North Carolina Poised to Slash Climate Pollution

Under Governor Cooper’s leadership, North Carolina is changing course, moving toward a clean energy economy 

“A strong clean energy economy combats climate change while creating good jobs and a healthy environment. With historic storms lashing our state, we must combat climate change, make our state more resilient and lessen the impact of future natural disasters.”

—Governor Roy Cooper

In the aftermath of Hurricane Florence, and the two subsequent superstorms that ravaged North Carolina over the last three years, Governor Roy Cooper issued Executive Order No. 80, highlighting the state’s commitment to fighting climate change and leading North Carolina’s transition to a clean energy economy.

The Executive Order must accomplish two important objectives:

1 .First, it must swiftly tackle the state’s biggest sources of greenhouse gas emissions: the electric, industrial, and transportation sectors.

2. Second, it must address the state’s vulnerability to storms like Hurricanes Matthew and Florence, sea level rise, and the growing list of other impacts the state will experience due to climate change.

Doing so requires setting clean energy targets to decarbonize the state by 2050, making  investments in clean energy technologies, industries and jobs, and putting more electric vehicles on our roads across the state.

But cutting emissions is only part of the climate challenge—North Carolina must also grapple with the tangible impacts of climate change that are already hitting the state and undertake aggressive action to prevent the worst impacts from occurring. That means making sure homes and infrastructure are more resilient to climate-fueled disasters, helping communities avoid damage from storms and floods, and ensuring the state is prepared for droughts and wildfires in the future.

So, it’s been all hands-on deck in North Carolina to help craft these regulations. Over the last six months, the North Carolina Department of Environmental Quality (NC DEQ) has embarked on a listening tour across the state, providing a forum for citizens, businesses, environmental organizations and scientists. NC DEQ also launched a series of stakeholder meetings aimed at gathering the input necessary to achieve the goals of the order. These meetings presented background information and clarified important values and key strategies. The agendas, presentation materials and videos of all these events can be found online on NC DEQ’s website. There are two meetings left, one on June 26^th and the last one on July 24^th. The agency is also collecting comments through an online public comment period that is open through July 31^st.

Throughout this process, NRDC and others have performed independent analyses in order to gain a better understanding of the opportunities the state has to address its climate pollution. We hope the work NRDC and others are doing will help shape the policies and actions taken to achieve the state’s climate goals.

NRDC, as well as other experts, have confirmed that North Carolina has an immediate, cost efficient, and immense opportunity to move beyond its fossil-powered past.

Background on NRDC Modeling

NRDC modeled a number of policy scenarios for this effort.¹ This includes scenarios that explored clean energy policies, like strengthening the state’s renewable portfolio standard and increasing energy efficiency investments in the state; scenarios that focused on carbon policies, like having North Carolina join the Regional Greenhouse Gas Initiative (RGGI) [link] and cap carbon pollution from the state’s power plants; and scenarios that combined these two types of policies, both capping carbon pollution and also increasing investments and state policy targets related to the deployment of local clean energy solutions, like solar power and energy efficiency.

NRDC Findings: The Future is Sunny—Clean Energy Is an Economic Win for the State

In every scenario modeled—with or without new policy action from the state—North Carolina sees a significant switch away from the dirtiest power plants to new clean, renewable sources. This transition away from fossil fuels to renewable (mostly solar) power is driven by economics, proving that clean energy can be an economic and environmental powerhouse for the state.²

North Carolina is already the second-biggest state in the country for solar power—representing almost $8 billion in investments and 7,000 permanent local jobs—and NRDC’s modeling projects that solar will continue to flourish in the state for the foreseeable future. Many of North Carolina’s coal plants are aging, dirty, and just plain expensive. Wind and solar farms are already the cheapest form of new power, and in many places it is cheaper to build new renewables rather than just run existing coal-fired facilities. As the costs of solar and wind energy continue to fall (solar prices fell by 18 percent in just the last year alone and 88 percent in the last nine years) and supporting technologies like battery storage that can help integrate intermittent renewables and maintain a clean and reliable grid, the economics of clean versus dirty will only improve.

By 2030, the state adds an additional 6 to 16 GW of new solar power (for reference, the state currently has about 4 GW of solar online and each GW of solar can power about 150,000 North Carolinian households annually).

