Despite sale of commercial renewable business, Duke still interested in offshore wind

Gareth McGrath
Updated ·4 min read
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The five turbines of America's first offshore wind farm stand off the coast of Block Island, Rhode Island, as seen in October 2022. Duke Energy has sold its commercial renewables business, but says it remains committed to offshore wind projects.
The five turbines of America's first offshore wind farm stand off the coast of Block Island, Rhode Island, as seen in October 2022. Duke Energy has sold its commercial renewables business, but says it remains committed to offshore wind projects.

Duke Energy is selling its commercial wind and solar division to a global renewable energy company.

But the move doesn't mean the Charlotte-based utility giant is abandoning its push into renewable energy, including its proposed offshore wind farm south of Brunswick County, Duke officials said.

"Selling our Commercial Renewables business streamlines our business mix and strengthens our balance sheet – better positioning the company to fund growing investments in our regulated operations as we advance our clean energy strategy," said Duke Energy spokesperson Jennifer Garber. "This approach will support our robust regulated capital opportunities, which includes incorporating over 30,000 megawatts of regulated renewable energy into our system by 2035."

Unlike Duke's power operations in North Carolina, the Commercial Renewables business is unregulated. The division includes more than 3,400 megawatts of utility-scale solar, wind and battery storage power scattered across the country that it sells to other utilities and commercial customers.

Duke said the $2.8-billion deal will leave the renewables division headquartered in Charlotte, with its 550 employees transferring to Brookfield Renewable. According to a release, Duke is expected to net $1.1 billion from the transaction.

BLOWING IN THE WIND With offshore wind projects set to increase, is NC ready to capitalize on the opportunity?

Garber said the sale won't have an impact on any of the company's renewable energy projects underway in North Carolina. That includes the lease to build the Carolina Long Bay offshore wind farm roughly 18 miles south of Bald Head Island. Duke says the 54,000-acre site, which it paid the federal government $155 million to lease, could support up to 1.6 gigawatts of wind power by 2032.

"We secured the Carolina Long Bay lease to create valuable optionality for our regulated utility customers if the (N.C. Utilities Commission) determines offshore wind is part of the least-cost path to achieve its long-term carbon reduction targets, which will be evaluated every two years," Garber said via email.

Duke Energy is selling its commercial renewable energy division, which operates solar farms and other renewable energy sources, to a global clean energy company for $2.8 billion.
Duke Energy is selling its commercial renewable energy division, which operates solar farms and other renewable energy sources, to a global clean energy company for $2.8 billion.

Building a 'green' grid

North Carolina passed legislation in 2021 that mandates a 70% reduction in carbon emissions from 2005 levels by 2030. It also requires the Tar Heel State to reach net-zero emissions by 2050. But it is up to the state utilities commission, with advice from Duke, environmentalists and other stakeholders, to determine what is the best mix of power sources to reach that goal. While clean energy advocates would like to see North Carolina's future "green" grid powered by massive amounts of solar, wind and other renewable sources, Duke has said it needs to build a reliable and robust power grid that keeps the lights on while not costing rate payers astronomical sums of money.

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The first version of the utilities commission's roadmap on reaching that carbon-reduction goal included offshore wind, but didn't place a figure on how much power from the towering turbines Duke be required to purchase. The next version of North Carolina's carbon plan is expected to be released by the end of 2024.  Gov. Roy Cooper has set North Carolina a goal of developing 2.8 gigawatts of offshore wind energy by 2030 and 8 gigawatts by 2040.

The offshore wind industry, however, has run into stormy weather in recent months, with several partners in projects that are further along than the farms off North Carolina's coast − primarily in the New England area − looking to renegotiate their contracts with utilities due to rising construction costs, higher inflation and supply chain disruptions, and the war in Ukraine.

Recent whale and dolphin deaths, especially around New York and New Jersey, also have led some officials to raise warnings about the environmental impacts from the offshore wind farms. But federal scientists and other researchers say there remains no evidence connecting any recent whale death to what little activity, primarily survey and core work, that has occurred so far.

OFFSHORE POWER OUTAGE? Proposed bill could stymy North Carolina's offshore wind development

Two companies. one of which is Duke Energy, agreed to pay nearly $300 million to lease ocean areas roughly 20 miles south of Bald Head Island for proposed offshore wind farms.
Two companies. one of which is Duke Energy, agreed to pay nearly $300 million to lease ocean areas roughly 20 miles south of Bald Head Island for proposed offshore wind farms.

Jeffrey Robbins, executive director of CleanAIRE NC, said that while the clean energy organization supported Duke's stated goal of greater regulatory oversight, it worried the deal may eventually hamper the company's growth in renewable energy.

"The deal removes over 3 gigawatts of clean energy from Duke’s portfolio, along with significant institutional knowledge of the renewables market," he said in a statement. "CleanAIRE NC will closely monitor this deal, as well as Duke’s pledge to reinvest the proceeds into growing its regulated clean energy assets."

Duke's deal with Brookfield requires approval by the Federal Energy Regulatory Commission, among other regulatory hoops.

"We anticipate that everything will be finalized, and the sale will close by the end of 2023," Garber said.

Reporter Gareth McGrath can be reached at GMcGrath@Gannett.com or @GarethMcGrathSN on Twitter. This story was produced with financial support from 1Earth Fund and the Prentice Foundation. The USA TODAY Network maintains full  editorial control of the work.

This article originally appeared on Wilmington StarNews: Duke Energy to sell commercial renewable energy arm