Round Table: Energy
North Carolina is one of the leading states when it comes to the energy industry. Experts say collaboration is key in maintaining the state’s strong sector. State leaders met virtually to discuss the biggest changes they are seeing in the industry, the key to gather stakeholders and innovations taking place.
DOCTOR: What developments are you delving into, and what benefits are you seeing?
URLAUB: I think North Carolina is directionally consistent with the national and global trends toward the power mix of our economy being increasingly clean, people and policymakers asking or requiring it to be increasingly clean, as well as utilities, innovating and accelerating their movement in that direction. So all arrows seem to be aligning toward clean. Clarifying what is clean is certainly a discussion going on in North Carolina right now.
While utility-scale solar has certainly slowed down with negotiations and settlements not panning out the way everyone thought, and with competitive procurement really limiting it, what we are seeing is electric vehicles and energy storage poised to take off and see significant growth. I think there’s a lot of goal alignment around beneficial electrification, emissions, and energy efficiency, bringing in energy equity matters and innovative solutions that utilities like our electric cooperatives have been on the forefront of, such as inclusive financing. We’ve learned quite a bit and a number of those solutions are getting ready for full scale. Rooftop solar is in demand and continues to dramatically outstrip consumer access to it.
We’re moving into a period where technology and integrated planning can start to bring in distribution. I think we can start to produce the pathways to market value for utilities and industry and consumers for efficiency, distributed renewables, electric vehicles and storage.
HOTCHKISS: In talking to our members, they want reliable electricity and affordable electricity, but they also want sustainable energy. In doing so, we are committed to reducing our 2005 carbon emissions levels by 50% by 2030 and by 100%, to net zero, by 2050. So we are joining that conversation and have made that commitment as electric cooperatives here in North Carolina. The electric cooperatives actually dove in on several projects almost five years ago. We began with a microgrid on Ocracoke to look at resiliency opportunities with battery storage and solar as well as more traditional electricity generation on the island since it is in hurricane alley, and certainly we have to ensure reliability and resiliency for outage recovery.
We also worked on the innovative Butler Farms microgrid [in Harnett County]. This is especially appropriate for North Carolina. It is on a pig farm in central North Carolina. It provides an opportunity for solar, for battery storage, for a biodigester, as well as providing not only resources for the farm itself, but also electricity for surrounding homes. It’s another innovative project that delivers reliability and resiliency in a cost-effective way that provides additional value in this new environment.
FUSCO: We’re remaining focused on our customers and our customers are adopting these technologies as the costs come down. We’re seeing more distributed renewable resources at various customer classes and the adoption of electric vehicles is definitely growing. What does that mean to us? How do we need to innovate, to make that happen? That brings us to a long-standing technical problem to overcome: Each hour of electricity that is produced does not cost the same as the next. For instance, at 1 a.m., a kilowatt-hour is significantly less costly to produce than a kilowatt-hour at 5 p.m. on a hot afternoon in the summer. The good news is we’re seeing a lot of innovation with digital technologies. I think we’re very fortunate to be where we are geographically because we have a host of great suppliers locally who can help us tackle those problems.
We’re focusing on deploying digital technologies, primarily in the form of smart meters, and trying to extract as much value out of those smart meters as we can.
As an example, with COVID-19, we’re facing a lot of customers who can’t pay their bills. One thing that is helping more cities and our customers is a prepay option (which requires smart meters to implement) that we offer so customers don’t get behind.
We’re also collaborating with N.C. State University on data analytics, and what we’re doing there is looking at the impact of some of our energy efficiency measures, as well as assessing the performance of various components on our distribution system so we can optimize the distribution systems and make them work more efficiently.
DOCTOR: What do you see in the evolution of waste energy?
