An in depth take a look at testimony that identifies factors of bias in Duke Vitality’s North Carolina Carbon Plan Built-in Useful resource Plan (CPIRP)
Shelley Robbins | June 19, 2024
| Coal, Vitality Coverage, Fossil Gasoline, North Carolina, Photo voltaic, Utilities
Each two years, Duke Vitality is required to file a plan with utility regulators that outlines completely different portfolios of latest and current sources that will likely be accessible to fulfill anticipated future power demand whereas additionally trying to fulfill carbon discount targets. This Carbon Plan is developed with pc modeling software program (referred to as EnCompass) that’s extremely delicate to enter assumptions.
After Duke’s proposed Carbon Plan is filed, advocates and events can study and problem Duke’s modeling and assumptions. This put up provides an in depth take a look at testimony that identifies factors of bias in Duke Vitality’s North Carolina Carbon Plan Built-in Useful resource Plan (CPIRP).
Learn the Weblog Sequence on Duke’s 2024 CPIRP
Pc Fashions are Solely as Good – or as Unhealthy – because the Info They’re Fed
SACE and our allies (Sierra Membership and NRDC, represented by SELC, and in partnership with NCSEA) employed Dr. Maria Roumpani, an impartial guide, to look at Duke’s plan and the modeling assumptions. Dr. Roumpani’s intensive evaluation recognized quite a few points that bias Duke’s plan in opposition to the swift alternative of growing older, soiled coal vegetation with renewable power, and as an alternative trigger the plan to favor a serious new fleet of fossil gasoline vegetation.
Duke introduced three “Pathways” that try to fulfill its rising load forecast, with Pathway 1 retiring coal the earliest and total being the cleanest of the three, and Pathway 2 being an intermediate choice. Pathway 3, Duke’s most well-liked portfolio, contains 6,800 MW of latest mixed cycle gasoline vegetation, 2,100 MW of latest combustion generators (typically referred to as “peakers”), the delayed retirement of components of its coal fleet, and a five-year delay in complying with the 2030 North Carolina carbon discount necessities.
Duke’s Biases Result in Skewed Outcomes:
Dr. Roumpani’s findings present that Duke overestimates the reliability of fossil resources, underestimates reliability dangers and regulatory prices of fossil sources, overestimates the prices of fresh power sources, artificially limits the efficiency potential of fresh power sources, and utterly ignores further sources that may be utilized to decarbonize the system whereas reliably assembly the forecasted demand. The result’s a synthetic price benefit for Pathway 3 (which proposes delayed local weather motion) over Pathway 1 (which would come with swift coal plant retirements). Dr. Roumpani discovered that Duke’s synthetic modeling limitations make this consequence “nearly pre-determined.”
Photo voltaic Construct Limits: Inside its pc mannequin, Duke set annual construct limits on how a lot photo voltaic, wind, and batteries might be added to the grid every year, with probably the most restrictive limits within the close to time period. Duke cites interconnection limitations as a purpose to restrict photo voltaic, however Dr. Roumpani notes that they don’t embody methods to remove these limitations, akin to demand facet sources, load administration choices, transmission enhancements, and consideration of different load forecasts. (pp. 12-13)
Clear Portfolio Premiums: Duke positioned a 20 % “price threat premium” on all capital prices in Pathway 1 – the cleanest of the three portfolios. As Dr. Roupmani states, “(T)he Firms take an additional step to undermine the one portfolio that features larger ranges of renewable sources…. This method shouldn’t be cheap, particularly as a result of the Firm has chosen to not quantify different dangers…. The only real objective of this adder appears to be to undermine P1 when evaluating the prices with P2 and P3.” (pp. 78-79) Duke additionally contains an 8 % price adder, declining till 2030, on all provide facet sources in all portfolios to replicate price uncertainties. This adder disappears in 2030, so it solely minimally impacts new gasoline models, however it penalizes sooner deployment of fresh sources like photo voltaic and battery storage.
