The NC Energy Policy Council voted to approve its draft 2024 Biennial Report last week, in which it makes official recommendations to the state’s elected leaders, policymakers, and regulators. The report is currently open to public comment until Nov. 11, after which the Council will consider changes and vote for official approval and submission the executive and legislative branches.
Created in 1975 to “advise and make recommendations on increasing domestic energy exploration, development, and production within the State and region to promote economic growth and job creation to the Governor and the General Assembly,” the Council consists of 13 members made-up of designees from the NC Department of Environmental Quality, NC Department of Commerce, and the Office of Lieutenant Governor, as well as 10 public member stakeholders appointed by the governor, NC House Speaker, and Senate President Pro Tempore.
More than three dozen recommendations were included in the 2024 report, such as initiatives to smarten and protect the grid, raising energy efficiency targets for state government buildings, improve utility customer billing, and encouraging the further development of renewables like offshore wind to help meet emissions reduction targets within the state’s Carbon Plan.
Of the recommendations included in Biennial report, the push for more offshore wind energy projects proved the most controversial. That recommendation, emanating from the Council’s Energy Innovation subcommittee, was subjected to extensive revisions to soften the language of the offshore wind push in what one council member described as a “dodged bullet.”
During a virtual Council meeting last week, the originally recommended language on offshore wind, encouraging even larger commitments to the intermittent energy source by Duke Energy, was subjected to comment from Council members, stakeholders, and the public.
“To support the deployment of offshore win as an innovative energy resource and to support and secure a reliable and resilient energy future in North Carolina, the Council affirms Duke Energy’s proposal to deploy 2.4 GW of offshore wind by 2035, submitted to the Commission in the 2024 Carbon Plan proceeding,” read a portion of the initial draft recommendation in offshore wind. “Further, to take full advantage of economic investment and job creation opportunities that will accompany the development of the nascent offshore wind industry in North Carolina, the Council encourages increasing commitments or offshore win deployment of the 2.4 GW if the Commission finds such actions reasonable, prudent, and cost=effective for ratepayers.”
The recommendation is based on satisfying North Carolina’s adopted Carbon Plan, adding “green” energy generation sources in order to meet emissions reduction targets and net zero mandates amid bulging demand growth.
The pushback against the aggressive calls for increased offshore wind came forcefully from a member appointed by the General Assembly, Chris Millis, director of regulatory affairs for the NC Homebuilders Association and a civil engineer by trade.
“With current technology and the lack of affordable dispatchable battery storage to use this free fuel that Mother Earth provides by way of wind — it’s not even remotely cost-effective, nor is it remotely reliable,” Millis asserted in reaction to key terms used in the draft recommendation. “And if we put pressure on these bodies that use the force of increasing people’s power bills. in order to underwrite the interests that are represented here today, the ratepayers are getting tremendously harmed by advancing this policy.”
Millis characterized the drive for more offshore wind projects as a “transfer of wealth” at the expense of ratepayers, noting that any suggested increase in capacity for offshore wind (Duke Energy’s plans include 2.4 gW of offshore wind generation) requires the development of redundant capacities from baseload generation sources, adding to costs ultimately paid for by ratepayers.
“I’m not trying to make these comments to be offensive, but I just ask for everyone to be open-minded to the fact that these statements [in the draft recommendation] are not accurate, and that to put pressure on these entities by underwriting economics of this by the ratepayers is really harmful, and I would just ask for this to be amended or be removed,” Millis said during last week’s meeting “So, I hate to speak too much on this, but I’m pretty passionate on behalf of the ratepayers and I think this is extremely bad policy.”
The Council was responsive to Millis’ critiques. Most notably, the Council, led by Department of Commerce designeee John Hardin, had already prepared substitute language to significantly softened the verbiage used in the offshore wind recommendation.
After debating the new language, the Council voted to approve the revised recommendation 9-1.
“To support the deployment of offshore wind as an innovative energy resource and to support and secure a reliable and resilient energy future in North Carolina, the Council encourages state policymakers to consider offshore wind in addition to other long-lead generation resources,” then read the comparable portion of the substituted draft, ultimately submitted with the Biennial Report.
Millis told Carolina Journal after the vote that the accepted changes to the offshore wind proposal represented “a major win (or dodged bullet) for ratepayers last Friday.”
Long lead generation
Offshore wind is characterized by the NC Utilities Commission as a “long lead generation” energy resource, the same category in which it classifies small modular nuclear reactors (SMR). While energy generation methods don’t really matchup between windmills and advanced nuclear fission, the long timetables required for development put them both in the same category.
Some experts, however, worry an emphasis on renewables like offshore wind comes at the expense of more reliable energy sources.
“The council’s use of ‘reliable and resilient’ with respect to offshore wind is entirely off-base,” Jon Sanders, director of the Center for Food, Power, and Life at the John Locke Foundation, told Carolina Journal. “There is nothing about an intermittent resource like offshore wind to base any expectation of reliability or resiliency — wind is fickle and unreliable. Offshore wind facilities are extremely expensive to build and compromise coastal fishing and tourism, to say nothing of their impacts on endangered marine wildlife. Also, no one has built offshore wind in an area as uniquely hurricane-prone as off the North Carolina coast. If North Carolina is expecting much greater energy demand in the coming years, then the answer is to look to build truly reliable and resilient resources, like small modular nuclear reactors, rather than ones that aren’t.”
To that end, the 2024 Report also makes recommendations concerning advancing North Carolina’s nuclear capacity, specifically via Small Modular Reactors (SMRs), and to create a Nuclear Energy Authority for centralizing power in the space.
“Establish the North Carolina Nuclear Energy Authority and Nuclear Education and Workforce Grant program,” reads the recommendation. “The proposed North Carolina Nuclear Energy Authority would serve as the central body for all nuclear-related projects and programs in the state. It would coordinate efforts across various sectors, drive technological advancements, and ensure that educational and financial resources are effectively allocated to support North Carolina’s nuclear energy ambitions.”
The new Nuclear Authority, the Council suggests, would play a central role in advancing nuclear energy generation within the state by developing and recommending comprehensive nuclear energy policies, and working closely with both the private sector and government bodies to facilitate the development and deployment of advanced nuclear technologies, including Small Modular Reactors (SMRs).
Current timelines from Duke Energy and the NC Utilities Commission put any advanced nuclear development projects out at least 10 years, reinforcing its “long lead generation” categorization.
Meanwhile tech companies hungry for 24/7 power to feed their Artificial Intelligence data centers have launched into advanced nuclear options. Recently, Microsoft signed deals to power some of its data centers via. revamping of reactors at 3 Mile Island in Pennsylvania. Google and Amazon both announced in recent days plans to pursue near term nuclear energy sources through SMRs. The global project pipeline has grown from about 13 GW to about 22 GW, according to Wood Mackenzie. The announcements made by Google and Amazon last week could add 1.8 GW more to that total; and, Amazon’s 2039 goal for SMR deployment would add roughly 3.7 GW more than that.
The NC Energy Policy Council is accepting public comment on its 2024 Draft Biennial Report from now until Nov. 11. Those interested can submit comments to [email protected]. The Council will consider public comments, discuss, and vote on the final recommendations at the Nov. 20, the last meeting of the year, before submitting the report to the relevant parties.