Duke Energy's battery strategy grows as data centers reshape North Carolina's grid

North Carolina's demand for electricity is rising faster than many new power plants can be built.

Duke Energy is increasingly relying on battery storage to help meet that growth, making facilities such as its Knightdale battery installation a larger part of the utility's long-term strategy as data centers, manufacturers and new residents reshape the state's electric grid.

The shift comes as regulators weigh another Duke Energy rate increase and broader questions about how to expand the grid while limiting costs for customers.

At the Knightdale site, rows of shipping container-sized batteries sit ready to discharge electricity within seconds when demand spikes. Duke says the batteries are most valuable during the evening hours — typically between 6 and 8 p.m. — when people return home, cook dinner, run air conditioners and electricity use reaches its daily peak.

Rather than immediately buying power from neighboring utilities or ramping up less efficient generators, the batteries give grid operators another option.

"The biggest challenge that we've always had is how to manage the peak demand," Duke Energy spokesman Jeff Brooks said. "The interesting thing about solar is that it produces the most energy during the middle of the day, when electricity demand is often lower. Storage lets us capture that energy and use it later when customers need it."

Duke says that flexibility can reduce fuel costs and help the utility operate the grid more efficiently.

Those potential savings have become increasingly important as North Carolina's electricity needs accelerate. Duke projects electricity demand will nearly double over the next decade, driven largely by data centers, advanced manufacturing and population growth. At the same time, the utility is seeking higher electric rates while planning billions of dollars in new generation and grid infrastructure.

The Knightdale facility is the largest battery storage project currently operating on Duke's system. Today, Duke has about 300 megawatts of battery storage in service and another 300 megawatts under construction. The company plans to expand that to about 6.5 gigawatts by 2035 — enough capacity to serve the equivalent of roughly 4 million homes during periods of peak demand.

Brooks said batteries also provide an important backup during unexpected outages or equipment failures because they can respond almost instantly while grid operators work to restore service or bring other generating resources online.

Not everyone agrees Duke's plan leans heavily enough on battery storage and solar.

Matt Abele, executive director of the North Carolina Sustainable Energy Association, said batteries paired with solar can provide some of the fastest and lowest-cost new electricity available while larger projects such as natural gas plants and nuclear reactors can take years to permit and build.

"If we want to meet that demand right now and make sure that we're keeping costs as low for ratepayers as we possibly can, then the utilities really need to embrace resources like solar and battery storage," Abele said.

Abele said the debate is becoming more urgent as electricity demand grows. While batteries won't replace natural gas or nuclear power, he said they can help bridge the gap as utilities wait years for larger generating projects to come online.

How to pay for that build-out remains one of the biggest questions before regulators. Duke is seeking higher electric rates in two North Carolina rate cases while also asking the Utilities Commission to approve billions of dollars in grid and generation investments needed to serve projected demand growth.

At the same time, state leaders are pushing Duke to create legally enforceable rate structures that ensure data centers and other large power users cover the costs of serving their growth rather than shifting those expenses onto households and small businesses. Duke has said it supports that principle, but the details will ultimately be decided by the Utilities Commission.

Duke sees battery storage as one piece of a broader energy portfolio that also includes natural gas, solar and, eventually, advanced nuclear power. Company officials say that mix will be necessary to reliably meet North Carolina's growing electricity demand.

"It takes all of that," Brooks said. "It's that diverse mix that we're going to need every bit of to be able to meet the growing energy needs in our state.