Duke University uncertain over proposed new power plant

Acknowledging that a new fossil-fuel powered plant may have little environmental upside, Duke University officials say they are not committed to the $55 million project they announced in May, even if state regulators give it the green light.

“I have never argued this is an environmental breakthrough,” said Tallman Trask III, executive vice president of the university, during a 90-minute forum about the combined heat and power, or CHP, plant slated for Duke’s West Campus in Durham, North Carolina.

“We are not determined to do this deal,” Trask said. “We are determined to look at it, because in one form it’s very interesting and potentially transformative. In another form, we’re not interested. Right now I think it’s 50-50 that we’ll ever get there.”

Those revelations, along with widespread agreement that the CHP proposal is “complicated,” were the major takeaways from a discussion last Tuesday among faculty, staff and students. The small 21 megawatt plant has been a source of controversy on and off campus since its announcement earlier this year.

According to the recent application submitted to North Carolina utility regulators, the facility would be built, owned and operated for 35 years by Duke Energy (the utility is unaffiliated with the university; their names come from a common 1920s connection to tobacco and textile magnate James B. Duke).

The debate on campus could have implications beyond this university of 15,000 students, as utilities push similar institutions nationwide to build more such high-efficiency CHP plants — generally regarded as part of the solution to climate change.

“Duke University is a test case,” said sophomore Claire Wang, president of the university’s Climate Coalition, who is petitioning to stop the plant. “People are watching and waiting for us to model what environmental leadership by institutions of higher learning should look like.”

‘It’s hard to see how this will reduce the burning of natural gas’

The environmental appeal of combined heat and power is embedded in the name. Similar to how a car uses heat from the engine to warm the interior, CHP technology captures waste heat from electricity production, often to produce hot water and high pressure steam – valuable commodities for universities, hospitals and other large institutions.

Because every unit of fuel burned is essentially used twice, CHP plants are up to 80 percent efficient, compared to the 45 percent efficiency of plants that burn fuel only for power or only for heat.

“Inherently CHP systems use less fuel than the corresponding boiler or electric generator,” said Neal Elliott, research director with the Washington, D.C.-based American Council for an Energy Efficient Economy (and a proud graduate of Duke). “If you’re not burning fuel, you’re not creating emissions.”

Under this logic, proponents of the project say it will reduce emissions by displacing less efficient use of natural gas both on campus and elsewhere in Duke Energy’s fleet.

“This CHP system would avoid the need for Duke Energy to construct a new, natural‐gas fired generation plant,” Elliott wrote in a letter to the North Carolina Utilities Commission.

Many advocacy groups who support CHP, however, are skeptical of this proposal, which they say is not part of a comprehensive, verifiable plan to displace emissions elsewhere or avoid new construction.

“In general CHP should certainly be a considered option,” said John Steelman, another Duke grad and senior advocate with the Natural Resources Defense Council, “but as part of a plan to optimize solutions while minimizing emissions and fuel use — and that clearly is not this.”

“There’s no commitment that they’re going to close 21 megawatts anywhere on the grid if they build an additional 21 megawatts on Duke’s campus,” said Anna Henry of NC WARN, the nonprofit that issued a report last week noting the plant did not represent the “the kind of implementation of CHP that NC WARN has ever promoted.”

“It’s hard to see how the addition of this plant is going to reduce the burning of natural gas on campus and in the overall community,” Henry said.

The pollution ‘adds up’

Advocates are concerned a provision in a pending Obama administration climate regulation could mean the new plant would result in much more natural gas pollution, not less.

The Clean Power Plan, the rule in legal limbo that regulates carbon pollution from power plants, requires all facilities of 25 megawatts or more to meet statewide emissions caps that decline over time. The proposed facility, at 21 megawatts, wouldn’t fall under that cap.

“That will give Duke Energy more headroom to pollute,” said NRDC’s Steelman. “So they will have to invest less in efficiency and renewables to meet that standard.”

Steelman warned against the impact of utilities building many of these small CHP plants not covered under the Clean Power Plan at universities and other institutions.

“If you did this 200 times, 1,000 times, it adds up,” he said. “Ten of these [21 megawatt plants] and you have a 200 megawatt power plant that’s not regulated.”

Officials at last week’s forum indicated they want to avoid this loophole.

Responding to a question from the audience, Trask said regardless of the plant’s size, Duke Energy “will be contractually obligated to operate it as if it were a 25 [megawatt plant].”

No matter how this plant – if it is built – is treated under the Clean Power Plan, Duke Energy’s push to build other similar small plants is unmistakable. Of the 18 new gas plants proposed under the utility’s 15-year plans in North and South Carolina, at least six are CHP plants at about 20 megawatts each.

