(Miss this week’s Leadership Brief? This interview below was delivered to the inbox of Leadership Brief subscribers on Sunday morning, Jan. 24; to receive weekly emails of conversations with the world’s top CEOs and business decisionmakers, click here.)
We might finally get infrastructure week. The election of Joe Biden and the subsequent twin Senate election victories in Georgia, which gave Democrats a narrow majority in both houses of Congress, have raised hopes that the next four years will see substantial investment in renewable energy, storage technology and electric-vehicle infrastructure. Tactically, Biden’s approach is to link green investment to job creation and economic recovery: Earn union-level wages making solar panels! And independent of federal policy, there is both growing consumer demand and private-sector investment in more sustainable products, as evidenced by Tesla’s $800 billion market cap.
For more than a decade Duke Energy, one of the nation’s largest power generators, has been working to wean itself off coal in favor of cleaner sources of energy. Since 2005, Duke has reduced its carbon emissions by 39%, retiring 51 coal-fired power plants in the process and becoming a major operator of solar farms in eastern North Carolina and elsewhere. It recently completed installing 530 charging stations in Florida, part of a plan to establish a corridor of stations throughout the region it serves. Still, the company says it will face significant challenges in ramping up to produce enough green energy to power the homes and industries in its six-state operating area (Florida, the Carolinas, Ohio, Kentucky, Indiana). The company says it will require getting nearly 30% of its power from technologies that are yet to be invented to meet its target of becoming a net-zero producer of carbon by 2050. The remaining power will be generated by renewables (40%) and nuclear (30%). Developing such breakthrough technologies will require a national effort to “supercharge R&D investment,” says Duke CEO Lynn Good.
For all its focus on greener forms of power, Duke Energy is still dealing with its legacy as a big coal consumer. In fact, Duke has up-close experience with Biden’s nominee to lead the Environmental Protection Agency, Michael S. Regan, who has been serving as the head of North Carolina’s department of environmental quality. In January 2020, Regan reached a settlement with Duke for the cleanup of nearly 80 million tons of coal ash at six Duke facilities in North Carolina. Coal ash, which is created when coal is burned to create electricity, contains mercury, cadmium and arsenic, and without proper management, these contaminants can pollute waterways, groundwater, drinking water and the air. It was the largest coal-ash cleanup in the nation’s history. At the time, Regan said, “We are holding Duke accountable and will continue to hold them accountable for their actions as we protect public health, the environment and our natural resources.” Good said the settlement “is a reasonable, commonsense approach that protects people and the environment, while keeping costs in check as much as possible to benefit our customers.”
Good recently joined TIME for a video conversation to discuss the new Administration, the challenges of energy storage and what it’s like when protesters build a fracking tower on your front lawn.
(This interview with Duke Energy CEO Lynn Good has been condensed and edited for clarity.)
How has the recent election changed the timetable of your goals?
As I look at the Biden Administration, climate is their top priority. It’s important to them. It’s important to us. We’re well-positioned, and we’ll be looking for ways to work with the Administration and the new Congress to accelerate and advance our plans in the interest of our customers.
Are there specific areas where you think you know the timetable can really accelerate?
Renewable deployment is going to be a part of the story. We are spending a lot of time talking about the need for investment in new technologies, whether it’s longer-duration storage or hydrogen, advanced nuclear, carbon capture. Because as we look at the next three decades, we need some new technologies in order to get to net-zero.
Are we at a tipping point?
Movement around carbon reduction and incentivizing investment is not just a federal matter, it’s a state matter. States are moving. Customers are demanding it. There’s momentum from a number of different places.
I was surprised to learn that North Carolina is the No. 2 solar producer in the country. Is that because the sun always shines in North Carolina, or is this policy?
It has been primarily driven by policy, tax incentives. A lot of federal incentives really spurred that development.
And there’s a lot of days of sunshine in the state?
The challenges in North Carolina are not around sunshine; there’s plenty of it. It’s the way electricity is used in the state. We are a winter-peaking utility, which means the highest demand for electricity is on winter mornings—January, February, 7 a.m. There is no solar then. So we have some things we’re working through on how to match the renewable resource with the time that people actually use the power. We still use resources that we can turn on when we need them, which is natural gas and other things. An example of this would be if it’s sunny on a Sunday afternoon in January, and I know that it’s gonna be 15° on Monday morning, I may not be able to store enough power in order to meet that need on Monday morning. And I further have to think about is it gonna be sunny enough on Monday to recharge the batteries? And so I’m making decisions on whether or not I need to ramp up some other form of generation to get me through Monday, prepare me for Tuesday, prepare me for Wednesday, because our customers don’t want intermittent power.
