Duke Energy Not so Keen on Offshore Wind?

Duke Energy, a North Carolina-headquartered electric power holding company, does not see offshore wind as having big enough potential until the end of the next decade, according to information from the company’s recent earnings call.

Responding to a question asked by a Goldman Sachs analyst Michael Lapides, who inquired about the role offshore wind played in North and South Carolinas and about its inclusion in Duke Energy’s investment strategy, the company’s President and CEO Lynn Good said offshore wind will most likely be addressed in Duke Energy’s upcoming IRP.

“And where we think it might fit into the portfolio, I would think about it as something that probably has greater potential toward the end of the next decade”, Lynn Good said.

According to Duke Energy’s CEO, the offshore wind sector has so far not had much visibility due to a wind energy moratorium that ended last year.

“You may remember the history here in the Carolinas, there was a wind moratorium, so no wind through the end of 2019. So, it hasn’t had as much visibility as I think it will coming through this IRP and the clean energy process. So, it represents a future investment opportunity and we’ll know more as this policy gets finalized and as we make further progress on the fleet transition”.

In 2017, North Carolina Governor Roy Cooper signed a House Bill 589 which was mainly focused on solar energy, but which had a late amendment putting into effect an 18-month moratorium on onshore wind power developments. The amendment was added to freeze the issuance of wind farm permits and to allow for an assessment of the potential impact of interference of wind turbines on military operations in North Carolina, which has eight active military bases.

Immediately after signing into law the bill containing the wind moratorium, Governor Cooper issued Executive Order 11 to mitigate the impacts of the moratorium on wind energy projects in development, on those that would be brought forward after the moratorium expires, and on feasibility studies.

A little more than a year later, Governor Cooper signed Executive Order 80 to reaffirm North Carolina’s commitment to reduce statewide greenhouse gas emissions and support the expansion of clean energy businesses. 

At the beginning of 2019, Cooper announced USD 1.5 million to boost clean energy and green businesses in the proposed 2019-2021 budget, including a USD 300,000 study on North Carolina’s potential to host offshore wind operations and associated jobs.

This year, the North Carolina Department of Commerce launched a comprehensive project to assess the state’s supply chain and physical infrastructure best positioned to promote local offshore wind development, and to identify new opportunities to both develop commercial-grade wind energy off the state’s coast, as well as supply wind energy facilities along the entire eastern seaboard.

To produce the supply chain report, the North Carolina Office of Science, Technology, & Innovation issued a Request for Proposals (RFP) in May, seeking a consulting partner to help develop and publish a study on offshore wind supply chain and infrastructure. In August, UK-headquartered consultancy BVG Associates was awarded a contract to work on the supply chain and infrastructure assessment together with representatives from Lloyd’s Register Energy Americas, Timmons Group, and North Carolina State University.

Waters offshore North Carolina are home to the Kitty Hawk lease area, for which Avangrid Renewables secured the rights in May 2017. 

At the Kitty Hawk lease area, which has a potential generating capacity of 2.5 GW, surveys are currently under way with metocean and geotechnical data being gathered to inform the project design.

NOTE: This article was updated on 23 August with information on North Carolina’s wind energy moratorium, state-level decisions on offshore wind, and current offshore wind development.