Understanding North Carolina’s energy security needs

Thanks for joining us this Saturday morning.
 
In 2021, the legislature and then-Gov. Roy Cooper agreed to terms on House Bill 951, a landmark energy deal that – at the time, anyway – promised a framework for North Carolina’s energy future. The measure established in law a 70% carbon reduction goal by 2030, and net-neutral carbon emissions by 2050. To achieve those goals, the law said, the North Carolina Utilities Commission had to enforce an energy mix that was least cost and maintained existing reliability.
 
By 2024, though, the North Carolina Utilities Commission reported that projected growth in energy demand was eight times higher than projections from just two years prior.
 
That massive growth posed a math problem for the 2030 carbon reduction benchmark. After all, there aren’t a whole lot of ways to both increase energy generation and cut carbon emissions in just a few years. Utilities may have to choose energy generation sources that would meet that short-term goal but, in the long-term, may not be the cheapest and most reliable ways to meet the 2050 goal.
 
So this year lawmakers are considering Senate Bill 261, the Energy Security and Affordability Act, sponsored by Senate Leader Phil Berger, now-former Sen. Paul Newton, and Sen. Lisa Barnes. The measure does away with the 2030 benchmark while keeping in place the longer-term carbon neutrality requirement. It passed the Senate last month with support from both Republican and Democratic lawmakers. If enacted into law, the bill would give some runway to the state’s utilities to study, design, and ultimately create more power generation capacity with an eye toward the 2050 carbon deadline.
 
Recent technological developments, particularly in artificial intelligence, have recentered the energy policy debate. Yes, greenhouse gas emissions and climate change remain major tenets of the discussion, but affordability and capacity have taken on renewed importance.
 
That’s partly because artificial intelligence requires data centers, and data centers consume massive amounts of electricity. The U.S. Department of Energy reckons data centers could consume 12% of the county’s electricity by 2028, up from less than 5% in 2023, the News & Observer reported.
 
Over the course of just a few months in 2023 and 2024, Duke Energy upped its projected large new customer demand from eight projects requiring 1.3 gigawatts, to 35 projects requiring more than 3 gigawatts.
 
“Nearly half of that was from data centers/crypto, so about 1.5 gigawatts. That’s over and above the Carolinas’ strong residential growth factored into our base load forecast,” a Duke Energy spokesman told the News & Observer.
 
Managing this rapidly evolving demand landscape while racing to meet an arbitrary interim carbon reduction deadline seems from the outside like a recipe for imprecise, and expensive, action.
 
Many in the legislature seem to have the same feeling. “Removing the interim benchmark provides utilities with greater flexibility to select and construct new and affordable energy generation resources, like nuclear power,” reads a press release from Senate Leader Phil Berger’s office on Senate Bill 261.
 
Andre Beliveau, senior manager for energy policy at the Commonwealth Foundation, thinks the bill is good policy. 
He says the legislation restores least-cost and reliable energy policy for the state – allowing us to have real low cost planning, instead of a regulated dependence upon unreliable, expensive, short-term energy sources. 
 
And work on those longer-term generation options is already underway. Duke Energy has had its eye on small modular nuclear reactors for some time now, and in January 2025 announced a collaboration to advance the technology.
 
Federal regulators are also reviewing permit applications for the Mountain Valley Pipeline to extend its natural gas reach into North Carolina. The state right now relies on just one pipeline – Transco – for its supply of natural gas.
 
The bottom line is North Carolina is growing, it’s growing quickly, and it’s growing in high-energy-demand sectors. Lawmakers may soon determine that the way to meet North Carolina’s need for abundant, affordable, and clean energy is to pursue an energy mix that takes more than just a few years to bring online.