If the state chooses to be a leader, the largest increase in solar occurs in our clean energy policy cases, where we extend and increase the state’s renewable portfolio standard to 30 percent by 2030 (the current RPS calls for 12.5 percent by 2021). In these clean energy cases, around 20 GW of solar is operating by the end of the next decade (with the most solar built in the case where we both strengthen the state’s clean energy standards and cap carbon pollution from the state’s power plants). These clean resources power 3 million households in the state each year by 2030—equal to over two-thirds of all electricity consumed by residential customers in North Carolina last year. Just passing a carbon policy—capping the climate-warming pollution from the state’s power plants—results in some additional solar development beyond “business-as-usual,” though significantly less than built in response to passing a revised and strengthened renewable energy standard.

Even in our “business-as-usual,” where no new policies and assumed and we force the state to build over 9 GW of new gas plants that Duke included in its most recent long-term plan, the model still finds it economic to build another 6 GW of solar over the new decade—a 150 percent increase in the state’s solar capacity from today.

North Carolina’s Power Sector Can Be a Huge Source for Climate Action

Executive Order 80 calls for the state to reduce greenhouse gas emissions by 40 percent from 2005 levels by 2025. This target is a significant, aggressive, and feasible goal for the state and the power sector can and should be a huge part of meeting this climate challenge. As shown in the graph below, NRDC’s modeling finds that the state’s power sector will meet this 40 percent goal due to just economics, although the sector will have to do more help the state achieve the economy-wide goal. As the oldest and most expensive coal plants retire—replaced by the cheapest source of new power, solar energy—the power sector’s carbon footprint naturally falls in our modeling. The state’s power sector has already cut carbon pollution by 37 percent as of 2017 (compared to 2005 levels), even as the rest of the state’s economy has only reduced emissions by 12 percent.

And while the state’s power sector has already achieved significant reductions in carbon pollution, it doesn’t mean that the state doesn’t need to do more to achieve the economy-wide goals of the Governor’s Executive Order.

First, if Duke builds all the gas plants it has proposed, the state’s emissions will continue to rise after 2025 as these new fossil-powered facilities come online. Even though they meet the 2025 target in 2025, emissions will exceed this target within the next three years—and only grow past there.

Second, the power sector is one of the easiest and cheapest areas to cut carbon from. Renewables are clean and cheap, providing utilities with climate solutions that are best for the environment, public health, and their customers’ pocketbooks. By 2030, the average residential utility bill in the carbon + clean energy policy case is almost 2 percent lower than “BAU”—while also cutting over 20 million tons of carbon emissions (equivalent to the pollution from five large coal plants) annually compared to our BAU case. Smart, cost-effective policies could drive much deeper pollution cuts from the power sector—and help lift the burden from other sectors of the state’s economy, like agriculture and manufacturing, that can be costlier to decarbonize. If the state pursues both a carbon and clean energy policy package, the power sector could cost-effectively cut carbon pollution by 53 percent by 2025—and see emissions continue to fall after that.

Pushing the power sector to go further and faster is the best option for the state’s economy, North Carolinians, and our climate. The state, as part of it’s climate plan to meet EO 80, should ensure that they tap the low-cost climate potential of the state’s power sector and prioritize policies and actions that accelerate the transition from dirty to clean power.

[1] NRDC is a national not-for-profit organization with more than three million members and e-activists. We frequently use power sector modeling to understand the costs and benefits of different policy proposals. NRDC’s analysis of potential policies to comply with the climate goals of Executive Order 80 was performed by energy consultancy ICF, using their Integrated Planning Model (IPM^®), and assumptions developed by NRDC. IPM is a detailed model of the electric power system that is routinely used by the electricity industry and regulators, including the U.S. Environmental Protection Agency, to assess the effects of environmental regulations and policy. It integrates extensive information on power capacity and generation, technology performance, transmission, energy demand, electricity and fuel prices, policies, and other factors. IPM then determines the most cost-effective way to meet electricity needs, based on its detailed representation of the U.S. electricity system. It can build new power plants, retire existing plants, or ramp them up and down to meet demand in the least-cost way. Assumptions for this analysis were developed by NRDC, relying primarily on publicly available projections from various parts of the U.S. Department of Energy (DOE). 

[2] In addition to these clean energy and climate policy approaches, NRDC also modeled a “IRP-Like” case that forced in the new gas plants Duke Progress and Duke Carolina are proposing to build in their service territory over the next decade and a half. This “IRP-like” case will serves as the main point of comparison.