North Carolina’s Bet on Biomass Energy Is Faltering, With Energy Targets Unmet and Concerns About Environmental Justice

North Carolina’s push to integrate biogas as a reliable component of the state’s energy mix appears to be on shaky ground, after the state’s utilities commission reported that poultry and swine waste-to-energy projects have failed to meet their energy targets, resulting in supply chain problems and prompting calls for a policy review. 

In August 2007, North Carolina adopted the Renewable Energy and Energy Efficiency Portfolio Standard (REPS), which requires investor-owned utilities in the state to acquire up to 12.5 percent of their energy mix from renewables starting in 2021. Poultry and swine waste, which can be used to produce biogas, are counted among renewable energy sources, along with solar, wind, geothermal and others. 

The adoption of REPS spurred energy partnerships between waste-to-energy producers and utility companies like Duke Energy, one of the main investor-owned utilities and a long-time supporter of biomass. 

Under REPS, utility companies buy renewable energy credits (RECs) from the companies that produce energy from swine and poultry waste. A renewable energy credit is one megawatt-hour of electricity produced by a renewable source and supplied to the grid. The utility companies buy the credits in order to meet the renewable energy targets stipulated under the new standard.

In its 2021 report, the North Carolina Utilities Commission, which oversees energy-related matters, reported that the companies producing electricity from poultry and swine waste had been missing their energy generation targets since 2014 because of persisting technological and operational problems. 

As a result, the commission has been revising its yearly estimates of energy from biogas and biomass-powered energy sources, saying that the technology is still in the early stages of development and that the projects have experienced operational challenges. 

In North Carolina, an estimated 2,000 industrial hog operations raise a total of 9 million hogs annually. The state is ranked second in poultry production after Georgia, with over 5,700 farms raising more than 500 million chickens and turkeys annually, according to the North Carolina Poultry Federation. Advocates view the state’s backing of biogas from poultry and swine waste, which the livestock operations generate in enormous quantities, as an industry-approved response to the challenge of waste disposal and management that also allows commercial operators to make more profit. 

But environmental and citizen groups argue that using the animal waste for biogas produces more ammonia emissions and increases the risk of water and air pollution, with adverse human health impacts. The stalled waste-to-energy projects provide a renewed opportunity to demand that the state stop providing incentives for “dirty energy,” advocates say.    

Biogas is mainly composed of methane—a potent greenhouse gas—and produced by the decomposition or conversion of biomass sources such as poultry and swine waste, wood chips and waste from landfills. A byproduct of fossil fuels, biogas and biomass are considered by many clean energy advocates to imperil communities and contaminate the environment. 

Since REPS became the law, the commission has repeatedly allowed utility companies to postpone their compliance with waste-to-energy targets, because the producers could not supply enough electricity. 

As a result, the waste-to-energy target from animal waste for all utility companies operating in North Carolina was lowered from 700,000 megawatt hours (MWh) to 500,000 MWh in 2019, and the 2021 target increased only moderately, to 900,000 MWh, the commission reported. 

“Swine biogas and woody biomass look—at least on the surface—like easy ways to help achieve North Carolina’s goals of reducing net greenhouse gas emissions,” said Dr. Ryan Emanuel, an associate professor at Duke University.

The state’s 2019 clean energy plan, he noted, leans hard on both biogas and biomass. “To admit that these energy sources don’t perform as expected—or that they perpetuate environmental racism calls into question some aspects of the energy plan,” Emanuel said.

He added that companies that hope to use swine biogas claim that they are addressing the problems the waste poses for nearby communities by collecting and processing the methane from the animal waste. 

“But the new process still does not address air and water issues,” he said, adding, “These operations exacerbate existing disparities in the distribution of environmental harms, because they force us to hold on to models of food production that saddle vulnerable and marginalized communities with pollution.” 

Duke Energy, one of the main investor-owned utility companies operating in the state, has already indicated that it is unlikely to meet its future waste-to-energy targets, citing continuing difficulties in generating electricity from poultry and swine waste experienced by the power plants it has contracted with. 

In the compliance plan Duke Energy shared with the utilities commission, the utility said it was anticipating problems in meeting the targets because “suppliers have either delayed projects or lowered the volume of RECs to be produced.” The plan also noted that that one facility was offline for repairs and modifications and was unlikely to generate electricity until 2023. 

Duke Energy expects a new poultry waste-to-energy project to become operational in 2022 and three others to start functioning in 2023, according to the utilities commission report. But the commission has expressed skepticism about Duke’s aspirations, saying that start-up issues and other operational challenges could frustrate the utility’s waste-to-energy targets.

Dominion Energy—the other utility company operating in North Carolina—also expressed frustration with producers generating electricity from swine waste in the compliance report it filed with the state utilities commission. The utility said it was searching for opportunities to buy sufficient poultry-powered electricity from within North Carolina and from other places in the United States to meet its 2021 to 2023 requirements under REPS.  

Dominion has already invested in a $500 million biogas joint venture, known as Align Renewable Natural Gas or Align RNG, with the country’s largest pork producer, Smithfield Foods. The project involves laying more than 30 miles of pipeline connecting 19 hog farms spread across eastern North Carolina’s poorest counties, Duplin and Sampson. The methane captured from swine waste will be piped to a central processing facility for processing and then sold as natural gas.     

