Duke updates Carolinas plan with new nuclear, gas, renewables proposals

Duke Energy Corp. updated its resource plan for the Carolinas, proposing more than $90 billion in new infrastructure investments, including new advanced nuclear, hydrogen-capable gas, and renewables coupled with storage.

Duke filed its Carolinas resource plan with South Carolina regulators Aug. 15. It will file an identical plan with North Carolina regulators Aug. 17, spokesperson Bill Norton said.

The updated plan builds on Duke's 2022 proposal, which environmental groups criticized as too reliant on fossil fuels. Proposed portfolio options under that plan aimed to reduce carbon emissions in the 2030s and reach net-zero emissions by 2050 through substantial new investments in solar and battery storage, onshore and offshore wind, small modular nuclear reactors and new natural gas plants, in line with North Carolina state mandates.

The new plan maintains Duke's target to exit coal by 2035 through a "replace before retire" approach to shutting down its fleet. It also incorporates updated modeling on federal incentives in the 2022 Inflation Reduction Act.

Load growth

Duke said it now expects higher load in the Carolinas — about 35,000 GWh in the next 15 years — and higher winter peaks compared to projections in the previous version of its plan. It aims to increase its planning reserve margin from 17% to 22%, primarily because of winter capacity risk, an increase in load forecast error, an increase in unit outages and lower reliance on neighboring utilities.

"We project exponential growth ... so we've charted an ambitious road map for meeting that need while protecting reliability and affordability," Duke Energy State President of North Carolina Kendal Bowman said.

To help meet load growth and replace retiring coal generation, Duke proposed installing advanced nuclear at its Belews Creek coal-fired power plant and hydrogen-capable gas plants at its Roxboro and Marshall coal-fired plants. Belews Creek and Marshall are owned by subsidiary Duke Energy Carolinas LLC. Roxboro is owned by subsidiary Duke Energy Progress LLC.

In North Carolina, Duke's integrated resource plan is also its carbon reduction plan, part of a mandate under 2021 state energy legislation that set targets for a 70% reduction in CO₂ emissions by 2030 from 2005 levels and carbon neutrality by 2050. The law also gave state regulators and the utilities they govern the authority to determine the "least-cost path" to those goals. (Docket E-100, Sub 190)

Duke proposed three new energy portfolios in its latest plan, all more ambitious in pace and scale than those proposed previously, the company said. The three portfolios would reach the required North Carolina interim 70% carbon reduction target by 2030, 2033 and 2035, respectively, with the later dates drawing on timing flexibility provided to North Carolina regulators under the 2021 law. All three portfolios reach carbon neutrality by 2050.

"It's really just a matter of the pace and how we balance that pace of adoption of these resources," Glen Snider, Duke managing director of integrated resource planning and analytics, said in an Aug. 15 interview with S&P Global Commodity Insights. "We want to ensure that we're balancing reliability and affordability with the implementation of our plan."

Portfolio additions

Duke recommended a near-term action plan based on its least-cost, least-risk portfolio option, including 6,000 MW of solar by 2031; 2,700 MW of battery storage by 2031; 5,800 MW of hydrogen-capable gas capacity by 2032, including replacing coal retirements at Roxboro and Marshall; and 1,200 MW of onshore wind by 2033, preserving the option of installing 1,600 MW of offshore wind for 2033 or later.

The plan includes adding 1,700 MW of pumped-storage hydro by 2034 at Bad Creek in South Carolina, which serves both states, and 600 MW of advanced nuclear by 2035, partially replacing coal retirements at Belews Creek and at one other existing plant location to be determined.

A coalition of environmental groups said Duke's plan does not take full advantage of federal incentives for renewables and doubles down on fossil fuel reliance and said the utility should instead use its resources to lead the clean energy transition.

"Instead of shifting their focus ... to a much larger clean energy buildout that would benefit customers and protect our air and water, Duke remains committed to this massive gas buildout," said Mikaela Curry, Sierra Club field manager.

Snider said new gas generation is necessary for Duke, despite additional emissions, because of its dispatchable nature compared to renewables and due to the limitations of battery storage technologies, adding that Duke's plans for solar development "are probably one of the most aggressive" among peer utilities.

"When you actually go through the very detailed math and physics of it, there are times throughout the year when you just will not have sufficient renewables even with battery storage, which tends to be a matter of hours and not days or weeks," Snider said. "The long-duration storage just hasn't developed yet. So this gas generation, while not the largest part of our carbon plan, is a very important part to back the renewables and the batteries."

The filing Aug. 17 in North Carolina will kick off a public regulatory process, with a final order expected by the end of 2024. The identical filing in South Carolina on Aug. 15 began a separate proceeding to consider the integrated resource plan, with an order expected in mid-2024, Duke said. (Dockets 2023-8-E and 2023-10-E).

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