President Trump’s campaign against wind energy in North Carolina advanced this week.
Three months after French-owned TotalEnergies relinquished its lease off the Carolina coast, Duke Energy reached a settlement with the U.S. Department of the Interior to end the utility’s offshore wind lease off the coast of Wilmington.
Duke Energy will receive a partial reimbursement for its $155 million offshore wind lease. The company will get back $129 million. Duke plans to reinvest the money in projects, potentially including new nuclear and gas-fired power plants.
“This settlement allows Duke Energy to refocus $129 million in ways that directly benefit our customers and communities in the Carolinas,” said Kodwo Ghartey-Tagoe, executive vice president and chief executive officer of Duke Energy Carolinas.
Every power source plays a different role when it comes to meeting North Carolina’s energy demand. Coal-fired plants, nuclear reactors and wind farms can all provide a steady stream of energy to meet the state’s baseload, or regular, non-peak requirements.
Last Fall, Duke Energy filed an acquisition request for information, or ARFI, with the Utilities Commission, stating that it would not move forward with an offshore wind farm in the foreseeable future. Wind farm developer Avangrid Renewables described the process as “a fictitious thought experiment that cannot be achieved.” The ARFI compared the cost of wind energy development to the cost of building an equivalent amount of solar energy plus battery storage.
The current carbon plan proposal does not include onshore or offshore wind, instead relying on nuclear power plants to provide carbon-free baseload power.
The ‘winners and losers’ of Trump’s plans to 'Unleash American Energy'
Karly Brownfield, senior program manager with the nonprofit Southeastern Wind Coalition, said the wind lease termination is a step back for offshore wind in North Carolina.
“It’s unfortunate to see the federal government continue to pick winners and losers in the energy space,” Brownfield said.
The Southeastern Wind Coalition said the lease could have supported a wind farm capable of powering roughly 300,000 homes. It also deals an economic blow to the state. The nonprofit estimates that offshore wind development would create 37,000 jobs, $233 million in taxes and an overall $44 billion capital investment in the state.
This is the ninth wind energy project to reach an agreement with the federal government to end since Trump took office last year. The settlement leaves only one pathway for Duke Energy to procure wind energy in the state: Avangrid’s Kitty Hawk Wind South.
“It’s not like offshore wind is off the table in North Carolina. There’s less optionality, which is not ideal, but there’s still opportunity,” Brownfield said.
Duke Energy evades wind energy procurement
The settlement comes just weeks after Mark McIntire, director of government affairs, energy and environment for Duke Energy, denied assertions that Duke Energy Carolinas held a lease, which Duke Energy subsidiary Cinergy Corp owned.
“We are not in a position to expend funds to develop a resource for which we don't have the rights to develop,” McIntire said during June’s Carbon Plan expert witness hearing.
The company also pointed to House Bill 951, which established North Carolina’s Carbon Plan proceedings and the utility's solar procurement targets.
“I would go on to say that that piece of legislation specifically directs the company to own the generation technologies that are utilized to meet customer load,” McIntire said.
The law requires any new “generation facilities” the Utilities Commission selects during the Carbon Plan process to be owned by Duke Energy, so that it can recover the cost of service for those new power plants.