The prospect of new waste-to-energy facilities compounding the existing environmental problems has alarmed community groups and advocates, who argue that the increased development of the energy sources goes against Gov. Roy Cooper’s stated commitment to a clean energy transition. Profiting from outdated waste management practices known to contaminate the environment and endanger public health, advocates argue, also negates efforts by the Biden administration to address longstanding environmental injustice in low-income communities that are disproportionately harmed by industrial pollution.  

Roy Lee Lindsey, chief executive officer of the N.C. Pork Council, responded that the waste-to-energy facilities make sense financially and environmentally.

“While the market has been slower to develop than many anticipated, biogas remains a viable and promising technology that is supported by the EPA and the NC Clean Energy Plan. Continued investment in RNG projects makes sense from both an economic and environmental standpoint,” Lindsey said. “The ability to generate renewable energy on North Carolina hog farms is gaining traction and provides many tangible benefits, including fewer greenhouse gas emissions, less odor, and reduced potential for flooding during hurricanes. Biogas should be embraced by everyone who cares about these issues.” 

Duke Energy signed a power purchase agreement to buy electricity from North Carolina Renewable Power (NCRP), the biomass-burning power plant located in Lumberton that is currently idle.

But since June 2020, the utility and NCRP have been embroiled in a dispute, with each  accusing the other of defaulting on contractual obligations, company correspondence filed with the utilities commission shows. In a November 2020 letter to NCRP’s legal counsel, Duke Energy claimed that NCRP failed to supply the energy it had promised under the power purchase agreement it had signed with the utility. 

“Our requests for information were uniformly met with incomplete information, untruths, and obfuscations,” Duke’s representative said in the letter, alleging a lack of transparency in disclosing operational problems that NCRP was experiencing at the time.  

Duke Energy is demanding compensation for the damages it claims to have incurred because of NCRP’s “non-performance,” and the utility has already indicated its intention to terminate the energy purchase agreement with NCRP, citing defaults and accumulated damages. 

In its 2020 compliance plan, the utility estimated that it would need more than 250,000 renewable energy credits (RECs) generated from poultry waste for 2021 and 2022 to meet its compliance obligations under REPS. 

Operating in Robeson County since 2015, North Carolina Renewable Power (NCRP) has earned notoriety for violating the terms of its permit, including repeatedly exceeding emissions limits for carbon monoxide, nitrogen oxide, sulfur dioxide, fine particulate matter, known as PM2.5, and methane. The company has applied for a new permit, a move hotly contested by residents and environmental groups, who argue that the plant cannot be trusted to be a good neighbor. The company management said it has decided not to operate the plant until it gets the new permit from North Carolina Department of Environmental Quality (DEQ). 

Responding to a request for comments, Carey Davis, the executive vice president of Georgia Renewable Power, which owns NCRP, said the company is aware that the North Carolina Department of Environmental Quality is reviewing the public comments on NCRP’s permit request and that the agency will issue a report and recommendations on the proposed permit based upon its review.

In a response to Duke Energy’s allegations,  NCRP accused the utility of reneging on its obligations by failing to pay for the energy and RECs it has already purchased. “Duke’s abuse of its monopolistic market position and refusal to pay NCRP what it owes” has prevented the power plant from operating, NCRP said in the letter   

Randy Wheeless, a Duke energy representative, said the utility company is in the middle of confidential discussions with the North Carolina facility. “Duke Energy was buying power from the facility from 2015 until it ceased operation in 2020. Because the facility was using poultry waste as a fuel, the purchase power helped Duke Energy with its REPS compliance in the state of North Carolina,” he added. 

NCRP had not responded to requests for comments on the dispute by the time of this article’s publication.

Despite the stalled progress of waste-to-energy projects and the setbacks to the state’s energy targets, North Carolina is fast-tracking regulations that would expand the footprint of biogas and biomass energy in the state. 

“There’s no doubt that now is the time for an objective review of North Carolina’s renewable energy policy in view of the evidence we now have from the impacted communities,” said Donna Chavis, senior climate campaigner with the nonprofit Friends of the Earth. She said another reason for re-evaluating the state’s renewable energy matrix is the effort at the federal level to pass the Environmental Justice for All Act. “If it passes, the states will have to act anyway. It would be better if did it ourselves instead of forced by federal law,” Chavis said.

In Feb 2020, U.S. Reps. Raul Grijalva (D-Ariz.) and A. Donald McEachin (D-Va.) introduced the landmark legislation, which was followed by a companion bill in the Senate sponsored in July 2020 by then-Sen. Kamala Harris, who was elected vice president in November 2020. 

Hailed as the most comprehensive environmental justice bill in Congressional history, the legislation, still moving through committees, is aimed at addressing long-standing environmental inequities that have historically harmed low-income communities of color and tribal and Indigenous communities across the country.   

“The economic and political power of the utility companies and fossil fuel industry is now combined with the economic and political power of industrial agriculture for the first time on both the national and international levels,” said Rev. Mac Legerton, co-director of Robeson County Cooperative for Sustainable Development. 

He said the handholding between fossil fuels and industrial agriculture poses new and largely unrecognized challenges to the efforts to reduce carbon emissions across the United States. “Eastern North Carolina is ground zero for the incineration of poultry waste and the pipelining, burning and emitting of methane gas captured from hog lagoons in the name of renewable energy,” Legerton said. 

Lisa Sorg of N.C. Policy Watch, a media nonprofit, said the subject of energy policy in North Carolina is so politically charged that revisiting it could also be problematic.

“We have several state legislators who are very big on natural gas and biogas right now,” she said, “so, you’ve got big fossil fuels and huge agribusiness interests in North Carolina and they want these sorts of waste-to-energy technologies to proliferate.”