal or drop of crude to be found from Manteo to Murphy. But it makes up for its lack with plentiful sources of renewable energy.
Washington, D.C.-based Solar Energy Industries Association says North Carolina had the second-most installed solar capacity in the country through 2016. Its biofuel resources are the country’s third richest, says Gus Simmons, vice president and director of bioenergy for Winston-Salem-based consulting firm Cavanaugh & Associates. “There is an immense resource base, and most dominant are agricultural resources such as pork, poultry, crops and forestry products.”
Simmons is working with Wilmington-based Optima BioEnergy, which uses anaerobic digestion to turn hog waste into natural gas. Piedmont Natural Gas Co., a subsidiary of Charlotte-based Duke Energy Corp., recently agreed to build lines that will allow the natural gas Optima produces at three Duplin County hog farms to be used as renewable energy. “The amount of natural gas we produce is really a small fraction of the amount we consume in the state, but it’s an important first step,” he says.
The Optima project comes at an opportune time for the state’s hog industry, says Angie Maier, the North Carolina Pork Council’s director of government affairs and sustainability. “Because of a 2007 moratorium on new swine farms in North Carolina, there has been no new swine-farm expansion, and renewable-energy opportunities give the farmers a new use for their product. The Optima project is exciting — the first of its kind in North Carolina — and represents the first native natural gas to be harnessed from our state’s resources.”
Even though North Carolina is home to plenty of pigs — 9.3 million in 2016, according to the U.S. Department of Agriculture — making waste-to-energy economics work is tough, Maier says. “The viability of using hog waste for energy depends on production methods, the size of the farms, how the swine are raised and how the waste is maintained. You have to have a lot of pigs concentrated in close proximity. Optima’s work is a small but important part of what is to come later.”
North Carolina is harnessing its abundant sunshine, too. Enough solar energy is generated, mostly in eastern counties, to meet more than 5% of the state’s electricity needs, according to a 2017 Environment North Carolina Research and Policy Center report. Solar production in North Carolina increased to 4,016 gigawatts in 2016, up from 1 gigawatt a decade earlier.
Solar energy production isn’t showing signs of slowing. Mooresville-based SunEnergy1 LLC has helmed large-scale solar power projects on the East Coast for nearly a decade, says company CEO Kenny Habul. It sources land, executes power-purchase agreements, and designs, engineers and constructs solar farms. The company owns or leases 10,000 acres in development, with 5 gigawatts of power in the pipeline.
SunEnergy1 developed Summit Farms with 250,000 solar panels on 700 acres near Moyock in Currituck County and is currently developing its neighbor, Ranchland, another 700-acre site that’s home to 250,000 solar panels as well. “Last year we sold the Summit site to Dominion Energy of Virginia, and the energy will be used to power the Massachusetts Institute of Technology, Boston Medical Center and Post Office Square Redevelopment Corp. of Boston,” Habul says. Ranchland is owned by SunEnergy1 and sells power to Digital Realty Trust Inc. and other corporate and institutional partners.
John Morrison is chief operating officer of San Francisco-based solar-power developer EcoPlexus Inc. and former assistant secretary of energy at N.C. Department of Commerce. He says the renewable energy tax credits that the N.C. legislature put in place more than a decade ago are responsible for the state’s lofty position in the solar-energy industry. “The typical solar farm averages 30 to 40 acres in size and generates about 5 [megawatts] of energy. Since 2007, a lot of solar farms were set up and are running at that capacity.”
North Carolina lawmakers passed and Gov. Roy Cooper signed House Bill 589 last summer. It changes the way solar energy is generated in the state, including a competitive solicitation process for new utility-scale solar farms such as those that SunEnergy1 develops. It also adds a rooftop solar leasing program and one that allows utility customers to offset their electricity purchases by selling back the renewable energy they generate. And it calls for the state’s solar-energy capacity to double over the next four years.
Before these changes, solar-energy developers operated on a standard contract that was established by the N.C. Utilities Commission. It was viewed as beneficial for small developers. “Under standard contracts, small companies knew they could invest in solar sites and get viable returns,” Morrison says. “They knew how much they needed to invest, and they knew how to budget for their sites.”
Roger Bredder is Tempe, Ariz.-based First Solar Inc.’s vice president for business development, but he works from Charlotte. He says the newly minted renewable-energy law benefits large solar developers. It helps transition the market to utility-scale projects — 50 to 100 megawatts — and that will bring more growth. “It is phenomenal how far we’ve come, and there’s a lot more room for growth. Adding to that is the costs are falling. The price of [panels] has dropped 50% from when I started. The cost of building solar plants is becoming cost competitive, too.”
There’s more help in the renewable-energy law. It expedites reviews of connecting animal waste-to-energy projects to the grid, for example, which could spur their growth. Maier believes that gives hog farmers reason to be optimistic. “The Pork Council recently met with about 100 farmers in Duplin County about new opportunities, and if the economics work, they’ll be on board. Their margins are thin. They can’t take on expense without an expected return, but I’m starting to see their heads nodding, and they are starting to get it.”
The law includes a moratorium on permits for wind farm construction and expansion until the end of the year. That stopped two projects that were proposed for eastern North Carolina and caused this sector’s sails to go limp in the state.
Morrison predicts solar energy will continue to be a significant part of the energy generation portfolio, thanks to technological developments. “Over the next three to five years, we’ll see energy storage come into play. Electricity has to be consumed as it is generated. Click on a switch and energy flows, and the times when it is not flowing, a generator kicks in. So, there is the development of batteries and other storage devices that will play an important role.”
Simmons is equally optimistic about biofuels. “The future is fantastic. Our rich resources give us a huge opportunity to harvest biomass, put it to use, and to put us on the path to increased energy security and independence.”
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