Duke Energy is not moving forward with wind energy off North Carolina's coast after determining proposals from three developers are more expensive than solar panels and battery storage that result in the same amount of energy.
The N.C. Utilities Commission's carbon and resource plan finalized last fall directed Duke to ask the three companies who have North Carolina offshore wind leases how much building those wind farms would cost. If those proposals were cost-competitive, the Commission ordered, Duke should proceed with a binding request for proposals.
Ultimately, Duke reviewed eight proposals to build as much as 2,400 megawatts of offshore wind by 2035 as part of what it called an acquisition request for information, or ARFI. The company determined that solar and storage were cheaper in every instance, which it reported to the Utilities Commission in an Aug. 11 filing.
"The ARFI process determined that offshore wind is not cost-competitive at this time, so no RFP will be issued — this decision is supported by the independent evaluator that oversaw the proceedings," Bill Norton, a Duke spokesman, wrote in a statement.
Karly Brownfield, a senior program manager with the Southeastern Wind Coalition, said the group is disappointed Duke is not pushing ahead with plans for wind development. The projects can take about a decade, with numerous environmental and regulatory reviews necessary before construction can begin.
"I don't think this means that we've reached the end of the road for wind in North Carolina. I think there's still a lot of work that can be done in terms of trying to help our decision makers and our utility commissioners understand the value of the technology and that it's not just the cost of wind that we need to be looking at," Brownfield said in an interview.
Wind energy has met resistance on the federal level, with the Trump Administration cutting key tax credits and pausing offshore wind developments.
Duke Energy's process
There are three existing wind leases off North Carolina's coast:
- Avangrid's Kitty Hawk South, about 27 miles east of Corolla
- Duke nonregulated subsidiary Cinergy's Carolina Long Bay lease, about 22 miles south of Bald Head Island
- TotalEnergies' Carolina Long Bay lease, also about 22 miles south of Bald Head Island
To determine whether offshore wind is cost-competitive, Duke worked with Power Advisory, LLC, to compare proposals from the three developers.
Duke asked for the cost of building 2,400 megawatts of offshore wind by 2035, which it compared against the cost of building 3,576 megawatts of solar panels and 3,440 of battery storage.
In cooperation with the N.C. Public Staff, which represents ratepayers, Duke developed that comparison and cost, known as a "reference price." Part of the reason solar and storage were chosen as the reference technology is because they, like offshore wind, are carbon-free technologies.
The developers submitted eight different project proposals, with Duke determining none of them were less expensive than the alternative.
Many details about the proposals and the process remain confidential. Those include the reference price itself, as well as information about how much the developers said each project would cost and what they would include.
Duke will be able to use that information, Norton said, to help inform the updated resource plan it will submit to the Utilities Commission by Oct. 1.
Brownfield of the Southeastern Wind Coalition said the group is concerned that comparing offshore wind to solar and storage fails to capture the technology's benefits.
"The cost of wind being compared to solar and storage is one thing, but the efficiency of offshore wind being compared to solar and storage is a completely different thing because there are just fundamentally so many key differences between the technologies," Brownfield said.
Brownfield noted that offshore wind can generate power between 80 and 90% of the time compared to solar's 30 to 40%. Supporters of offshore wind have long argued that it actually generates its most energy on cold winter mornings, the times when North Carolina's customers are consuming the most electricity.
What's next for offshore wind in NC?
The process took place at a precarious moment for offshore wind.
The Trump Administration has halted progress on existing leases, brought an earlier-than-planned end to tax credits that give renewable projects a major financial boost and generally expressed skepticism about the usefulness of the technology. That's a sharp shift from the Biden Administration, which set ambitious goals for offshore wind energy as part of the United States' effort to decarbonize its energy generation.
Still, renewable energy supporters believe there could and should be a place for the technology in North Carolina's future energy mix, particularly considering steep increases in demand for electricity.
Duke's preferred energy portfolio in its 2024 resource plan proposal showed between 0 and 1.6 gigawatts of offshore wind by 2035, but two other modeled pathways showed 2.4 gigawatts and 1.6 gigawatts.
Will Scott, the Environmental Defense Fund's Southeast climate and clean energy director, said the ARFI process leaves open the possibility that Duke could conduct similar evaluations in the future.
"This isn't closing the door, it's just choosing not to walk through it this year," Scott said.
With Duke continuing to project increases demand for power, Scott continued, offshore wind could play a role in the state meeting its still-standing goal of reducing Duke Energy's carbon dioxide emissions to net zero by 2050 while continuing to provide reliable and affordable electricity.
"We really think this technology still has the potential to be an important part of meeting the massive growth in electricity demand that we're seeing in North Carolina," Scott said.
Brownfield, of the Southeastern Wind Coalition, said the group is focused on trying to turn the tide with federal officials even as it continues to build local support in North Carolina.
"It's kind of like a top-down, bottom-up approach. We need to be doing just as much engagement at the federal level as we need to be doing at the local and the state levels. Those things are all equally important right now," Brownfield said.
