This blog was written by John D. Wilson, former Deputy Director for Regulatory Policy at the Southern Alliance for Clean Energy with contributions from former SACE staffers Toni Nelson and Amelia Shenstone.Guest Blog | May 26, 2015
It’s always good news for public health when a utility announces a coal-fired power plant retirement, as Duke Energy did for its Asheville plant last week on May 19. Unfortunately, Duke did not fully heed the demands of local activists – including the Sierra Club, MountainTrue, Southern Environmental Law Center and Waterkeeper Alliance – who had advocated for its closure for three years, and who were disappointed that the transition plan would not set the high bar for clean energy they called for. The 414 MW coal plant will be replaced with an even larger 650 MW natural-gas fired plant and a solar facility whose size is yet to be determined.
Building a large gas plant at the Asheville site is a frustrating, though not surprising, direction for Duke. How clean is the Asheville coal retirement, really? The answer will depend on just how serious Duke is about its clean energy investments. If Duke is determined to build a gas plant, here are three steps the company should take to make this a cleaner deal.
1. Bring solar and efficiency to Asheville customers
Duke couched the retirement of the Asheville plant as part of its Western Carolinas Modernization plan. To be truly modern, Duke needs to invest in making energy efficiency and rooftop solar available to everyone. A clean energy plan should not just focus on switching from a carbon-intensive fossil fuel to a less carbon-intensive fossil fuel. It should also include a genuine effort to reduce overall customer demand for electricity generated by burning any fossil fuel, consequently lowering both carbon emissions and the utility costs borne by ratepayers.
For example, Asheville-based Clean Energy for Us (CE4U) is a local campaign aimed at making it easy and affordable for homeowners, businesses, and tax-exempt entities to go solar and invest in energy efficiency by vetting contractors; negotiating discounted solar pricing; and organizing energy audits for qualified participants.
Another great model for reducing customers’ energy consumption – and lowering their electricity bills – is the one pioneered by PosiGen, a company based in New Orleans that is expanding its reach to other parts of the country. PosiGen offers a unique approach of combining energy efficiency and solar energy to achieve greater savings on energy bills, with a focus on middle- and low-income homeowners. According to the company’s founders, doing solar and energy efficiency together saves customers 40-80 percent more than just installing solar, with the typical customer’s utility bill reduced by $1,200 a year. This is a model Duke could pilot in Western North Carolina, where median household income in the region has not only been consistently less than that of the U.S. and other parts of the state, but has also been growing more slowly since 1995.
2. Phase out the G.G. Allen coal-fired plant
In its Asheville plant retirement announcement, Duke stated that retiring the plant relieved the need to operate it “even when it’s not economical… At today’s natural gas prices, the gas plant would be about 35 percent less expensive to operate than the existing coal plant, saving customers money.” Similar economic arguments apply to the 1155 MW Allen plant, located near Charlotte, NC. In fact, in its 2014 IRP, Duke planned to retire the Allen plant three years earlier than the Asheville one. (You can download SACE’s comments on the IRP here.)
If the Asheville plant is retiring primarily for economic reasons, the Allen plant should too. Allen is even older than the Asheville plant; its five generating units came online between 1957 and 1961, while Asheville’s date from 1964 and 1971. It runs even more intermittently than Asheville – about 20% of the time, only when electric demand peaks. A gas plant is more suited to this type of use.
With expanded and more flexible power supply in Asheville, there will be no need for the Allen plant and the air and water hazards that go with it. Coal ash stored on the site is leaking and contaminating the nearby Catawba River. Residential well water testing at homes near Duke’s coal plants has resulted in 191 letters to residents warning not to drink the water; near the Allen plant 57 wells showed high levels of toxic contaminants. Duke faces high costs to clean up its coal ash mess, including upgrading its ash handling if it is to continue to operate. Duke also faces litigation around upgrades it made to several of its plants allegedly without proper review; of these plants, Allen is the only one still operating and emitting air pollution. We discussed these concerns, and recommended expedited retirement of G.G. Allen, in our comments on Duke’s 2014 Integrated Resource Plan.
3. Build in serious utility-scale solar
Another piece of the modernization plan is to build a new substation in South Carolina to ensure smooth transmission in this part of Duke’s territory. Analysis by SACE has found that the best solar in the entire Southeastern U.S. for offsetting the construction of peaking power plants is precisely in the location where Duke plans to build its new substation, just over the border in South Carolina.
Duke should take advantage of this opportunity to integrate at least 100 MW of solar capacity tied into the new substation, avoiding interconnection costs by designing the facility to accommodate the power supply from the beginning. Solar at this scale provides an important hedge against the historical volatility of natural gas prices, because once built there are no fuel costs for solar power plants. While the new gas plant will be cheaper to operate than the current coal-fired plant in terms of its ability to quickly ramp up or down to accommodate customer demand, thereby avoiding the need for continuous operation, any future increases in natural gas prices will be passed on to customers through higher electricity rates.
A cleaner energy future for North Carolina
North Carolina’s air and water will be cleaner thanks to the retirement of the Asheville plant, and we will be one step closer to cutting the carbon pollution needed to reduce the worst impacts of climate change. But when it comes to moving away from coal in the Western Carolinas, Duke has a choice: will clean energy be a nice afterthought, or will the company lead the way to a cleaner future in the Southeast?