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What exactly is in North Carolina's Carbon Plan?

David Jones

North Carolina’s Utility Commission has officially released its Carbon Plan — nearly two years in the making. The plan is the result of a 2021 law that pushes it to reach a 70% reduction in greenhouse gas emissions by 2030. But critics aren’t sure it will make that deadline.

The bill was historic and bipartisan, but still, some wish it had gone farther.

The North Carolina Carbon Plan is the result of House Bill 951 — it passed through the legislature with overwhelming bipartisan support and Governor Roy Cooper signed it into law in October of 2021.

At the time, Gov. Cooper called it, “an historic bill that gives us an extraordinary new tool in our fight against climate change. Today, North Carolina moves strongly into a reliable and affordable clean energy future.”

The law required the Utilities Commission to "take all reasonable steps to achieve a seventy percent reduction in emissions of carbon dioxide” from electricity generation. That’s a 70% reduction from 2005 levels by 2030.

Taylor Jones, senior regulatory counsel for the North Carolina Sustainable Energy Association, said the bill transformed the state into a regional leader.

"You can't discount the importance and sort of the historical significance of North Carolina passing this law that says our largest utility, the majority of our power sector is going to be carbon neutral by 2050," Jones said.

There’s essentially an energy monopoly in North Carolina, so Duke Energy created four energy portfolio plans for the Utilities Commission to review. Environmental groups like NCSEA had some concerns about them, though — namely that three of the plans missed the law’s goal.

"There were four paths that got us through 2030, and all the way to 2050," Jones said. "While portfolio one hit the 2030, 70% carbon emissions reduction deadline, the other portfolios did not."

The Utilities Commission voted a plan in at the end of 2022, which leaves all those portfolios open – one which meets the 2030 goal, and three others that would meet that target by 2034. It’s possible for the Utilities commission to push the 2030 deadline, and there’s some question for when that is allowed to happen. The plan is currently set for flexibility, and will be reviewed every two years.

So what exactly is in the portfolios? Bill Norton, a spokesman for Duke, said they vary.

“All of them meet the laws requirements, but each has trade offs in near term and long term cost and execution considerations," he said. "Meeting the carbon reduction goal by 2030 is naturally more expensive than doing so by 2032 or 2034. Even though all the portfolio's ultimately reach carbon neutrality by 2050.”

More aggressive portfolios retire coal more quickly, with the 2030 portfolio putting heavy emphasis on solar — but that’s more expensive for consumers. The faster the plan moves towards the 70% goal, the more likely that portfolio will impact customer costs.

So far, Duke Energy hasn’t committed to any of the portfolios, Norton said.

"They gave us a green light on a series of near term actions like that key to keep all the portfolio's alive, if you will," he said.

Those decisions may come when the plan is reviewed in two years. Still, environmental advocates like Taylor Jones have some concerns, especially in the construction of new natural gas plants. "Any gas plant that gets built, you should really only be thinking about that resource having a 20-year operable life," she explained. "It won't be built or go online for a few years. And if it's running longer than 20 years, we're past 2050.”

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Norton says the grid will need new natural gas plants to have a stabilized energy source in the short term. But in the long term, those gas plants will switch fuel sources to hydrogen. That would make the plants "operate on carbon-free fuel by 2050," he said. He added that the technology does already exist to use hydrogen in those plants, but it hasn't been federally approved yet.
"The technology will approve between now and the 2040s," he said. "There are hydrogen blend plants operating now. What's not there yet is the supply."

But NCSEA isn’t excited about staking a carbon-free future on untested technologies. There aren’t currently clear pathways to make hydrogen into a consistent renewable resource, particularly since most hydrogen in current use is coming from natural gas itself.

"We don't know that that will be technically feasible," Jones said. "We don't know that there will be a market that could support that level of bringing hydrogen to be consumed in the state. And we certainly don't know that that wouldbe least cost.”

But despite these foibles, NCSEA and many other green energy advocates are thrilled with the potential of the carbon plan — especially if the utilities commission commits Duke to the 2030 goal, no matter what.

Kelly Kenoyer is an Oregonian transplant on the East Coast. She attended University of Oregon’s School of Journalism as an undergraduate, and later received a Master’s in Journalism from University of Missouri- Columbia. Contact her on Twitter @Kelly_Kenoyer or by email: KKenoyer@whqr.org.