Duke Energy sees a need for incremental gas-fired power to meet demand growth: CEO

An all-the-above approach to US energy resources that includes traditional nuclear power and small modular reactors will be critical to achieving an effective energy transition but, in the near term, it appears there is a role for natural gas to play in helping meet growing power demand while continuing to decarbonize, Lynn Good, the CEO of Duke Energy, said April 16.

After more than a decade of mostly flat US power demand growth, US utilities have recently increased their electricity consumption growth forecasts because of an uptick in domestic manufacturing, data center demand and other drivers, Good said during the 2024 Columbia Global Energy Summit in New York City.

"I would say over the past 18 months the expansion of demand has extended far beyond electrification ... and we are seeing demand at a pace that we have probably not seen since the 1980s or 1990s," she said.

Good said that in the near term, Duke is expecting power demand to climb by 1.5% to 2% annually and may move beyond that. Over the next 15 years, Duke Energy forecasts power demand to grow at an average annual rate of 2.5%, with about 40% of that expected to come from greater adoption of electric vehicles, according to a Duke Energy blog post from March.

Many of these manufacturers and data centers supporting AI are 24/7 energy users, Good said.

Asked about the costs associated with this power demand growth, Good said utility executives and other stakeholders are "trying to get their heads around it ... but there is no question in the Southeast we need to build generation."

Duke's capital expenditure plan for the next five years is $73 billion with half of that directed to the power grid for resilience, new power generation including renewables, EV infrastructure expansion and cybersecurity, she said.

When asked about permitting, Good replied, "Oh my, permitting is a challenging part of infrastructure development and it can take longer to get the permits than to build the infrastructure." The investor-owned utility is a supporter of commonsense ways to streamline infrastructure development at the federal level and address litigation risk in a way that allows time for expedited but thorough project review, she added.

The goal would not be to shortcut engagement with stakeholders but to do all of it faster, Good said.

All-the-above strategy holds

When discussing how utilities can meet growing power demand growth while remaining focused on decarbonization, Duke's CEO said the company has set targets for net-zero emissions by 2050 along with phasing out coal-fired power by 2035 while also building renewables and energy storage.

Duke is also the largest operator of regulated nuclear power plants in the US, with the utility looking to extend the licenses for those plants as well as pursuing small modular reactor technology. The utility is also starting to look at offshore wind power off the coast of the Carolinas, but given the challenges the industry has faced on the East Coast, the company is being "thoughtful and deliberate" about that, Good said.

"So, it is an all-the-above strategy, and that path is being challenged by all the growth" and simultaneous need to maintain an emissions reduction trajectory, she said.

Asked about the role of natural gas in the US going forward, Good said "natural gas can be a difficult topic in the context of what it means for net-zero goals and what it means for decarbonization."

The dispatchable, run-all-the-time nature of natural gas has been a benefit to decarbonization, she said, adding that finding a way to meet near-term power demand growth leaves a role for gas-fired power to play.

Battery manufacturing, chip manufacturing, demand for powering AI and eliminating coal-fired power appears to support a need for gas, she said.

"We need the fuel to get from here to the future, to the SMR, commercially available hydrogen and commercially available carbon capture," Good said.

Duke has proposed two gas-fired power plants in North Carolina, each at 1,360 MW. The company's proposed additions total nearly 9 GW of new gas before 2035, nearly tripling the gas generation proposed in its first carbon plan regulators approved in 2022.