Let’s talk about storage, the holy grail for the energy industry. Someone in solar said it’s one of the few modern industries that can’t store the product it makes. What improvements do you anticipate in the future?
We have a lot of planned investment in storage, about $500 million [over 15 years] in various storage resources. We are still looking, though, for something that can move energy and store energy longer than hours. We need some more science and R&D and research and technologies for it to truly be the holy grail. Because I don’t think the holy grail is moving it from 2 in the afternoon to 5. It might be to move it from, you know, a sunny day on Jan. 5 to Jan. 20, when we have an extended period where it’s cloudy. So that longer-duration storage is really where we’re focused from a 2030s and 2040s standpoint.
So there’s sort of incremental improvements under way, but the storage game changer is still to be invented?
To be developed.
How reliant are you on technologies that don’t currently exist today to meet your carbon-reduction goals?
We have a clear line of sight on how to get to 2030 with existing technology. When you get in the 2030s and 2040s, that’s where it becomes a little bit more complex, because I don’t know if I’m gonna be choosing nuclear or carbon capture or long-duration storage or … and so making that prediction of what it’s going to look like in 2050 will depend a lot on what technologies develop. We are not prepared to say it’s going to be a future of 100% renewables. Because as the person who has to make it work, we don’t know how to make that work today.
So about half of your energy currently comes from nuclear plants?
Right. We are strong advocates for nuclear power. If you look at the Carolinas in particular, we have six nuclear power plants that provide 50% of the power for this region. It’s carbon-free, it runs all the time. So you turn a nuclear plant on, many of them run for two years without interruption. You refuel them every two years. We’re also working with TerraPower on advanced nuclear that has storage capabilities as part of their design.
I read a letter to the editor in your local paper that was headlined “I protested in Lynn Good’s driveway and here’s why.” That sounds like quite a day.
I completely respect different voices in the conversation and the fact that not everyone’s going to agree with everything we do. We are very active engaging with stakeholders from the environmental community, from various customer groups, because we want to hear what they have to say. When it comes to my home, though, I probably like it a little bit less. They had built a structure—it was a fracking tower—and actually brought it in on kind of a trailer-type thing.
In the end, your company ended up canceling the pipeline that was under consideration that was being protested. So part of the objection was it went over a portion of the Appalachian Trail, is that correct?
It didn’t go over it, it went under—700 ft. under, entering on private land, under the trail, exiting on private land. There are 56 pipelines that run under the Appalachian Trail.
How has your residential vs. commercial/industrial mix been affected by work from home and the economic slowdown related to COVID shutdowns?
Workers are at home. Our residential load has been up 4% to 5%. The decline in commercial/industrial has been much greater than the increase in residential, so we project to be down 3% overall in 2020.
Describe your investments to help develop the electric-vehicle industry.
To take away that concern about how am I going to charge my car, we have been active in trying to put charging infrastructure in place in our states to really spur adoption. So we put in 530 [charging stations] in our service territory in Florida. We just have approval for a pilot in South Carolina. We just got approval for doing so in North Carolina. We’re trying to create corridors of charging infrastructure. Transportation is a larger carbon emitter than electricity. And so if we can get cars off the road that are combustion engines and put them into the electric category, then our carbon reductions will further the carbon reductions in the transportation sector.
New topic. In September the Wall Street Journal reported that NextEra made an unsolicited takeover proposal for your company in a deal valued at $60 billion. Are there any ongoing talks?
So no comment, Eben, on market rumors. That has been our long-standing practice.
What’s the most vexing problem that you’re wrestling with right now?
I’m excited about a future where we have a clear vision of where we’re trying to go. But anyone who has a clear vision also has obstacles along the way. Those obstacles might look like there’s a simple way to do it when you know there isn’t a simple way. I want to get to net-zero by 2050; there are a lot of choices you have to make.
And so I have some stakeholders who want me to close everything tomorrow and build renewables. They don’t care much about the price because they’re strongly motivated by the environmental benefit. And then I’ve got customers who are on fixed income who will say to me, “I cannot afford one more dollar. Not one more dollar.” And so I have to find a way to get those opposing points of view, different points of view, put together to develop a plan I can execute.
I can’t keep letting price go up forever. But I also can’t stand on the sidelines and not improve the environmental footprint. So that’s where the complexity comes, and executing the clear vision, trying to find the right pace, the right timing, the right trade-offs, building support for the decisions you have to make. Because the execution is very hard.
I love hearing from readers. Please write me at email@example.com. Question: In terms of reducing your carbon footprint, what changes have you made in the pandemic that you think will be enduring? For instance, do you think you will fly more or less after things “return to normal”?
Interested in energy and climate change? Here are some book recommendations.
Energy and Civilization: A History by Vaclav Smil
The Prize: The Epic Quest for Oil, Money & Power by Daniel Yergin