The German energy dystopia
Advocates of mandating wind and solar often talk about these electricity generators as if they will usher in a new utopia for us all. For a local example, look no…
In June, Mitch Rolling and I conducted an analysis of the Duke Energy Carbon Plans on behalf of the John Locke Foundation. Donna King, of The Carolina Journal, explains the impact that our research has had in the Tarheel State in the article below.
Duke Energy’s plans would raise energy costs between $86 and $95 a month per household.
“We owe it to the people of North Carolina to get this right.” – Jon Sanders, director, Center for Food, Power, and Life.
Duke Energy says it has a plan to cut carbon emissions 70% by 2030, relative to 2005 levels. However, experts on both sides of the debate have reservations about Duke’s proposals being presented in a series of public hearings this summer. Duke was required to draw up a long-term plan in a law, House Bill 951, passed by the legislature and signed by the governor in 2021.
H.B. 951, titled “Energy Solutions for North Carolina,” called for significant changes to the state’s energy portfolio. It says a plan must be predicated on a “least-cost” goal, with an emphasis on emissions reductions, by retiring select coal-fired plants, bringing more natural gas online, giving the nod to nuclear, and expanding the amount of renewable energy on North Carolina’s grid.
The law requires that the N.C. Utilities Commission develop a plan for 70% reduction in carbon dioxide (CO2) emissions from public utilities in North Carolina by 2030 from 2005 levels and carbon neutrality by 2050.
The law also requires that this plan improve the reliability of the existing grid and be a “least-cost” option for North Carolinians.
In an analysis of costs and implications of each Duke plan, Center of the American Experiment researchers Isaac Orr and Mitch Rolling found that none meet the “least-cost” requirement in the law. Each plan relies heavily upon investments in variable renewable energy, like solar or wind, to hit the 70% reduction mark. To reach the goal of carbon neutrality by 2050, the plans depend on hydrogen fuel, a technology that is not yet fully developed.
The sticker shock on the plan is also rattling lawmakers and energy experts. Jon Sanders, who led the study for the Center for Food, Power, and Life at the John Locke Foundation, says researchers found Duke’s plans would cost more than $100 billion through 2050 and likely increase the cost of electricity by at least $174 per customer per month by 2050. For the average North Carolina household, Duke’s plans would raise energy costs between $86 and $95 a month.
“The reliability of the grid is going to be hampered,” said Sanders. “As an end user, we would be getting the same product that we are already getting at a higher rate, and it’s much less reliable,” said Sanders. “We would be worse off, and that is not in the spirit of the law – It is certainly not in the spirit of the North Carolina utilities law, but it is also not in the spirit of what was passed in [H.B.] 951.”
The company’s four proposals are being laid out in a series of N.C. Utilities Commission hearings, the first in Durham on Monday night, Wilmington on Tuesday, and two more meetings slated for urban areas of the state, plus two online.
Groups like CleanAIRE NC put out calls on social media for environmentalists to attend and support a carbon-neutral goal, but these groups don’t like Duke’s plans either. Joel Porter, policy director for CleanAIRE NC, says Duke’s process of developing the plans lacks transparency and doesn’t meet the legislation’s goals.
“Only one hits the benchmark outlined in 951, the other three hit the latter benchmark after the statutory deadline has elapsed,” he said. “All of them are relatively expensive, and there are pretty big question marks about technology types, the infrastructure that’s needed. Last but not least, I’d certainly mention a lack of provisions addressing equity.”
Lawmakers and Duke Energy are operating on a dual mandate, so to speak, when it comes to energy policy goals. Robust, reliable, and affordable energy production and infrastructure for consumers on one hand; a pursuit of dramatically lower emissions on the other, in deference to the green energy mandates laid out by the state’s Department of Environmental Quality under Gov. Roy Cooper.
Porter says the plans miss the mark from an environmental standpoint, relying on largely underdeveloped hydrogen technology.
“I wouldn’t say that solar and wind are the main drivers to the cost. They certainly add to the cost, but there are also some big question marks about transmission,” said Porter. “There is not a lot of detail provided by Duke with regard to transmission. Same with the natural gas pipeline that they say will be necessary for the huge expansion of methane gas that they’re calling for.”
A nuclear option
“If you were just to look at things from what’s the most efficient and reliable way of doing it, you would have to go with nuclear and natural gas for carbon reduction and maintaining a reliable grid,” said Sanders. “There is simply no other way about it.”
The reliance on hydrogen technology for future reduction of emissions is a sticking point for the plans’ opponents. According to the report, nuclear power plants can last for up to 80 years, while wind and solar infrastructure lasts 20 and 25 years, respectively.
“They would necessitate a constant ‘build and rebuild’ treadmill of capital expenditures that virtually guarantee ratepayers never have low-cost electricity after capital costs are recouped,” said Sanders.
Duke’s plan also uses the Department of Energy’s predictions of the eventual cost of energy using hydrogen technology; roughly $7.40 per million BTU. However, the current cost of energy with that technology is actually $37 per million BTU. Duke also writes into the plan to build a whole new supply chain to create the conversion to hydrogen plants. The report says Duke’s plan includes massively increasing the number of facilities.
“They are putting a lot of eggs in that basket,” said Sanders, adding that the overbuilding is largely because Duke would add intermittent sources to the grid, while having to account for the fact that these energy sources are not as reliable as other fuels like nuclear or natural gas.
“When the system would be taxed the most, a typical week in August when it gets the hottest, it’s very likely we would reach the stage when the utility would have to practice load shedding, which would be the brownouts and blackouts. … It would just overwhelm the system,” Sanders said.
If Duke goes back to the drawing board, Porter wants to see more energy efficiency in future plans.
“Duke’s draft plan basically maintains the status quo of energy efficiency upgrades,” Porter added. “By investing in making the grid more efficient, they can address a lot of their cost issues, reduce the need for fossil fuels, and make the grid far more equitable.”
Access to affordable energy for everyone in North Carolina is key to the statutory requirements in H.B. 951, and Sanders says Duke’s plans just don’t cut it.
“This is a crucial issue. This isn’t just a regular consumer product. This is something that fuels our daily lives in the depths of winter and height of summer,” said Sanders. “This actually is a life-or-death matter for people. We owe it to the people of North Carolina to get this right.”
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