A banner year for reliable energy, but some concerns persist
North Carolina energy policy saw big changes in 2025. Many are good for upholding reliability while avoiding unnecessary costs. Others, however, give some cause for concern.
North Carolina is now three years into a Carbon Plan law that seeks to eliminate carbon dioxide (CO2) emissions from electricity generation in the state by 2050. When the year opened, it included an interim goal of 70% reduction in CO2 emissions (from 2005 levels) by 2030. Incidentally, without a Carbon Plan, state emissions had fallen by more than half by 2023.
Developments concerning intermittent, unreliable generation
President Joe Biden had made “aggressive action” for offshore wind his Day-One priority. His signature legislation, the Inflation Reduction Act (IRA), contained open-ended grants and tax credits “on the order of trillions of dollars” for renewable energy sources, while his administration hamstrung natural gas.
President Donald Trump, however, made it a Day-One priority to halt new offshore wind projects and review existing wind projects. His signature legislation, the “One Big Beautiful Bill Act,” limited IRA tax credit eligibility for wind and solar facilities.
Conducted for Duke Energy, an independent evaluation of the state’s three offshore wind energy areas found they all compared unfavorably against a reference price based on solar plus batteries. So, Duke announced that it will not be pursuing offshore wind energy generation here.
In March, a meeting of the state Senate Committee on Agriculture, Energy, and the Environment revealed that the Carbon Plan’s interim goal was having an exaggerated effect on resource modeling by the North Carolina Utility Commission (NCUC). Legislators learned that removing the interim goal would save electricity consumers $13 billion by 2050.
Developments concerning reliable, thermal generation
In July, the General Assembly enacted Senate Bill (SB) 266 over Gov. Josh Stein’s veto, eliminating the Carbon Plan’s interim goal. It also expanded state law allowing utilities to charge ratepayers for construction work in progress while adding key guardrails on its use.
When a summer heat wave threatened to overload the grid, Duke Energy Carolinas obtained an emergency order from the US Department of Energy (DOE) to exceed environmental emissions levels if needed to maintain power provision. With nuclear already at peak production, Duke was able to avoid blackouts primarily by increasing coal generation by 30%, showing its importance to reliability.
In October, Duke filed an updated resource plan proposal with the NCUC as required by the Carbon Plan law. This filing reflected the developments described above. Compared with the previous plan, the new plan would double the planned amount of new natural gas combined-cycle capacity, increase new natural gas combustion-turbine capacity by well over a third, and up new nuclear capacity by about 40%. It would also increase new solar capacity by only about 3%, boost new battery storage by about 58%, and eliminate new wind resources (onshore and off). Finally, Duke would delay retirement of some coal capacity.
The plan represented a significant boost in reliable, thermal generation over the previous plan, a result anticipated by SB 266.
Caution ahead
In July, the DOE published a Resource Adequacy Report warning the nation of high blackout risks by 2030 from closing reliable power plants and replacing them insufficiently (mostly with intermittent renewables). The DOE report estimated the blackout risk in North Carolina to be 27 times worse by 2030 under the planned status quo. Unfortunately, the main changes in Duke’s latest resource plan would take place after 2030, not before.
The sort of problem the DOE report warned of occurred in Spain in April. Days after achieving the “first weekday of 100% renewable power,” the Spanish grid unexpectedly collapsed, causing billions of euros in economic losses. The culprit? Spain’s overreliance on renewables, especially solar generation, leaving very little inertia on the system from the heavy, spinning traditional generators that would allow it to withstand a sudden disturbance.
The Carbon Plan law placed North Carolina on that path. Even though SB 266 forestalls the problem, it still requires “carbon neutrality” by 2050. The new Duke proposal doesn’t add much more new solar than the previous one, but it plans for solar capacity nearly to quadruple. Comparably, it would increase nuclear and natural gas capacity by just 59%. Duke’s filing shows that new solar capacity would be only half as productive as new natural gas capacity and only about a fourth as productive as new nuclear capacity.
Policymakers should amend the Carbon Plan law to make carbon neutrality a goal instead of a mandate. The most important thing for power provision in North Carolina is meeting consumers’ need for reliable and least-cost electricity. Allowing Duke to showcase more natural gas and nuclear capacity in future resource plans would serve North Carolinians’ interests significantly better.
“A banner year for reliable energy, but some concerns persist” was originally published on www.carolinajournal.com.
