The battle to block Duke Energy's new gas plant
This story was first published by Energy News Network. Duke Energy has been laying the groundwork for a new gas power plant in North Carolina’s Person County for years, touting it as the “next generation” of electricity production and lining up support from local politicians eager to hold on to the utility’s tax dollars.With acknowledgement from regulators and even some clean energy experts that new gas infrastructure may be needed as Duke shutters its coal fleet, the long-planned gas turbines once seemed like an inevitability.But now, the 1,360 megawatt combined-cycle facility poised to replace the company’s aging coal smokestacks on Hyco Lake has become a major point of contention. And while the odds still favor Duke, community members and advocates alike say they have cause for hope.First, there’s the reality of new Biden administration rules on fossil fuel power plants. Beginning in 2032, any new large, combined-cycle plant like that proposed in Person County must either cut its carbon emissions drastically or run 40 percent of the time or less.Because North Carolina’s geology isn’t suited to carbon sequestration and emissions-free hydrogen fuel isn’t yet viable, the company would have to limit the plant’s operations — either making it unavailable at key times or requiring costly startups and shutdowns, said Ridge Graham, the North Carolina program manager for Appalachian Voices.“Either of these options make this combined cycle plant a bad investment and a much more expensive form of electricity generation than clean or renewable energy sources,” Graham told commissioners at a public hearing in Roxboro last month. “This is especially true for Duke customers as the purchase of gas fuel is passed on and has led to multiple rate increases through riders on electricity bills since 2017.”Bolstering that concern, Public Staff, the state’s ratepayer advocate, notes that Duke lists a proposed new pipeline to transport gas to the plant as an operating cost that would “presumably” be recovered through the fuel rider.Even if the actual fuel costs were cut in half, engineers for the agency said, “total transportation charges would mostly be unchanged within the ‘Fuel’ category because of the significant pipeline costs that would be necessary to provide natural gas service to the Roxboro site.”In addition to these charges, ratepayers would also have to pay the full cost of the plant, amortized over 35 years, plus Duke’s regulator-approved profit margin, energy analyst Elizabeth Stanton said in written testimony on behalf of Sierra Club, Southern Alliance for Clean Energy, and the Natural Resources Defense Council.What’s more, she noted, ratepayers would cover whatever “replacement resources” were needed to meet demand “after the facility’s expected generation was decreased.”In contrast, Stanton says, Duke’s estimated costs for ratepayers assume the plant will run at over 40 percent capacity through 2042 — a scenario squarely at odds with the new Biden administration regulation.“Duke needs to account for the rule in their planning, and they have not done that,” Mikaela Curry, a North Carolina-based campaign manager at the Sierra Club, said in an interview. “Who pays for a gas plant that can only run 40 percent of the time?”While Public Staff supports the new plant, it also asserts in testimony that Duke hasn’t developed a plan for how it will comply with the new federal rule.“We have concerns about the impact and implementation of the recently issued [Clean Air Act] Rule,” engineers Dustin Metz and Evan Lawrence wrote. “We cannot yet identify how [the] proposed Roxboro facility may be impacted and to what extent.” ‘That modeling … was flawed’ The agency also hasn’t seen a comprehensive analysis from Duke to justify the location for the combined cycle unit. “The Public Staff cannot say definitively that the proposed Roxboro… project is least cost for [Duke’s] ratepayers,” Metz and Lawrence said in their testimony.Other critics also question whether the gas plant is Duke’s most economical option, though for different reasons.In testimony for the environmental groups, Stanton asserts that Duke artificially limits renewables in its carbon-reduction models; assumes clean energy is 60 percent costlier than industry standards; and, in the plan that most quickly transitions the company away from fossil fuels, makes all resources 20 percent more expensive. Plus, new generation built before 2030 — which would be mostly solar — gets an 8 percent penalty.“Duke’s rationale for requesting the [Hyco Lake plant… is the] selection of gas resources in its least-cost modeling,” Stanton wrote. “That modeling, however, was flawed, including multiple biases for gas resources and against renewable resources.” Detractors also doubt the company’s plan to convert the gas plant to run on emissions-free hydrogen as late as 2049 – just in time to comply with state law. That “presumption,” said consultant Bill McAleb in testimony on behalf of the Environmental Defense Fund, “is not based on substantive evidence presented in this docket proceeding.”Detailing an array of challenges, including uncertainty from equipment manufacturers, McAleb concludes a zero-carbon, hydrogen-fueled facility, “is not only speculative but unlikely.”
