Dive Brief:
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Duke Energy is developing a framework for offering clean energy to large commercial and industrial customers in the Carolinas, with an initial focus on Amazon, Google, Microsoft and Nucor, the companies said Wednesday.
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The planned Accelerating Clean Energy tariffs will include financing options that could be used to support emerging technologies such as long-duration energy storage and advanced nuclear power as well as “mega” projects, Lon Huber, senior vice president for pricing and customer solutions, said Thursday in an interview.
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Duke expects to begin filing new tariffs with utility regulators in North Carolina and South Carolina within a month or two, but the process will occur in stages, Huber said. The clean energy tariffs will be available to Duke’s C&I customers.
Dive Insight:
The C&I class makes up about 35% of Duke’s overall load in the Carolinas, but it is expected to grow in the next five years as technology companies and manufacturers expand their operations, according to Huber.
The Accelerating Clean Energy program will offer C&I companies a suite of clean energy options to pick from to meet their clean energy goals without increasing costs for other customers, he said. A company would have an individual “lean transition tariff” that could cover, for example, demand response, onsite generation and 24/7 clean energy, according to Huber.
The planned program is multifaceted “because it has to be comprehensive … because there's no silver bullet on clean energy yet, so you need to have a bunch of different technologies that work in harmony to get to deep decarbonisation,” Huber said. “It takes ‘all of the above’ to do this both at a system level but also individualized for a customer.”
The plan includes the potential for various financing options that could enable emerging technology, such as a premium for a resource’s attributes, help with cost overrun protection and low-cost financing, according to Huber.
“It creates and formalizes a new pillar of support for emerging clean tech and large mega projects, and this is something that really hasn't been standardized or done on any scale before,” he said. “We'll be working it out with these partners, with regulators and other stakeholders on what's the best way to structure a tariff to help capture the variety of different ways a large customer can support these types of emerging or big clean energy projects.”
The companies signing initial memorandums of understanding with Duke have a range of clean energy goals.
Google, for example, aims to run its operations on clean electricity every hour of the day by 2030. “Through collaboration with Duke Energy, the Clean Transition Tariff creates a pathway for us and our peers to bring new, innovative solutions to the forefront faster,” Briana Kobor, Google’s head of energy market innovation, said in a statement.
It’s good that large customers are pushing for increased clean energy options beyond “business as usual” utility supply, but there may be smaller C&I customers and residential customers that would also want clean power beyond what Duke already offers, according to Nick Jimenez, senior attorney at the Southern Environmental Law Center.
Also, the plans by the large customers like Google to acquire clean energy for their facilities may call into question Duke’s recent proposal to add about 2 GW of gas-fired generation to meet rising loads, Jimenez said Thursday.
“If there's a tariff coming that allows all of these large corporate entities that have significant climate goals to procure new clean generation for themselves, then we shouldn't be building gas plants to also meet that load,” he said.
