In a move mirroring historical ambitions, Duke Energy is gearing up for a significant expansion by planning to construct 12 new gas power plants, primarily in North Carolina. This initiative comes at a time when utility companies in the Southeast are also making substantial capacity additions.
*Duke has not announced a location for CCs 4 and 5, but at the moment, Davidson County is the location indicated by their most recent transmission study.
The utility giant aims to add nearly 10,000 megawatts (10 gigawatts) over five years, a significant leap in capacity. If these plans come to fruition, it would mark the largest capacity addition period in Duke Energy’s history, averaging two gigawatts per year.
From Boom to Bust
Interestingly, Duke Energy’s current plans evoke memories of the nuclear expansion in the late 1970s and early 1980s. During that period, Duke added 11,240 megawatts of nuclear capacity in the Carolinas over 16 years. However, many of the planned nuclear projects were later canceled. In total, 13,525 megawatts worth of nuclear reactors, more than half of the planned projects, were never built. Duke still controls most of these sites, except for the South River location on the North Carolina coast.
During the 1970s and early 1980s, Duke primarily constructed coal and nuclear plants. Although Duke initially planned to build nearly 25,000 megawatts of nuclear generation, the anticipated demand did not materialize. Consequently, 13,525 megawatts of nuclear projects were canceled, primarily due to incorrect load forecasts, escalating costs, and changing public sentiment towards nuclear technology.
Déjà Vu, All Over Again
Once again, Duke is facing similar challenges with its proposed gas plants. With load growth uncertain and costs increasing, questions about the feasibility of these projects arise. If technology trends change or demand forecasts prove inaccurate, customers might be left with stranded assets and higher costs. Additionally, there’s a risk of overestimating demand, which could lead to excessive capacity.
Duke Energy’s profit model incentivizes the construction of large projects, as utilities earn more by building more. However, this approach doesn’t necessarily align with actual demand needs. Southern utilities, including Duke, are seeking regulatory approval for more capacity than required, driven by structural incentives to overestimate demand.
Recently, a new state law allows Duke to pass construction costs to ratepayers before the plants are operational, a significant change from past policies. This shift decreases the risk for Duke but potentially increases the financial burden on consumers. As Duke seeks approval from the NC Utilities Commission for its ambitious plans, the question remains whether history will repeat itself with another cycle of overbuilding and underutilization.
Original Story at cleanenergy.org