In recent months, the topics of climate change and carbon dioxide emissions have appeared everywhere from Paris to Washington and even onstage at the Oscars. It’s clear the world seeks a lower-carbon future.
Achieving this global ambition requires active engagement nation by nation, state by state. It means, among many other things, cleaner power generation sources, greater energy efficiency and a smarter electric grid – which all converge in local communities where customers still expect reliable, affordable electricity every hour of every day.
Different customers, different expectations
This intersection of reliability, affordability and environmental responsibility is where you’ll find electric power companies. We must perform the science and engineering to generate cleaner energy while meeting our customers’ different demands.
We have a responsibility to serve everyone from industrial customers who seek flawless reliability at a globally competitive price, to fixed-income customers who worry about any increase in their monthly bills, to customers who want all their power from renewable sources today. How well we navigate these expectations will have important implications for the environment, the economy and our communities.
There is already strong momentum toward a clean-energy future. The U.S. electric industry has lowered carbon emissions by 15 percent since 2005, with Duke Energy achieving a 26 percent reduction. But we have more to do, and it will take changes across the energy system to get there.
Shifting the energy resource mix
A major piece of the lower-carbon puzzle is shifting the power generation mix. This means more renewable energy, natural gas and energy efficiency, complementing carbon-free nuclear plants. It also means less reliance on coal-fired plants. No power source is the sole solution – each has its strengths and limitations. It takes a balanced energy portfolio to provide affordable, reliable electricity.
Consider renewable energy, which is important for our future and growing fast from a very small base. At Duke Energy, we’ve invested $4 billion in wind and solar since 2007 and plan to spend $3 billion more in the next five years. But since solar and wind produce power only 20 to 40 percent of the time, they must be part of a complementary portfolio of other generation resources. This is what it takes to meet customer requirements for power 24 hours a day, seven days a week, during all seasons of the year. Battery storage could prove to be an important part of this portfolio, and much work is underway to understand and further develop this technology.
There is already strong momentum toward a clean-energy future.
Let me give you an example of the practical reality of meeting customer needs. On a winter day in the Carolinas, solar energy can’t help meet our customers’ demand for electricity when it’s greatest – early in the morning while people get ready for work and in the evening as they relax at home. This is why we still need generation sources we can control, such as natural gas, nuclear and coal.
Today, natural gas is growing rapidly – it is more affordable than coal, with half the carbon emissions. Due to the shale gas boom, we have an abundant supply of this flexible fuel source that we can adjust, as needed, to meet daily fluctuations in demand.
Nuclear energy remains the only zero-carbon generating source that we can operate around-the-clock with very high reliability. In 2014, nuclear energy accounted for 63 percent of U.S. emission-free generation. As a company and as a nation, we need to wrestle with the role nuclear will play in the future, including extending the life of existing plants and building new facilities. If our objective is lower carbon emissions, then nuclear should be part of the solution.
Finally, you can’t discuss cleaner generation without discussing energy efficiency. Customers can help reduce carbon emissions by taking advantage of new energy-saving technologies and utility-sponsored initiatives for their homes and businesses. For example, at year-end 2014, Duke Energy’s energy efficiency programs had reduced customers’ energy consumption by more than 8,000 gigawatt-hours, enough to power 650,000 homes for a year. We expect even greater results when the final tally is in on 2015.
Transforming the delivery system
Another puzzle piece in lowering carbon emissions is modernizing the power grid to accommodate the new generation mix.
The grid was designed to send electricity from large, central generating plants to energy consumers. However, the intermittent nature of renewables is placing new demands on the grid, including the need for a two-way flow of electricity. For instance, a customer might put excess electricity onto the grid one moment and draw power from the grid the next.
These new market dynamics are straining a system not designed to perform this way. To allow for wider adoption of these renewable power sources, we need to make the grid more intelligent and flexible, which will include new digital technologies and improved battery storage.
Serving customers today and tomorrow
Lowering carbon emissions is a complex challenge that defies a quick, single solution. Even so, I’m optimistic about what we can accomplish with an integrated, balanced approach to the entire energy puzzle and a strategic, thoughtful transition. It takes navigating multiple priorities and making decisions that benefit customers and communities today and decades from now.
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