Reliability Penalty on Renewables: Duke makes use of a reliability metric referred to as Efficient Load Carrying Functionality (ELCC) that sharply reductions the worth of photo voltaic, wind, and batteries. ELCC is a measure of a useful resource’s potential to ship power to the grid when there could also be power provide shortfalls. Duke doesn’t apply this similar measure to coal and gasoline vegetation in its EnCompass modeling. Dr. Roumpani notes this leads to an uneven enjoying subject. (P. 67) As a substitute, Duke fashions coal and gasoline as if they’re nearly utterly dependable, when in reality they expertise outages and are notably susceptible to failure throughout excessive climate. As a result of Duke’s mannequin assumes that the coal fleet is dependable, when coal retires it overestimates the quantity of photo voltaic, wind, and batteries that may be wanted to take the place of coal.
The unreliability of the coal and fossil gasoline fleet was included one explicit calculation referred to as the reserve margin, however it was not mirrored within the the rest of its modeling. The reserve margin is a proportion of additional era above peak forecasted demand that may be accessible if energy vegetation or transmission traces are down. If a utility has an environment friendly and well-maintained fleet, it ought to have a decrease reserve margin, which then lowers the associated fee to ratepayers. On this occasion, nevertheless, Duke has integrated the fleet failures from Winter Storm Elliott into its reserve margin calculation, and Dr. Roumpani famous that this ingredient alone inflated the reserve margin by 2.5 % (p. 37). So the reliability threat was integrated the place it supported a better reserve margin, however it was not integrated within the modeling the place it could decrease the quantity of fossil fuels within the plan. To place some numbers on the influence: Duke has projected a mixed revised peak load of over 3,700 MW, so a reserve margin that’s 2.5 % larger would result in one further 900 MW gasoline plant within the plan.
Battery Storage: Duke limits the position of battery power storage by imposing annual construct limits in its modeling, overstating prices, ignoring the grid advantages supplied, assuming a 20 % price threat premium (talked about above) to capital prices within the cleaner Pathway 1, and utterly omitting long-duration power storage.
Duke additionally added “integration prices” for photo voltaic and photo voltaic plus storage however didn’t embody the pliability financial savings that pairing photo voltaic with storage supplies, thus overstating the price of these sources. (p. 82) Vitality storage that’s built-in with photo voltaic saves the gasoline or oil gasoline prices that may be incurred by ramping a peaker up and right down to handle the variability of the photo voltaic.
As well as, Duke has chosen to depend on capital-intensive rising applied sciences, akin to Small Modular Reactors (SMRs) and hydrogen, whereas ignoring the speedy growth and adoption of extra nimble sources akin to long-duration power storage (LDES) applied sciences. SMRs and gasoline/hydrogen generators perpetuate a inflexible provide system that can’t adapt to a quickly altering expertise and coverage panorama. (Learn extra concerning the issues with this inflexible plan right here.) This locks ratepayers in to each infrastructure prices and gasoline provide dangers. Duke included hydrogen in its mannequin, however not LDES.
And when Duke vetted the modeling outcomes for reliability, solely gasoline sources have been allowed to fill any gaps. Battery storage was not thought of, nor have been the extra grid advantages that storage supplies. (P. 70)
Coal: In Pathway 1, coal retirements are condensed to earlier years the place they coincide with strict clear useful resource construct limits, forcing the mannequin to pick out new gasoline models as a result of 1) the capability of retiring coal exceeds Duke’s annual construct restrict for clear sources and a pair of) further choices akin to long-duration power storage and demand-side sources aren’t a selectable choice within the mannequin. In modeling of all Pathways, Duke didn’t enable any coal retirements earlier than 2029, the interval with the strictest limits on clear sources. Roumpani famous “Even when one coal unit might economically retire in 2028 and get replaced by photo voltaic plus storage, this retirement wouldn’t be mirrored within the outcomes given the Firms’ modeling constraints.” (p. 21)
Sure coal retirements have been artificially delayed within the mannequin with a view to wait particularly for brand new proposed gasoline capability to come back on-line relatively than opening that alternative capability as much as all sources. As well as, Duke artificially delayed the retirement of the Belews Creek coal plant till 2036 as a result of the positioning is “effectively suited” for Superior Nuclear, an unproven, dangerous, and sure costly choice. Ratepayers might pay for probably the most polluting, least dependable useful resource (coal) whereas ready indefinitely for an costly, never-proven alternative (Superior Nuclear) as an alternative of changing shortly to well-known photo voltaic, wind, storage, and demand-side sources.
