SEPTEMBER 2010
                                        

Duke Energy changes focus of coastal wind demonstration

Duke Energy Carolinas will no longer pursue a plan to place demonstration wind turbines in the Pamlico Sound.

Instead, the company and the University of North Carolina at Chapel Hill will refocus their collaboration to study and help enable large-scale offshore wind development on the ocean side of the North Carolina coast.

Since the project was announced in September 2009, Duke Energy concluded that the fixed costs associated with permitting, design and construction of the small-scale coastal wind demonstration project were no longer economically viable.

“As the team tackled this first-of-its-kind project, we realized that encouraging large-scale development of offshore wind resources is a better approach than enabling small demonstration projects that lack economies of scale,” said Paul Newton, senior vice president of strategy for Duke Energy’s franchised businesses. “The cost of the project simply exceeds the benefits our customers would receive if we were to continue.”

The relatively high fixed cost of developing, permitting and installing the first turbine makes a small demonstration project much less cost-effective. For example, the Duke Energy team determined the cost of the first turbine to be $88 million, while the second turbine would cost $14 million.

Additional challenges included the need to use modified shallow water construction techniques and a greater than expected potential of disturbing underwater vegetation.

Duke Energy will fund the completion of UNC-Chapel Hill’s yearlong study of bird populations begun through the coastal wind demonstration project.

In addition, Duke Energy will provide $405,000 for the university’s coastal wind ocean-side study, which began with a review of available historical data as part of a feasibility study requested by the North Carolina State Legislature. These research efforts will bring North Carolina a step closer to making large-scale wind power generation a reality off its coast.

In September 2009, the university and Duke Energy Carolinas signed a contract to place up to three demonstration wind turbines in the Pamlico Sound. The purpose of the pilot project was to study the potential for coastal wind generation off the coast of North Carolina.

Under that contract, the company would pay for the turbines and their installation, while UNC-Chapel Hill would conduct research on wind resources, ecological impacts and synergies, and initiate engineering studies of structural integrity during hurricanes. The turbines would have been among the first placed in waters off the United States coast.