Duke nixes 500 MW wind buy over transmission cost concerns

Source: By Robert Walton, Utility Dive • Posted: Thursday, July 19, 2018

  • Duke Energy has abandoned a request for proposals (RFP) to purchase 500 MW of wind energy for customers in North Carolina after the utility concluded proposals were “not attractive enough for us to continue to pursue,” a spokesman told Utility Dive.
  • The wind RFP has been canceled, but Duke is still looking to add more renewables. While the purchased wind energy would have come from out of state, last week Duke filed an RFP for 680 MW of large-scale solar and other renewables in North Carolina and South Carolina.
  • Duke is also accepting applications from customers interested in the utility’s five-year, $62 million solar rebate program that is expected to more than double the number of solar customers in North Carolina over the next five years.

Dive Insight:

Duke Energy’s mad dash to add renewable energy — its green resources grew almost 20% last year — hit a relatively rare snag this spring when proposals for out-of-state wind resources came in priced too high.

“We were targeting some Midwest wind, we know that market pretty well,” Duke spokesman Randy​ Wheeless told Utility Dive. But the utility was somewhat surprised by the proposed projects. “We thought they’d be a little more attractive.”

According to Wheeless, a lack of transmission options may have been the cause.

“One of the key things for Midwest wind is what kind of transmission corridors you have,” he said. “There have been some projects talked about but that haven’t come to fruition. We were thinking there would be better transportation methods than there are.”

While the utility could consider wind resources again in the future, the uneconomic proposals have it looking elsewhere for now. Because Duke included the possible purchase of 200 MW of wind energy in its integrated resource plan last year, it remains uncertain whether the utility will need to find replacement power.

Wheeless said the utility could look to replace that with solar “or see what wind offers in the next year or two.”

The wrinkle comes as wind energy proposals, and renewables generally, have been coming in at record-low prices. Last year an all-source solicitation held by Xcel Energy returned wind+storage prices of $21/MWh, and wind-only at just $3/MWh higher.

Duke has been rapidly adding renewable resources to its system, transitioning away from a generation mix heavy on coal. In April, the utility announced its renewable energy capacity grew by almost 20% last year, and almost 40% of the company’s electricity produces no greenhouse gas emissions.

Earlier this month Duke rolled out two renewable energy programs aimed at boosting solar power in North Carolina. The utility now has more than 2,500 MW of solar capacity connected to its grid, including Duke-owned and third party-owned projects.