SIMMONS: That portion of our energy sector is growing at an explosive rate across the country. North Carolina is well positioned to not only participate in the growth of the waste-energy sector but to be a national leader. North Carolina is recognized by the National Renewable Energy Laboratory as well as USDA and some other organizations as having the third-richest bio-energy resources in the country. We have only yet begun to utilize those resources for our energy needs.
We are seeing commitments across the board to reduce our carbon footprint associated with our use of energy, not just electricity, but also in the transportation sector and in the manufacturing sector. The waste-to-energy industry, particularly as it relates to biogas, is not only a zero-emission source, it actually reverses the impact of existing emissions. Many of the organic materials that are currently underutilized are things that we may consider waste and naturally create a carbon emission as methane and carbon dioxide as they decompose in their current form. When we repurpose those organics and capture that methane and use it to displace our current uses of geologic derived, conventional natural gas, you’re not only displacing the carbon emissions from the use of a fossil gas, but you’re also capturing an existing source.
That’s why some states such as California through their California Air Resources Board consider the use of wasted organic derived biogas as having the most significant positive impact on the carbon emissions that come from the energy sector. Renewable natural gas and biogases derived from waste organics have an incredibly high value in the marketplace.
We also see commitments in the private sector. The customer and consumer demand for those energy materials is growing at a very explosive rate. Some very large manufacturers in the United States have realized that their needs for energy can’t be solely satisfied by our current clean electricity technologies and systems, but they must expand their effort to further displace their use of liquid and gaseous fossil fuels. One of the reasons that that is creating such an explosive opportunity for the North Carolina economy is by having such rich resources here. It positions us well to be an energy exporter. Currently, we consume the natural gas produced in many other states. We don’t produce our own fossil-derived natural gas.
Interestingly, North Carolina produced its own natural gas on March 23. That is the first time that renewable natural gas went into the pipeline grid system in North Carolina. It came from a system that converts manure to biogas from five pig farms down in eastern North Carolina. It’s very exciting times that have precipitated some commitments from a lot of folks to develop additional renewable natural gas resources in North Carolina.
We currently have two facilities that are interconnected with the natural gas grid that are flowing renewable natural gas. There are at least six or seven that have been proposed and approved to continue to move forward. A couple of those are landfill gas systems and some additional facilities for the swine and poultry farms in North Carolina.
You’ve seen some commitments both from utilities in the state as well as some of the large organics producers in the state and in the industry. They recognize these rich resources, they recognize consumer demands, and are making commitments for large investments to continue to propel that part of our energy industry forward.
DOCTOR: What do you see evolving with this energy economy landscape?
KAISER: Clean energy is clearly an area of innovation that’s taking place in the state. An example of that is Gov. Roy Cooper’s Executive Order 80, issued in October 2018, which was the effort to put North Carolina on the path toward reducing greenhouse gases and helps solidify the state’s interest in innovative activities within the industry. My office at the Department of Commerce recently issued a request for proposals in an effort to understand the economic development opportunities around offshore wind energy in North Carolina. This is essentially a first step to assess the state’s offshore wind-energy supply chain, the ports and other key infrastructure that would be required for undertaking innovative activities within this facet of the energy industry. Not only is this assessment going to provide insights into the state’s opportunities and inventory of businesses that can do it but also innovative opportunities for the state and for businesses to best align with and partner on to make sure that this is an area of growth for the state.
DOCTOR: What is your outlook on getting stakeholders together on some of the bigger issues? What are some of the challenges?
URLAUB: I am optimistic. I think we have a ton of learned experience and are becoming increasingly inclusive in our dialogue and ideas and solutions each year. We certainly have our challenges ahead of us. Often politics can interrupt and whipsaw the economy, business and economic opportunity. Most stakeholders have done a really good job keeping the politics out of energy as much as possible over the last 10 plus years. We now have a lot of bipartisan interest and ways that people from various value systems and political beliefs and practices can come to energy and see that it is a critical backbone of our economic future, a resilient society and economy. It keeps the ball in the stakeholders’ court to collaborate and problem solve together, which is exactly what needs to happen so that we can get down to good solutions we can align around.
