Another in a chorus of states aiming to reduce greenhouse gas (GHG) emissions, North Carolina has published a draft Clean Energy Plan, a list of recommendations that, if enacted, would have major implications for natural gas use.
As part of an executive order issued last year by Gov. Roy Cooper seeking to “address climate change and transition to a clean energy economy,” the Department of Environmental Quality (DEQ) was tasked with drafting the report to “outline policy and action recommendations” to achieve the state’s goals. The draft plan was opened for public comment late last week.
Like other state plans for reducing GHG emissions, the DEQ report lays out a policy path that would promote adopting renewable energy and energy efficiency while curbing the use of natural gas.
The DEQ recommends that the North Carolina Utilities Commission establish a method for pricing carbon dioxide (CO2) emissions in its integrated resource planning process for the state’s major electric utilities, Duke Energy Carolinas, Duke Energy Progress and Dominion.
State regulators should “require the use of carbon pricing in any selected resource or action plan starting in 2021,” something that is “occasionally being done voluntarily,” DEQ said. Regulators should also “include any costs associated with building a natural gas pipeline that will be passed on to North Carolina electricity rate payers by the electric utilities.”
Duke and Dominion are lead developers in the Atlantic Coast Pipeline, which would run from West Virginia through Virginia and into North Carolina. The 1.5 Bcf/d, 600-mile greenfield project has faced pushback from some North Carolina legislators.
The DEQ found that the largest GHG emissions reductions from the electricity sector would come from “accelerating coal retirements and a carbon mass cap due to their direct impact on fossil fuel use.” The report recommends that the legislature set deadlines for retiring “uneconomical” coal and peaking power plants while also requiring “a more thorough needs analysis, least cost analysis and justification for new fossil fuel power plants that considers carbon impacts prior to gaining approval to avoid stranded fossil fuel assets in the future.”
Policy makers should seek to understand “the carbon implications of investments in other fossil fuel infrastructure, such as natural gas pipelines that supply fuel to power plants, how remaining fossil fuel power plants are likely to be operated, and whether the full potential of renewable energy will be fully utilized, among other things,” the DEQ said.
Looking ahead, policy makers should also pursue ways to use technologies that include distributed energy, energy storage, microgrids and an intelligent grid to reduce carbon dioxide emissions, according to the agency.
The report also found that, in addition to emissions reductions from the power and transportation sectors, “an economy-wide strategy to meet the state’s GHG reduction goals would require emission reductions from other sectors…such as fuel use in buildings, homes and agriculture. Many studies have identified electrification of those energy end uses as potentially the most technologically feasible and least-cost strategy to reduce emissions from those sectors.”
Electrification could benefit low-income households, the DEQ claimed.
“For those living with incomes below 50% of the federal poverty level, 33% of their annual income is spent on energy bills,” the report said. “Of this amount, about 20% is spent on electric bills while over 60% is spent on natural gas or bottled gas.”
According to the DEQ, 33% of North Carolina’s summer electric generating capacity in 2017 came from natural gas, followed by 32% from coal and 16% from nuclear. Solar made up 10% of capacity, while wind accounted for 1%.
The latest filings from the state’s investor owned utilities indicate solar capacity will roughly double by 2025, growing by 4 GW, then remain flat from 2025-2030, DEQ said.
“The capacity of energy storage is planned to increase from the current level of 1 MW to 246 MW by 2025 and 291 MW by 2030,” according to the agency. Utility plans “suggest that an additional 7,200 MW of natural gas capacity will be part of North Carolina’s portfolio…and 4,000 MW of coal capacity will be retired.”
The public comment period on the draft runs through Sept. 9, with the final plan scheduled for release on Oct. 1. Stakeholders can submit comments online.
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