Duke Energy spokesman Randy Wheeless didn’t deny his company’s interest in partnering with other universities and institutions on CHP projects. But while he could easily envision a scenario in which the Duke University plant offset other more polluting forms of energy, he said the strongest “environmental story” was for the campus itself.

“I suppose you could make the case that this would displace less efficient and more costly generation, which could be coal-fired or could be older natural gas generation,” he said.

“You could make that case. But really when we went into this project we were thinking, ‘we’ve got a university that is looking to lower their carbon footprint, how can we make that happen?’”

Yet whether Duke University’s Climate Action Plan goal of becoming carbon neutral by 2024 would be meaningfully helped by the new plant — like most everything else about it — is a source of contention.

An ‘impression of being climate friendly’

In May, the university projected the plant would lower the campus’s overall emissions by “about 25 percent.” Last month a university planning document revised those projections downward, and at last week’s forum, university officials conceded the overall emissions benefits could be lesser still.

“It’s better than the current circumstances, but not by much,” Trask said of the plant’s environmental impact.

The variation stems in part from how pollution created by the CHP plant is factored into the campus’s climate pollution allowance.

In the rosiest predictions, the plant’s pollution isn’t included in the budget at all, since officials say it is canceled out by emissions that would have been created elsewhere if the facility weren’t built. Under this scenario, the plant reduces campus climate emissions 18 percent by cutting existing use of gas steam plants in half.

But if the university takes ownership for the CHP plant’s emissions, as critics argue, the carbon savings decrease to about nine percent.

Then there is the matter of methane, the greenhouse gas many times more potent than carbon dioxide that can leak into the atmosphere during natural gas production. Because the campus will be burning more natural gas with this CHP plant than without it, many say these additional methane leaks should be factored in to the university’s climate pollution allowance.

Accounting for that leakage rate, as well as transmission loss for the CHP-produced electricity that goes onto the grid, reduces the benefit to about four percent, professors Prasad Kasibhatla and Drew Shindell wrote in a recent opinion piece for Duke’s newspaper, The Chronicle.

Depending on the methane leakage rates used, Kasibhatla said the benefit could go to zero, or even become a “disbenefit.”

“From the [climate] accounting perspective it doesn’t really make a lot of sense,” he said. “It shouldn’t be touted as one of the main reasons that we’re building this plant. It gives the impression that we’re being climate friendly by building this plant, and I don’t think that’s necessarily true.”

Climate neutrality or energy security?

Like the projected carbon reduction benefits, Duke University’s primary interest in the plant has appeared to shift over time.

The May announcement of the plant said it would “accelerate progress toward climate neutrality,” and news outlets such as Charlotte Business Journal highlighted that progress in their coverage.

But Trask said last week that protection of the environment was never the university’s main motive. Instead, as he did in an August interview with INDY Week, he said he and other officials primarily sought a back-up source of power for the university’s hospitals.

“What attracted us initially to the whole idea was energy security,” said Trask. “This is not a huge move forward in the environmental space. But it does protect patients in the hospitals.”

The argument has stymied some critics of the plant, who presumably don’t want responsibility for denying electricity to patients when they need it most. But they also note that state rules mandate the hospital be completely backed up by onsite diesel generators, and a new CHP plant would not change that requirement – even if the university created a ‘microgrid’ to cut it off from the rest of the utility so that it only served the campus, as officials envision someday doing.

“Energy security and reliability are very important issues to be concerned about,” said NRDC’s Steelman. “But the first thing that they should do is really assess their needs and see if they can come up with the best package of things to do that will actually minimize their backup power needs, and make their back up power more secure, before [they] build a power plant that may well increase emissions.”

A plan the campus and community want

Duke University has already made clear that even if state regulators approve the project, Duke Energy may reject any number of the university’s stipulations, including that it be regulated under the Clean Power Plan, and that an “exit clause” allow it to be converted to biogas or other cleaner fuel before the end of its projected 35-year lifespan.

“I don’t know that we’ll ever get to a deal that we want to do,” said Trask. “We are not going to agree to 35-year obligation to burn fracked gas.”

Advocates, students and faculty say they want more transparency and open discussion of these stipulations and other aspects of the plant proposal, which could be considered by state regulators early next year.

The Duke University Climate Coalition applauded last week’s discussion and plans another forum on the CHP plant this week. The group has also asked state regulators to hold a public hearing about the plant proposal on campus.

“I want to believe in the Duke University that I envisioned when I first stepped onto these campus grounds,” said Wang, the coalition’s head, who said she came to the school for its environmental curriculum. “Forums like these are the first step to real dialogue and action about this gas plant and all future major energy decisions.”

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