The Future of NC: Power plays

 In Features, February 2016

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The clouds have rolled in, blotting out the sun for days. At night, here on the outskirts of Elizabeth City, blinking red lights warn airplanes of the tall wind turbines west of town. A couple, retirees drawn to northeastern North Carolina by the pleasant climate, grouse about the weather forecast — more rain. Mainly it’s just a nuisance. Last week, when it was sunny, power for their television and nearly everything else in their home streamed in through panels in their backyard and now is stored in a box on the wall of their garage.

Home-scale electric storage batteries were a novel idea back in 2015, when Tesla started selling the devices using similar technology as in its electric cars. Duke Energy Corp. also was experimenting with the product then, trying to solve the riddle of how to store energy when there is no sunshine for solar panels or wind for turbines. By 2026, technology advances have loosened the retired couple’s reliance on the conventional power grids of Duke Energy or Dominion Resources Inc., enabling them to benefit from sustainable clean energy.

“Transformational change,” David Fountain calls the potential of utility-scale electricity storage. James Buchanan Duke would agree, more than 100 years after drought nearly drained the Catawba and Yadkin rivers, forcing the industrial tycoon to find alternatives to hydroelectric power. For the next century, coal became North Carolina’s energy king. Now, says Fountain, North Carolina president of Duke Energy, the coming decade represents the twilight of Buck Duke’s favorite fossil fuel.

For an industry that once moved at a glacial pace, change is coming in galactic scope.  “In 2005, coal was about 35% of our generation source,” Fountain says. Now, it’s about 27% and by 2026, it’ll drop to about 19%. “In the last 10 years, we’ve retired half of our coal fleet in North Carolina. A significant part of that has been the transformation to natural gas.” His boss puts it even more forcefully. “Coal is not an option,” Lynn Good, CEO of Duke Energy, the nation’s largest utility, said in a speech last year.  “There will not be any new coal built in the U.S.”

The decline of coal stems from increased concern about greenhouse pollutants such as carbon dioxide. It’s also a costly albatross for Duke after a massive spill of ash and contaminated water from a closed plant into the Dan River near Eden in 2014. Duke has spent hundreds of millions of dollars cleaning up coal plants, and Fountain says it has cut carbon-dioxide emissions by 25% since 2005, and others such as sulfur dioxide by as much as 93%. 

Surprises, however, lurk in 2026 and beyond. Do batteries play a role in North Carolina’s utility-scale power future? Will nuclear energy, written off as hopelessly expensive to build and dangerous after the 2011 Fukushima disaster in Japan, disprove its obituaries? Will clean energy like solar and biofuels gain with advances such as more efficient solar panels and wind turbines that turn even slight breezes into electricity, or will politics create difficult obstacles?

Natural gas, barely more than a gleam in Duke Energy’s eye a few decades ago, could be the top energy surprise in 2026. Natural gas was so scarce in 1978 that Congress banned it for generating electricity to reserve more for residential purposes. But production has exploded since 2005 because of hydraulic fracturing, which releases large quantities from shale. Most has come from Pennsylvania, West Virginia and Ohio. By 2026, sites in North Carolina’s Chatham and Lee counties could be pumping gas, although low prices and environmental opposition may make the region’s output unattractive compared with many other areas. For now, it is more economical to tap shale elsewhere.

A more potent impact, as soon as late 2018, will stem from the $5 billion Atlantic Coast Pipeline, being built by a consortium mainly of Dominion, Duke and Charlotte-based Piedmont Natural Gas Co., which is being acquired by Duke. The pipeline could pour natural gas through eight central counties, ending in Robeson, and ultimately into a new fleet of gas-powered power plants. By 2030, Duke expects to build at least nine natural-gas plants in the Carolinas capable of generating more than 8,000 megawatts of electricity. The first new plant is likely to be in western North Carolina because Duke wants to close its aging, 376-megawatt Asheville coal plant and replace it by 2019 with natural-gas units. Utility executives say the new plants reduce carbon and other emissions and can be powered up and down more quickly than coal or nuclear ones, depending on demand. The dependence on natural gas also has a big impact on nuclear, which Duke expects to still make up about a quarter of Tar Heels’ power in a decade.

“We’ll continue to examine nuclear construction, but with natural-gas prices as low as they are, we have to evaluate all cost factors,” Fountain says. For now, low gas prices are  delaying construction of nuclear plants, which remain expensive despite technological advances. Only two are under construction in the Southeast, in Georgia and South Carolina, at a combined cost of about $10 billion.

Duke has applied to the federal Nuclear Regulatory Commission for a license to build a new plant, but that appears to be a strategic ploy in an arena in which plant licensing takes years. More likely, Duke’s existing nuclear-plant licenses may be extended by 20 years or more, precluding new starts. Nuclear will also remain a large part of Dominion’s “all of the above strategy,” which also banks on coal, natural gas, wind power and new solar farms, says spokesman David Botkins. Richmond,Va.-based Dominion serves about 120,000 Tar Heel customers, mostly in northeast North Carolina.

The role of renewable energy in North Carolina’s 2026 power pantry is an enigma. The industry already portrays itself as a hidden behemoth, and Ivan Urlaub, executive director of the N.C. Sustainable Energy Association based in Raleigh, says the state in 2015 passed one gigawatt in solar capacity, or enough to power a city larger than Rocky Mount. Some 1,200 companies are involved in various aspects of clean energy, employing as many as 40,000 people, according to a Research Triangle Institute study.

Duke pulled about 8% of its energy output in 2015 from renewable sources with 22 solar facilities completed or under construction, representing about 400 megawatts, Fountain says. The investment entails more than $1 billion. Corning Inc., the glassmaker that employs about 5,000 workers at five plants in the state, will buy nearly two-thirds of the output of a new 80-megawatt solar farm being developed by Duke Energy Renewables in Edgecombe County. It’ll be the biggest east of the Mississippi.

The hurdle for utility-scale renewable energy has been the inability to store it when there’s no sunshine or wind. Utility-scale batteries might change the picture. “We’ve got multiple test projects underway on the role energy storage can play, and we currently own about 15% of the energy-storage capacity in the U.S.,” Fountain says. “It’ll be a critical piece of our infrastructure going forward.”

The company has operated battery storage at a 36-megawatt wind power project in Texas for more than four years, using old-technology lead-acid batteries. It’s now converting to newer lithium-ion versions.

North Carolina should play a role in the battery industry with Swiss-owned Alevo Energy Group SA building utility-size batteries in the former Philip Morris cigarette factory in Concord. It expects to employ as many as 6,000 workers within five years. Celgard LLC, also located in Concord, and ABB Group, another Swiss company with a Cary plant, also are involved in related technologies.

Renewable energy’s promise hinges on politics because few issues have sparked as much division among lawmakers. A 2007 law credited with propelling the state to the fourth-largest producer of solar energy faces repeated repeal efforts by conservative lawmakers who say public subsidies skew the free market and make electricity more expensive. The law mandates that Duke and other utilities obtain 12.5% of their energy from renewable sources, largely wind and solar, but also biomass, geothermal and others, by 2021. Even if officials slash that requirement, the renewables industry is large enough to sustain itself, Urlaub and others say.

Duke’s official projection for 2030 shows 11% of its output coming from renewable sources, with other energy efficiency projects pushing it above the state’s 12.5% standard. Fountain insists the company is committed to clean energy.  “We’re going to continue to invest in solar and renewables, in North Carolina particularly, regardless of short-term public policy.”

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