New analysis: Unusable fossil fuels will cost Duke’s Carolina customers $4.8 billion
Energy Transition Institute pencils out potential stranded assets in Integrated Resource Plans
RALEIGH, N.C. — Existing and proposed fossil fuel investments in Duke Energy’s latest resource plan for the Carolinas will become unusable during their planned lifetime, costing $4.8 billion, equivalent to $900 per Carolina family in today’s dollars, a new report from Energy Transition Institute found — more than double Duke Energy’s sunk costs in the Atlantic Coast Pipeline.
Duke Energy is currently proposing to build more fossil fuel generation capacity than any electric utility in the United States, and the report represents the most comprehensive assessment to date of Duke Energy’s stranded asset risk. The proposed Integrated Resource Plans (IRPs), currently under consideration before the North Carolina Utility Commission and South Carolina Public Service Commission, include plans to build up to 9.6 gigawatts of new gas-fired generation, in spite of state and company commitments to reduce climate pollution.
“If regulators don’t act immediately, ratepayers will bear a significant burden, to the tune of $900 per customer,” said Tyler Fitch, lead author of the report and Southeast Regulatory Manager for the solar advocacy non-profit Vote Solar. “This is not just irresponsible in the long-term transition to renewable energy, it’s unfair to consumers. Simply put, Duke isn’t taking climate risk seriously.”
The $4.8 billion in stranded costs includes fossil-fueled power plants that will be outcompeted by more economically competitive technology, affected by climate-amplified heat waves, weather, and flooding, or rendered unusable due to constraints on carbon pollution. These power plants are considered ‘stranded’ assets because Duke Energy will be unable to realize some of the expected value of these investments.
“In order to keep costs low for consumers and mitigate climate risk, Duke Energy must re-examine their plans to build more gas-fired power plants by incorporating their commitments and known risks into the planning process,” said Fitch. “State regulators also have a role to play. Commissioners should affirm that climate-related risks are material and require prudent management, and send Duke back to the drawing board.”
The IRPs are the first filed in the Carolinas since Duke Energy’s September 2019 commitment to reach zero carbon emissions by 2050, and legislation in South Carolina and executive action in North Carolina indicate interest in climate action. Nevertheless, the proposed IRPs would maintain the current level of carbon-emitting generation capacity through 2035.
Energy Transition Institute is a 501(c)(3) think tank that educates decision-makers about the benefits of transitioning to environmentally responsible energy sources, through evidence-based resources, analytical tools, and public forums.