HOTCHKISS: I’m also optimistic about where we’re going as a state. North Carolina historically has been very forward thinking. That’s why we’re in the position that we’re in today. I think that’s important to recognize, but I also think it’s important to recognize that pacing is critical. We want to make sure that as we manage the new frontier for the energy landscape, we’re doing it in a thoughtful and deliberate way. It’s very important that we recognize the obligation of the utilities and the state. I think we’ve done very well over the last 25 years since the [Clean Smokestacks Bill] of managing and moving forward in a thoughtful conversation about innovation, managing carbon, and other activities, [such as] accelerating renewables, etc.
We have to maintain the opportunity to do this in a way that the utilities can still work to keep the balance and efficiency of the grid so that everyone can benefit. However, with great opportunity also comes the opportunity for [groups] to try to leapfrog others. And the electric cooperatives, serving rural areas that have their own specific challenges, are very focused on making sure that we’re balancing all aspects, which includes pushing forward for innovation and unlocking those opportunities in rural North Carolina, but also keeping an eye on the cost and the pace and ensuring the alignment is right.
DOCTOR: How do we move forward with technology and innovation?
KAISER: I think we’ve got a lot to be optimistic about moving forward. Collaboration with all partners of the energy industry is critical. It’s been critical for the success we have today, and it will be critical to the success we have in innovations and change moving forward.
My office has partnered with E4 Carolinas. We’ve done research through interviews and surveys of energy sector business leaders, government leaders, researchers, and nonprofit institutions to collectively obtain their thoughts on the status of the energy industry. They’ve all basically said we need to continue to collaborate together collectively. A solution that we are trying to push for in order to continue these collaborations is the development of an energy innovation assets inventory. It would be a comprehensive, publicly available inventory that would catalog all of our energy assets across the state and even across the region so that all of the partners within our state can have this information at their fingertips, find what partners they may need to help foster those collaborations and increase communication. The overall goal is having greater information at everybody’s fingertips. It would help foster additional change and greater economic growth.
We could also have a forum for energy leadership that can help create a sustained and shared vision among all partners and players because the industry is so big, and we don’t want to leave anybody out of the picture. Having a forum that would help provide leadership to the overall industry would be critical to continue to sustain the success of the industry and make sure that our state remains a leader within the U.S. energy sector.
DOCTOR: When you look at public power authorities, what is needed right now for innovation and energy economic advancement?
FUSCO: Municipalities and electric cooperatives have a very similar business model in how we self-regulate. I think we have a really good direction in terms of where we’re moving toward in the future. We obviously get that through our collaborative efforts across the state. We — municipal electric systems — try to maintain a people-focus in what we do. Our customers live in our communities and our utilities are part of the communities.
We regulate ourselves through this connection with the community, which ties us directly to our customers. We would much prefer to have a discussion directly with our customers and understand what exactly they’re looking for in their utility.
To answer your question, what we would need is a continued focus on our workforce. It hits us at a number of levels. For the past few years, there’s been a focus across the state on the line workers and the trades. There was investment in the transmission and distribution systems, which has caused growth and a need for those skills. We work very closely with the community colleges to grow programs to give us a good population pool of those workers as job candidates. It’s a great opportunity for kids coming right out of high school to earn a decent salary and be in an exciting industry.
That’s not the only area of the workforce needed. We also need the traditional engineering technical skills. We have the university system to provide us with those candidates. I think, though, there are other needs in terms of our workforce that are just beginning to grow or develop. Our technical skill set is really expanding in scope. We need data scientists, systems engineers, and communications engineers much more than we’ve ever had in the past.
There’s also some business and customer-focused skill sets that I think the utility industry has traditionally not employed enough of. Those are the marketing people and business people, who can really interpret what customers are looking for and translate those needs into offerings that their utility can provide. ■