Utility and Transmission Toolbox
North Carolina has a regulated utility market where utilities make profits by earning a regulated return on capital investments. In July 2012, Duke Energy and Progress Energy merged – making Duke Energy the largest utility in the country. North Carolina’s two investor owned utilities are now Duke Energy and Dominion NC Power, which has service territory in the northeastern part of the state. There are also 26 electric membership corporations and over 70 municipally owned electric systems, which are known as NC Public Power.
North Carolina’s electricity mix comes from mostly coal (51% in 2011) that is imported from West Virginia and Kentucky. North Carolina passed a Renewable Energy and Energy Efficiency Portfolio Standard in 2007 that requires investor owned utilities to get 12.5% of their electricity from renewables in 2021 (5% of this can be met through efficiency). In February 2013, a report commissioned by the North Carolina Sustainable Energy Association, titled The Economic, Utility Portfolio, and Rate Impact of Clean Energy Development in North Carolina, was released. The report found that the state’s clean energy programs and policies generated $1.4 billion in investments since 2007 and that the state’s electricity costs will be lower than if these policies were never implemented. Currently North Carolina has no utility scale wind projects, but renewables (including hydroelectric and biomass) accounted for 5.3% of the state’s electricity generation.
In 2012, wind energy accounted for 3.4% of the US electricity mix and was the number one source of new electricity generation (42%) according to the Energy Information Administration. Many states are reaching high levels of wind energy integration – with 9 states generating more than 10% of their electricity from wind in 2012. The top two states are Iowa, with 24.5% wind, and South Dakota, with 23.9% of its electricity from wind energy in 2012. Wind generation records have also been set recently – in January 2013, Xcel reached over 1,900 megawatts of wind on their system for an hour (over 51% of all electricity on their grid at the time). In December 2012, the Texas grid operator (ERCOT) set a record of 8,638 megawatts of wind generation – accounting for 26% of the electricity on its grid. Earlier in 2012, ERCOT’s wind generation also helped keep the lights on for some customers when a number of conventional power plants went offline suddenly.
North Carolina Transmission Planning Collaborative
In 2005, the North Carolina Transmission Planning Collaborative (NCTPC) was created by North Carolina utilities – Duke Energy, ElectriCities of NC, NC Electric Membership Corporation and Progress Energy Carolinas as a forum to aid in transmission planning. A Transmission Advisory Group (TAG) was formed to allow any interested stakeholders to provide input to the NCTPC. Each year the TAG provides guidance on what scenarios will be considered in the NCTPC yearly study.
- 2012 study found that $1-$2 billion in transmission system upgrades would be necessary to add 3,000MW – 10,000MW of offshore wind to the grid in North Carolina and Virginia.
NC Clean Energy Technology Center Forums
In December 2011, the North Carolina Clean Energy Technology Center organized forums in Jacksonville (Onslow County) and Calabash (Brunswick County). Local government officials, Legislators and the public from these areas were invited to attend the meetings, which had a utility and transmission focus. The speakers and their presentation topics are listed below and presentations can be found here.
- Brian O’Hara, NC Offshore Wind Coalition, and Jen Banks, NCSC – offshore wind 101 and why NC is suited for offshore wind
- Larry Shirley and Bob Leker, NC Department of Commerce – BOEM NC state task force and other state efforts for offshore wind
- Tate Johnson, Governor’s Office – Presented a letter from the Governor about recent offshore wind efforts
- Mark Byrd, Progress Energy – NC Transmission Planning Collaborative studies
- Christopher Fallon, Duke Energy – Duke’s DOE funded transmission and interconnection study
Utility and Transmission News
- In June 2012, Duke Energy and Progress Energy’s merger was approved by the North Carolina Utilities Commission. Following the immediate CEO change from Progress’s Bill Johnson to Duke’s Jim Rogers, the Utilities Commission began an investigation of Duke Energy. In December 2012, the Utilities Commission closed the investigation and approved a settlement that includes requirements for CEO Jim Rogers to retire at the end of 2013 and for an additional $25 million in savings to be passed on to customers.
- In March 2012, the North Carolina Utilities Commission approved Invenergy’s Application for a Certificate of Public Convenience and Necessity.
- Duke Energy Carolinas announced a request for proposals on September 22, 2011, for energy and associated Renewable Energy Credits (RECs) generated from wind projects. The energy was required to be from projects between 50 and 300 megawatts in size and it must be delivered to the Duke Energy Carolinas transmission grid. Proposals were accepted for the RECS only, but the associated wind development must be in North Carolina. Proposals were due October 2011 and the projects must be placed in service by December 2014. The NC Renewable Energy and Energy Efficiency Portfolio Standard, passed in 2007, is the catalyst for this RFP.
- On September 8, 2011, the Department of Energy announced funding awards of $43 million to spur offshore wind development in the US. Forty-one projects were funded, many of which will provide relevant data for North Carolina - including several of particular interest.
- Dominion received $500,000 to analyze performance and cost-of-energy estimates of a hypothetical 600 megawatt offshore wind project for a variety of sites on the U.S. Atlantic coastline in water depths up to 60 meters.
- Duke Energy received $530,000 to examine the effects of offshore wind development on the Duke Energy Carolinas system by determining the cost of upgrading the transmission system, and assessing system impacts and changes in the generation dispatch needed for integration.
- September 2, 2011: Pantego Wind Energy LLC filed an Application for a Certificate of Public Convenience and Necessity with the North Carolina Utilities Commission for a wind energy facility in Beaufort County. Pantego Wind’s parent company is Invenergy Wind North America LLC. The 80 MW facility will be located on approximately 11,000 acres of private land near Terra Ceia and Pantego, with construction planned for 2012. The project, as currently proposed, will have forty-nine 1.6 megawatt turbines - though the turbine selection has not been finalized.
- On June 30, 2011, Progress Energy issued a request for proposals for wind energy facilities of 5 MW or greater to be counted toward the utilities’ requirements under the NC Renewable Energy and Energy Efficiency Portfolio standard. Wind projects do not have to be located in North Carolina to be considered, though that is preferred, but they must deliver the power to the Progress grid. Proposals were due July 25, 2011, with planned short list notification in August 2011 and power purchase agreement execution in October 2011.
- In May 2011, the North Carolina Utilities Commission approved Iberdrola Renewables Application for a Certificate of Public Convenience and Necessity for the Desert Wind project. The 300 MW project, which would be located in Pasquotank and Perquimans Counties, is expected to provide enough electricity to power 55,000 to 70,000 homes. Since the project will be sited on 20,000 acres of private land, the lease payments to local landowners could be up to $1 million per year for the next 20 – 25 years. In addition to these lease payments, the landowners will be able to continue to farm the land around the turbines. The construction of the project is anticipated to begin in late 2011 or early 2012 and would create over 400 jobs for the local community.