Lynn Good, Duke Energy’s CEO, spoke at NC State this week, and shared her many thoughts on leadership and transformation. Her vision for what is otherwise often considered a stable and boring industry, energy utilities, provided a great deal for students and faculty to think about.
Duke Energy’s roots lied in seeking to harness the power of the Catawba River to create a reliable energy system that could be used to support the textile companies. Duke’s roots in hydro energy have come full circle – starting with hydro power, then coal, then a lot of nuclear, and today Duke has 11 nuclear facilities in NC and SC that provide 50% of energy for these regions.
Good is seeking to transformation in an industry that is vital to everyone, and it will take a lot of capital, as well as a lot of innovative thinking and effort. Good noted that “When we think about leadership, we think about 3 things: customers, innovation, and the community.”
Good noted that “the customer has to be at the center of anything we do.” Customer services involves two primary dimensions in the energy industry: Reliability and Price. Reliability is simple: when you turn the light switch on, it works. Customers need reliability in the form of continued, 100% availability of power. Industrial customers also demand a continuous flow to operate the many robotic and computer-driven technologies that drive their business and create uptime. One of the biggest challenges in the developing world is the lack of reliable energy platforms, and we often take this for granted. But this also has to be delivered at a reasonable price. For the average customer in North Carolina, he or she pays about $3 a day for electricity. This price is 40% below the price on the West Coast, and 70% below the price in Europe.
Second is innovation. Universities are all about innovation – and the amount of technological change in the industry is critical to continuing to improve. Technologies on the forefront include shale gas and renewables, battery storage, wind, solar, hydro, and nuclear, are all critical to understand. Innovations also requires a long-term investment cycle – investments in 2015 still need to be viable in 2020. Duke Energy has invested over $4B into renewable energy to determine how they fit into the portfolio. Battery storage is a major barrier to many renewable energy forms, something that environmentalists often fail to understand or consider. Energy requires a constant flow from a source, but there are not yet batteries big enough to store the power from a wind farm – and what happens when the wind stops blowing or the sun stops shining on a cold winter day if that is your source of power?
The last point was on Leadership in our environment and in our communities. Good admits that Dukes does burn coal and uses nuclear generations – but also pointed out that nuclear and fossil generation is necessary to generate power – right now. We need to have power to have something to turn on during those winter mornings – and what we have today is nuclear, gas, coal, and hydro – with some level of battery storage. If we look out at 2025 and forward, environmental leadership is key, and Duke is committed to be as environmentally responsible as possible. The utility has retired coal plants in the Carolinas and nuclear plants have an extraordinary role and environmental stewardship is key and committed to. Her comments echoed much of what I heard in Germany by Dr. Michael Seuss, head of Siemens at a conference in Germany, and documented in a blog I wrote last year.
No energy company is without fault. Good acknowledged that they had a pipe that broke at the Dan River plant and discharged coal. This problems has been repaired at that site and she noted that “we have raised our standards to demonstrate leadership on problems that are good and bad – and we will make it right. We take community stewardship and commitment to the community.
It was at that point that a group of protesters began shouting at her in a typical “mic check” event, similar to what we saw last year at the Dupont speaker forum. After they were effectively drowned out by the crowd and escorted from the building, I happened to pick up a copy of their “protest” document that they were shouting out. In so many words, they were protesting the fact that Duke Energy is opposing the Energy Freedom Act to get affordable solar power from qualified third party vendors….an act which ignores the fact that solar power is unreliable. This group, like so many others, has a naive idea that solar and wind power are the solution to all of our ills, and that Duke is simply protecting a monopoly. These views represent an uninformed and silly disregard for the facts of how energy is created, and the importance of reliable and cost-effective energy to our community.
Good was very gracious about the whole incident, and went on with her speech discussing her backgorund, and her commitment to doing the right thing. She noted that “I understand and appreciate their passion and energy – I have that same passion about energy and the community. And I want to do the right thing.”