John Downey Senior Staff Writer- Charlotte Business Journal

Email  | Twitter  | Google+

Duke Energy Corp. (NYSE:DUK) has established a group that will determine how to develop and operate solar projects at its regulated utilities.

The utilities currently purchase some renewable energy, but they own almost no generating capacity of their own. Duke expects that to change and is looking for the best way to proceed.

Rob Caldwell, who until Friday was Duke’s vice president for wholesale power and renewable generation, is now head of Duke’s new renewable generation development group. He says the group’s immediate task is to analyze on how Duke’s regulated utilities can make solar part of their generation portfolio.

courtesy Duke Energy Corp.

Duke Energy's Rob Caldwell is heading a new group assigned to develop solar and other renewable-energy sources in Duke's regulated utilities.

---------------------------------------------------------------------------------------

The group will make the business cases for whether that should be done through the utilities' ownership of the solar capacity, building their own projects or establishing partnerships.

“I think as solar prices go down and we get better at operating and managing the intermittency and the voltage fluctuations caused by that, you will see solar being part of our portfolio,” he says. “That is the opportunity here. That is the next place for our generation portfolios to evolve to.”

CEO decision

Duke’s unregulated Duke Energy Renewables unit has been an increasingly important player in wind and solar energy since it got into the business six years ago.

But Duke’s regulated utilities —in the Carolinas, Ohio, Kentucky, Indiana and Florida — are very minor players in the renewable-energy sector.

In the Carolinas, the two Duke utilities own little solar capacity. Duke Energy Carolinas has 10 megawatts of largely rooftop projects it built in a pilot program to learn more about how to handle solar on its grid. Duke Energy Progress owns none. Both buy power from relatively small distributed solar projects — none larger than 17 megawatts — as part of meeting North Carolina’s renewable-energy portfolio requirements.

Caldwell says that with customer interest in renewables growing and with the economics of solar power generation changing so significantly, Duke CEO Lynn Good decided it was time for the company to have people in its regulated utility division working on the developing renewable opportunities.

The group will determine how best to develop renewables — solar being the most immediate candidate — across all six of its regulated utilities. Caldwell says there are likely to be different approaches among the several utilities.

New group

Once the utilities decide how to proceed, his group will be in charge of executing on those plans.

Renewables had been a part of Caldwell’s duties since Duke Energy Corp. bought Progress Energy Inc. last year. Now renewable energy will be the entire focus of his 30-employee group, which is likely to expand by the end of the year.

Caldwell is assigning leaders for four divisions that will report directly to him. Those will be:

• Analytics and reporting. It will be involved in modeling, financial analysis and regulatory filings and will include market research.
• Strategy, policy and advocacy. It will look at short- and long-term strategies for the regulated utilities and analyze what policy changes may be needed to support them.
• Compliance. It will continue with activities involved in complying with regulations.
• Business development. It will ask how Duke can take advantage of the opportunities in the renewable-energy sector.

Sense of urgency

The group would likely grow once the strategy and policy questions are answered and Duke shifts into developing renewable energy in its regulated portfolios.

Caldwell says there is no timetable for when that would start.

“I have a real sense of urgency to get this all rolling,” he says. “The remaining staffing will be a function of where do we go? What decisions do we make?”

He adds: “This is important to our customers. This is important to company. The technology is moving in this direction. This just furthers our commitment to renewables.”