Duke’s coal fleet has grown more and more unreliable because it ages, however this isn’t captured totally within the modeling. Along with rising upkeep points, the coal fleet has weather-related reliability points. Coal piles and mechanical components freeze throughout excessive low temperatures. As this evaluation of Winter Storm Elliott reveals, nearly all of the ability plant failures on the Duke system throughout that main reliability occasion occurred inside its growing older coal fleet:
Along with these technical biases, Roumpani identifies dangers associated to coal which can be inherently not captured within the modeling, together with dangers brought on by a declining workforce, a provide chain that doesn’t reply shortly to demand volatility, an elevated have to depend on larger sulfur coal with associated larger environmental compliance prices, diminished economies of scale, and rising mining prices and rail transportation disruptions. (pp. 28-29)
Lastly, Dr. Roumpani factors out that the brand new EPA carbon air pollution requirements weren’t integrated into the modeling, rendering its coal retirement schedule noncompliant. As an example, Duke’s plan would retain two coal-fired models at Roxboro previous the 2032 deadline that may require an enormous and unaccounted-for monetary funding in carbon seize and storage with a view to proceed working. (pp 26-27)
Gasoline: Dr. Roumpani notes that the choice of new gasoline capability within the mannequin “stems from a synthetic lack of options at a time of excessive load development” (emphasis added, p. 47). The annual construct limits for photo voltaic and battery storage, talked about above, handicap clear sources within the modeling and end in an overbuild of fossil sources. Dr. Roumpani notes that Duke’s modeling persistently hit predetermined construct limits set by Duke for clear sources, suggesting that eradicating or easing these limits would result in the choice of further clear sources as an alternative of gasoline.
She additionally reveals that the web price to improve new and current fossil vegetation to fulfill the necessities of the brand new EPA carbon air pollution requirements shouldn’t be mirrored within the three portfolios. In an earlier submitting, Duke did develop two complement portfolios that modeled 1) working fossil gasoline models under the extent that may invoke EPA compliance prices and a pair of) working fossil gasoline models on hydrogen. The price of these portfolios elevated Duke’s current worth income requirement by $3.6 billion and $10.5 billion, respectively. These price impacts weren’t included, nevertheless, in Duke’s most up-to-date submitting. (p. 52)
“By investing in new gasoline vegetation, the Firms lock prospects right into a dangerous pathway with no clear avenue to adjust to the then proposed and now closing regulation. The shortage of a viable compliance choice reveals how dangerous the introduced Pathways are. Investing in such excessive volumes of latest gasoline era can’t be thought of a least-cost, least-risk portfolio, particularly when in comparison with a extra balanced method with further no-regrets investments in renewable power, power storage, demand response, and power effectivity, applied sciences that aren’t topic to coverage dangers, and have exhibited dependable and constant price declines.” Roumpani direct testimony at web page 53
The gasoline provide threat of gasoline can be missed. An electrical energy system fueled by fossil gasoline depends upon the gasoline provide system. However whereas reliability of the electrical energy provide system is overseen by the Federal Vitality Regulatory Fee (FERC) and North American Electrical Reliability Company (NERC), there isn’t any such equal company overseeing the reliability of the fossil gasoline provide system. Along with points on the plant itself, gasoline energy vegetation can show unreliable if they don’t have gasoline as a result of provide or pipeline methods are impacted by excessive climate.
No Biases, No Regrets
Dr. Roumpani’s advice to Duke and to the NCUC is evident: “(T)he Firms ought to put money into a no-regrets, versatile portfolio, together with demand facet sources and transmission enhancements, whereas primarily consisting of modular, scalable, and shortly deployable clear power sources that mitigate ratepayers’ publicity to gasoline worth volatility, and the shortly altering market and coverage atmosphere.” (p. 16)