This story was first published by Energy News Network . Duke Energy has been laying the groundwork for a new gas power plant in North Carolina’s Person County for years, touting it as the “ next generation ” of electricity production and lining up support from local politicians eager to hold on to the utility’s…
This story was first published by Energy News Network.
Duke Energy has been laying the groundwork for a new gas power plant in North Carolina’s Person County for years, touting it as the “next generation” of electricity production and lining up support from local politicians eager to hold on to the utility’s tax dollars.
With acknowledgement from regulators and even some clean energy experts that new gas infrastructure may be needed as Duke shutters its coal fleet, the long-planned gas turbines once seemed like an inevitability.
But now, the 1,360 megawatt combined-cycle facility poised to replace the company’s aging coal smokestacks on Hyco Lake has become a major point of contention. And while the odds still favor Duke, community members and advocates alike say they have cause for hope.
First, there’s the reality of new Biden administration rules on fossil fuel power plants. Beginning in 2032, any new large, combined-cycle plant like that proposed in Person County must either cut its carbon emissions drastically or run 40 percent of the time or less.
Because North Carolina’s geology isn’t suited to carbon sequestration and emissions-free hydrogen fuel isn’t yet viable, the company would have to limit the plant’s operations — either making it unavailable at key times or requiring costly startups and shutdowns, said Ridge Graham, the North Carolina program manager for Appalachian Voices.
“Either of these options make this combined cycle plant a bad investment and a much more expensive form of electricity generation than clean or renewable energy sources,” Graham told commissioners at a public hearing in Roxboro last month. “This is especially true for Duke customers as the purchase of gas fuel is passed on and has led to multiple rate increases through riders on electricity bills since 2017.”
Bolstering that concern, Public Staff, the state’s ratepayer advocate, notes that Duke lists a proposed new pipeline to transport gas to the plant as an operating cost that would “presumably” be recovered through the fuel rider.
Even if the actual fuel costs were cut in half, engineers for the agency said, “total transportation charges would mostly be unchanged within the ‘Fuel’ category because of the significant pipeline costs that would be necessary to provide natural gas service to the Roxboro site.”
In addition to these charges, ratepayers would also have to pay the full cost of the plant, amortized over 35 years, plus Duke’s regulator-approved profit margin, energy analyst Elizabeth Stanton said in written testimony on behalf of Sierra Club, Southern Alliance for Clean Energy, and the Natural Resources Defense Council.
What’s more, she noted, ratepayers would cover whatever “replacement resources” were needed to meet demand “after the facility’s expected generation was decreased.”
In contrast, Stanton says, Duke’s estimated costs for ratepayers assume the plant will run at over 40 percent capacity through 2042 — a scenario squarely at odds with the new Biden administration regulation.
“Duke needs to account for the rule in their planning, and they have not done that,” Mikaela Curry, a North Carolina-based campaign manager at the Sierra Club, said in an interview. “Who pays for a gas plant that can only run 40 percent of the time?”
While Public Staff supports the new plant, it also asserts in testimony that Duke hasn’t developed a plan for how it will comply with the new federal rule.
“We have concerns about the impact and implementation of the recently issued [Clean Air Act] Rule,” engineers Dustin Metz and Evan Lawrence wrote. “We cannot yet identify how [the] proposed Roxboro facility may be impacted and to what extent.”
‘That modeling … was flawed’
The agency also hasn’t seen a comprehensive analysis from Duke to justify the location for the combined cycle unit. “The Public Staff cannot say definitively that the proposed Roxboro… project is least cost for [Duke’s] ratepayers,” Metz and Lawrence said in their testimony.
Other critics also question whether the gas plant is Duke’s most economical option, though for different reasons.
In testimony for the environmental groups, Stanton asserts that Duke artificially limits renewables in its carbon-reduction models; assumes clean energy is 60 percent costlier than industry standards; and, in the plan that most quickly transitions the company away from fossil fuels, makes all resources 20 percent more expensive. Plus, new generation built before 2030 — which would be mostly solar — gets an 8 percent penalty.
“Duke’s rationale for requesting the [Hyco Lake plant… is the] selection of gas resources in its least-cost modeling,” Stanton wrote. “That modeling, however, was flawed, including multiple biases for gas resources and against renewable resources.”
Detractors also doubt the company’s plan to convert the gas plant to run on emissions-free hydrogen as late as 2049 – just in time to comply with state law. That “presumption,” said consultant Bill McAleb in testimony on behalf of the Environmental Defense Fund, “is not based on substantive evidence presented in this docket proceeding.”
Detailing an array of challenges, including uncertainty from equipment manufacturers, McAleb concludes a zero-carbon, hydrogen-fueled facility, “is not only speculative but unlikely.”